When a Recorded Satisfaction of Mortgage Is Challenged, Legal Defense Becomes Essential

July 8, 2025

When a Recorded Satisfaction of Mortgage Is Challenged, Legal Defense Becomes Essential

In a recent decision, the Appellate Division, Second Department, affirmed the importance of reliable public filings and protected the rights of a third-party property owner caught in a foreclosure dispute involving Bank of America.

The case centered on a home equity line of credit issued in 2003. In 2014, Bank of America recorded a satisfaction of mortgage, which is a public declaration that the loan was resolved. Two years later, the bank initiated a foreclosure action, asserting that the satisfaction was filed in error. By that time, the property had been transferred to a new owner who purchased it based on clear title.

Court Grants Intervention, Denies Bank’s Foreclosure Motion

The Appellate Division ruled that the current owner had the right to intervene in the foreclosure case, as their legal interest in the property would be directly impacted. The court also found that Bank of America failed to submit sufficient admissible evidence to prove the satisfaction had been recorded in error.

Additionally, the court determined that the bank had not adequately established that the loan was exempt from New York’s RPAPL 1304 notice requirements, which apply to home loans and protect borrowers through mandated pre-foreclosure notices.

Financial institutions must meet the burden of proof before undoing their own filings.

A Clear Victory for Property Rights and Public Record Reliability

The decision reinforces two core legal principles:

A recorded satisfaction of mortgage is presumed valid unless strong evidence proves otherwise.

Title holders have the right to defend their interest when their ownership is challenged by a prior lender.

“This ruling confirms that legal records matter—and that financial institutions must meet the burden of proof before undoing their own filings,” said Steven Amshen, Founding Partner of Petroff Amshen LLP. “We’re proud to defend those rights.”

Foreclosure Defense Attorneys That Step In When Ownership Is at Risk

Petroff Amshen LLP represented the property owner in the appeal, successfully arguing for intervention and challenging Bank of America’s attempt to foreclose.

As Foreclosure Defense Attorneys, the firm focused on:

Enforcing the legal presumption of satisfaction validity

Challenging unverified claims

Ensuring compliance with consumer protection statutes under New York law

This case adds to Petroff Amshen LLP’s growing track record of defending both homeowners and third-party title holders against improper or unsupported foreclosure attempts.

Protecting Your Property Starts with Legal Clarity

When banks revisit previously satisfied mortgages and try to reopen foreclosure proceedings, the consequences can be serious, even for innocent third parties.

Petroff Amshen LLP encourages all homeowners and buyers in New York and New Jersey to consult with experienced counsel if they receive a foreclosure notice tied to a resolved or long-inactive mortgage.

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