In June 2021, MERS assigned the mortgage to UWM. Later, UWM filed a foreclosure action in December 2022. While the Smiths did not appear in the case—resulting in a default judgment and order of reference against them—Prime Property Protection did respond, challenging UWM’s standing to foreclose. The Supreme Court (Justice Thomas Buchanan) granted UWM’s motion for summary judgment against Prime. Prime appealed.
On review, the Third Department reversed that portion of the ruling. Although UWM attached a copy of the note to its complaint—indorsed in blank following a special indorsement to a third party—the court determined that this was not sufficient to prove standing. The indorsements were undated, and UWM did not provide evidence showing it possessed the note at the time it filed the foreclosure.
An affidavit submitted in July 2023 by a representative of UWM’s loan servicer stated that the servicer, acting as UWM’s agent, then had physical possession of the note indorsed in blank. However, the affidavit failed to state when that possession began. This omission proved critical.
The court emphasized that “plaintiff failed to demonstrate that it had standing to commence this mortgage foreclosure action.” Under New York law, possession of a note indorsed in blank must be shown at the time of commencement—not merely at the time of motion practice.
Further, the complaint itself could not be relied upon to fill that evidentiary gap. It was unverified and included conflicting allegations, leaving it with no probative value.