FCL

Foreclosure of Mortgages and Foreclosure Guarantee

Foreclosure of Mortgages and Foreclosure Guarantee Certificate (New York)
Section 23 in Part I of the Title Insurance Rate Service Association (TIRSA) rate manual provides for the availability of Mortgage Foreclosure Guarantee Certificates in New York, at a pre-paid flat rate (currently $500.00), and with liability limited to $10,000.00.
Special care must be taken when insuring a title which has passed through a foreclosure action or deed in lieu of foreclosure. Requirements and exceptions with an (FGC) in their heading are usually found in a foreclosure guarantee.

Requirement

FCLR01 STG

Continuation (FGC)

This Company should be requested to continue its searches in this title to (a) the date of filing the notice of pendency of action to foreclose the mortgage recorded in (Liber)(Record Liber) (Reel) _______ (M)p _____________; (b) a date immediately prior to the entry of judgment in such action; and (c) to the date of sale pursuant to said judgment. If continuation searches are not requested, the certificate will not cover against loss which could have been avoided or mitigated had such searches been run.

FCLR02 STG

Notice of Pendency, Commencement of case (FGC)

Note: A notice of pendency must be filed at least 20 days prior to entry of judgment in the mortgage foreclosure. If the notice of pendency is filed at the time the case is commenced, a party must be served with the summons and complaint within 30 days of the filing of the notice, or the notice shall have no effect. All parties must have been served or shall have appeared or answered within 120 days of the commencement of the case by filing, and the appropriate affidavit of service, notice of appearance or answer filed with the court within such period, or the action shall be deemed to be dismissed against such party.

FCLR03 STG

Notice of Pendency (general)

Notice of Pendency in Action to foreclose mortgage recorded in ___________, entitled __(Plaintiff N.)___, Plaintiff, v. __(Def’t N.)__ and others, Defendant, under index no. __________ :

{fill in appropriate clauses:}

has expired. A new notice must be filed more than 20 days prior to the entry of the final judgment of foreclosure and sale.

must be filed more than 20 days prior to the entry of the final judgment of foreclosure and sale.

has not been filed as provided in RPAPL § 1331. The judgment of foreclosure and sale is therefore not effective.

is not effective because the defendant was not served within 30 days of the filing of the Notice, as required pursuant to CPLR § 6512. Judgment of Foreclosure and Sale is not effective in the absence of a curative order, provided no party or person has been prejudiced thereby.

FCLR04 STG

Tenants or persons in possession (FGC)

Note: This certificate does not provide any assurance that any tenant or person coming into possession of the mortgaged premises after the filing of the notice of pendency shall be on constructive notice of the action. The plaintiff should make an investigation as to persons in possession prior to the entry of judgment.

FCLR05 STG

Military Service

The provisions of the Federal Soldiers and Sailors Civil Relief Act of 1940, as amended (see 50 U.S.C., Appendix 501 ff.) must be complied with and affidavits and investigation as to military service must be made after default in appearance.

FCLR06 STG

Reference to Schedule of necessary parties defe

For necessary parties defendant in an action to foreclose mortgage in [Liber, Record Liber, Reel, etc.] __________, (M)p ________, see the Schedule entitled “Certification of Necessary Parties Defendant.”

FCLR07 STG

USA a defendant; right to redeem

{If the United States of America has a lien or interest which is to be barred by judgment in the foreclosure action to be brought,}Title is subject to the right of the United States of America to redeem within {one year} {120 days} from the date of the sale; see 28 U.S.C. 2410 (c).

Date of sale is the auction date, not the date of delivery of the referee’s deed.

FCLR08 STG

UCC Financing Statement

This certificate does not guarantee the relative priority of the mortgage as to UCC financing statements filed after the recording of the mortgage, which relate to fixtures affixed after the date of filing of the financing statement, nor does the certificate guarantee that any such interest can be cut off.

FCLR09 STG

FDIC, RTC, OTS

In the event a judgment, lien or mortgage is held by or acquired by a bank or thrift institution which is now or has at any time prior to the foreclosure sale been placed in conservatorship or receivership by the Office of Thrift Supervision (OTS), Federal Deposit Insurance Corporation (FDIC) or the Resolution Trust Company (RTC), the consent of the agency in charge is required prior to commencing or continuing the foreclosure, in order that the foreclosure may be effective to discharge such interest, lien, judgment or mortgage, pursuant to 12 U.S.C. 1825 (b)(2).

FCLR10 STG

Foreclosure of Torrens Property

The premises herein, being registered under the Land Title Registration Law, are subject to all provisions of Article 12 of the Real Property Law. The Notice of Pendency must be filed in the County Clerk’s office, in accordance with the requirements of the CPLR and the RPAPL, and must also be memorialized in the registrar’s office pursuant to RPL § 420 in order to be notice to the registered owner or any person dealing with the property or any right or interest therein. The statute contains further requirements which must be met.

Exception

FCLX01 STG

If deed in lieu of foreclosure

If this examination is for the purpose of insuring a deed of the premises described herein to the holder of the mortgage in [Liber, Record Liber, Reel, etc.] ________, (M)p ________, or its nominee in lieu of foreclosure of said mortgage, policy will except (a) any rights of the grantor to redeem, and (b) any mechanics liens filed within eight (8) months after the delivery of the deed.

The proofs required are:

(a) proof of the fairness of the transaction
(b) the deed contains a non-merger recital regarding the interest of the mortgage
(c) a written agreement between the parties is submitted and reviewed, which provides that the release of the mortgagee from personal liability on the debt is consideration, as is the release of any guarantors. Where possible additional consideration flowing to the mortgagor should be considered, and if the mortgage loan is non-recourse, must be provided for. If the grantor is a corporation, all corporation requirements must be raised.

Schedule A

FCLP01 STG

Certification of Necessary Parties Defendant Pr

In the event any of the persons named below are dead, the legal representatives and successors in interest of such decedent should be made parties defendant after the search has been amended. The provisions of the Federal Soldiers and Sailors Civil Relief Act of 1940 (as amended) must be complied with, and affidavits and investigation as to military service must be made after default in appearance (see 50 USC Appendix § 520).

If the applicant has made investigation or inspection which discloses that there are other persons having an interest in the property whose rights are subordinate to the mortgage being foreclosed, such persons should also be named as parties defendant after the search has been amended.

If there are any leases, mortgages or other liens recorded prior to the period covered by this search which are in fact subordinate to the mortgage being foreclosed, by subordination agreement or otherwise, all persons interested in such leases, mortgages or other liens should also be made parties defendant after the search has been amended, all persons interested in such mortgages should also be made parties defendant after the search has been amended.

If there are any mortgages recorded prior to the period covered by this search which have been paid in full, but for which the satisfaction, discharge or release have not been recorded, or if there are any mortgages which have been fully paid which have not been otherwise satisfied of record, all persons interested in such mortgages should also be made parties defendant after the search has been amended.

This certificate does not This certificate does not provide any assurance that any tenant or person coming into possession of the mortgaged premises after the filing of the notice of pendency shall be on constructive notice of the action. The plaintiff should make an investigation as to persons in possession prior to the entry of judgment.

The addresses of parties and the names of corporate officers shown in this certificate were obtained from the record and are not represented to be the present addresses of the parties or the present corporate officers.

The applicant should consider the desirability of naming as parties defendant any obligors on the bond or note secured by the mortgage, or in any extension, assumption or guaranty agreement.

If the United States of America, the State of New York, or a municipality, or any department, agency or instrumentality of any of them, acquires an interest in, or a lien upon, the premises, by assignment or otherwise, even after the filing of the notice of pendency, consideration should be given to the desirability of bringing in the United States of America, the State of New York, or such municipality, or any department, agency or instrumentality of any of them as a party defendant. If the United States of America, the State of New York, or a municipality, or any department, agency or instrumentality of any of them are made parties, the complaint must set forth the reason therefor with particularity. The United States has one year from the date of the sale in which to redeem (or 120 days if pursuant to a federal tax lien). Particular attention should be given to the special requirements of the Federal Deposit Insurance Corporation in connection with mortgages or liens which may be held in the name of a banking or thrift institution in conservatorship or receivership, or in the name of the Resolution Trust Corporation.

The Company should be requested to continue searches to the date of the filing of the notice of pendency, to a date immediately prior to the entry of judgment, and to the date of sale pursuant thereto. In counties where recordings and filings are not promptly made by the clerk or recording officer, it may be advisable to run a search immediately before obtaining the order of reference, in order to ascertain whether any matters have appeared on the record as of a date prior to the date of filing of the notice of pendency, which were not actually on file at the time the notice of pendency was filed.

Upon any continuation, no examination will be made of the notice of pendency or any other papers filed in the action. All parties must be served or must appear or answer within 120 days of the commencement of the case by filing, and the appropriate affidavit of service, notice of appearance or answer must be filed with the court within such period, or the action shall be deemed to be dismissed against such party.

The following should also be made parties defendant in an action to foreclose the mortgage identified herein as “the mortgage to be foreclosed.”

Parties  Interest in Premises

FCLP02 STG

Certification Owners

1. Fee Owners, or owners of the premises,
 and their addresses.

Owner(s) of record by deed dated __/__/__ and recorded on __/__/__ in _________

[Note that a Surrogate’s search should be made in the county where the premises is located to determine if any owner is deceased. If title is in a surviving tenant by the entirety or joint tenant, the certification should read:

Surviving (specify tenancy). Who acquired title together with ______, (who died (in)testate in ________ County on __/__/__, by deed dated __/__/__ and recorded on __/__/__ in _________ .]

[Also note that if the owner of record is deceased, and the Company shows an Estate, the Executor or Administrator is a proper party defendant and any Trustee of a Trusty (whether testamentary or inter vivos) which is in title is a necessary party defendant. The distributees of an intestate decedent are also necessary parties, to cut off their interests (although in many cases a deficiency judgment is not enforceable against a distributee). See Estates Powers and Trusts Law (EPTL) §12-1.1, and consult with Counsel for any questions.]

FCLP03 STG

Certification Obligors

2. Obligors on Bond or Note, and addresses.

Obligors on __________.

[Note that this will usually be based on information provided by the applicant - this should be so noted in the report.]

FCLP04 STG

Certification Subordinate mortgage holders

3. Holders of subordinate mortgages, and
 addresses.

Holder of subordinate mortgage made by ________ for $_________, dated __/__/__ and recorded on __/__/__ in ___________.

FCLP05 STG

Certification Judgment creditor

4. Judgment creditor, and
 addresses.

Judgment creditor pursuant to judgment for $__________, entered __/__/__ in ______ Court under index no. ______, and docketed on __/__/__ in the County Clerk’s office.

FCLP06 STG

Certification Lienholder

5. Lienholder who can be cut off, and
 addresses.

Specify details as to type of lien, amount, date, docketing information.


[Note: If the mortgage to be foreclosed is a first mortgage lien on a condominium unit (or one of the specified second mortgages referred to in RPL § 339-z), the Board of Managers of the Condominium should be named and served, to cut off the lien of unpaid common charges.]

FCLP07 STG

Certification State of New York

6. The People of the State of New York

Specify all the details known regarding the lien to be cut off. If the lien is not definite, something like “possible New York State Franchise Taxes of ABC Corp., which may be a lien upon the premises” should be adequate.

[Note: RPAPL § 202 requires that where the State of New York or any department, bureau, board, commission, council, officer, agency or instrumentality of the State is made a party defendant, the complaint must provide detailed facts showing the particular nature of the interest or lien.]

FCLP08 STG

Certification City of New York

7. The City of New York

Specify all the details known regarding the lien to be cut off. If the lien is not definite, something like “possible New York City Corporate Taxes of ABC Corp., which may be a lien upon the premises” should be adequate.

[Note: RPAPL § 202-a requires that where the City of New York or any department, bureau, board, commission, officer, agency or instrumentality of the City of New York is made a party defendant, the complaint must provide detailed facts showing the particular nature of the interest or lien.]

FCLP09 STG

Certification Agency or instrumentality of Stat

8. A Department, Agency or instrumentality
 of the State or City (e.g. The New York
 City Parking Violations Bureau)

Specify all the details known regarding the lien to be cut off. E.g. “parking violation judgments shown on the attached schedule” should be adequate.

[Note: RPAPL § 202 or 202-a requires particularity in pleading.]

FCLP10 STG

Certification United States of America

9. The United States of America
 or an agency, etc.
  Provide all details

[Note: Pleadings naming the United States of America or a department, agency or instrumentality of the USA as a party defendant must set forth with particularity the nature of the interest or lien of the United States with respect to the property.]

[Note: Where the lien of the United States of America is pursuant to a federal tax lien, the complaint must set forth the name and address of the taxpayer, the identity of the IRS office which filed the Notice of Lien, and the date of filing and place of filing of the lien. See 28 USC § 2410 ( b).]

[Note: In all cases where it becomes necessary to name the United States of America as a party defendant, attorneys should consider the provision of sixty days’ time in which to answer, the appropriate method of service, and the applicable redemption period. See 28 USC §§ 2410 and 2412.

FCLP11 STG

Certification of Defendants; end

After specifically naming defendants add:

Any party who by bond, note, extension agreement or otherwise may be liable for a deficiency judgment, if such deficiency judgment is desired.

Any party in possession of any part of the mortgaged premises whose interest plaintiff desires to bar.

FCLP12 STG

Proceedings after judgment

Due proceedings after judgment of foreclosure and sale are required. Proof of service of judgment with notice of entry on the parties demanding same is required. Proof of service of notice of sale on all attorneys demanding same is required. Proof of proper publication (and posting where necessary) of the Notice of Sale is required.

FCLP13 STG

Condominium Unit to be foreclosed [an RPL § 339

Where a first mortgage to be foreclosed involves a condominium unit, the Board of Managers must be served in order to assert the priority of the mortgage over the lien of any unpaid common charges (see RPL § 339-z). {However, policy to be issued hereunder will not insure that the grantee at foreclosure sale will be free from liability for payment of any unpaid common charges, unless the Board of Managers expressly waives any right to enforce any lien for unpaid common charges or issues its letter stating that all such charges have been paid to date.}

FCLP14 STG

Where numerous judgments are not “on the head”

Judgment creditors whose judgments appear to be against the parties to the chain of title are specifically set forth herein. An investigation should be made as to the other judgments on the title report and the holders of such of them that are found to be against the parties in title should be joined as parties defendant.

FCLP15 STG

Call for personal delivery service

This certification is made on the assumption that all parties are to be served by in-hand personal delivery pursuant to CPLR 308 (1). If service is to be made otherwise, full information must be submitted to the Company prior to such service and this certification is subject to such amendment as may be necessary.