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Landlord Tenant Law Litigation

Second Department Rules That Cooperative Apartment Owners’ Rights Are Precarious

On June 14, 2023, the Second Department decided Walsh v Ocwen Loan Servicing. The court, with little fanfare, appeared to rule that cooperative apartment owners are saddled with an unavoidable risk of loss. That is, if a lender alleges that the owners have defaulted, and then conducts a nonjudicial foreclosure sale, the former owners are left with few remedies.

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On June 14, 2023, the Second Department decided Walsh v Ocwen Loan Servicing, LLC. The court, with little fanfare, appeared to rule that cooperative apartment owners are saddled with an unavoidable risk of loss. That is, if a lender alleges that the owners have defaulted, and then conducts a nonjudicial foreclosure sale, the former owners are left with few remedies. Regardless of whether the owners were truly in default, and regardless of whether they were notified of the sale, they can lose their home — for good.

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