REAL ESTATE – FORECLOSURE: DOCTRINE OF LACHES UTILIZED TO PREVENT HOMEOWNER FROM VACATING DEFAULT JUDGMENT

The doctrine of laches is an interesting concept.  Although pled with a fair amount of regularity, it is a defense to a claim that is employed sparingly.  The doctrine of laches can be defined as a bar to any delay in enforcing a known right which cannot be explained or excused and, as a result, the other party has been prejudiced because of such delay.  In this foreclosure action, PHH Mortgage Corp. v. Krowicki, laches is used to prevent a homeowner from vacating a default judgment of foreclosure entered in 2007 and well after the sale of the property to an innocent third party.  According to the Court, with all of Defendant’s posturing, motion practice, bankruptcies and attempts at mediation regarding the foreclosure, it never once challenged the default judgment until Defendant was out of options.  Unfortunately, Defendant waited too long to enforce a right which it was clearly aware of.  Similarly, the doctrine of equitable estoppel also barred relief for the same reason.  The court also rejected Defendant’s argument, raised for the first time on appeal (see the common thread running through the Defendant’s prosecution of this case), that the Plaintiff bank lacked standing because it did not possess the 1998 note when it filed the complaint, because the judgment and sale were entered and accomplished in 2007 and 2010, well before the Supreme Court adopted substantial amendments to the rules governing foreclosure actions.

Bottom line, DO NOT WAIT and hope for the best when it comes to a foreclosure action.  Contact competent legal counsel to find out your rights.

Click on PHH Mortgage Corp. v. Krowicki for the entire opinion.  http://www.judiciary.state.nj.us/opinions/a1654-11.pdf

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com.