Improper Foreclosure Notices May Give Rise to Action for Damages

Oct 22, 2018

In a case involving improper notices under the Fair Foreclosure Act, the Appellate Division recently held that a plaintiff may have a cause of action under the Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA) if harm can be established.  Wright v. Bank of America, et al. – N.J. Super. – (App. Div. 2018).  Plaintiff, Charles Wright, received five notices of an intention to foreclosure served on him by defendant, BAC Home Loan Servicing, LP.  The notices failed to include the name and address of the actual lender – defendant Bank of America – and therefore were technically improper.  He filed a lawsuit claiming damages under the TCCWNA, N.J.S.A. 56:12-14 et. seq., but the trial court dismissed the complaint by applying the litigation privilege and by holding that the alleged FFA violations could not support a TCCWNA claim.

The Appellate Division reversed.  They recognized that a lender or its agent must accurately recite in any notice of intention to foreclose those things that the statute specifically require.  Even though there was no suggestion that the content of the notices was false or misleading, the court held that the allegation that a legal requirement was omitted could support a claim under the TCCWNA as long as plaintiff could establish that he was an “aggrieved consumer” under the Act. 

Plaintiff acknowledged that no foreclosure action was ever commenced.  However, since the case was dismissed for failure to state a claim upon which relief could be granted, the Appellate Division held that the best course called for a remand to allow plaintiff to file an amended complaint that would identify the alleged harm he believed was caused by the defective pre-suit notices.

The Appellate Division rejected the trial court’s alternative basis for dismissing the complaint based upon the litigation privilege, because the privilege is intended to apply to statements that would otherwise be defamatory or form the basis for other tortious conduct, while here the lender’s agent merely omitted information required by the FFA.