A New York man who took out a mortgage in 2005 has managed to overturn a court ruling that had gone in favour of a bank seeking to foreclose on his property. The US Bank National Association had accused Moses Sukljian of failing to make his loan payments and secured a favourable ruling in 2025. However, on Friday, a state appeals court reversed the decision after finding that the bank had not provided enough evidence to prove it had the legal right to enforce the loan.
According to the ruling published by the New York State Unified Court System, the bank had failed to provide sufficient proof concerning documents used to transfer the right to enforce the loan. As a result, the earlier judgment in the bank's favour could not stand.
The 2005 mortgage and foreclosure dispute
The story began in December 2005, when Sukljian signed a mortgage agreement with WMC Mortgage Corp. for a property in Albany County, New York. Along with the mortgage, he signed a promissory note, a document recording his promise to repay the borrowed money.
Over time, the loan was transferred to another company. By 2018, Ocwen Loan Servicing, LLC, was handling it, and Sukljian entered into an agreement that changed the original repayment terms.
The revised arrangement increased the principal balance of the loan and fixed a new monthly payment. A year later, Ocwen merged with PHH Mortgage Corporation, which continued servicing the mortgage.
The matter reached court in July 2023, when US Bank National Association filed a foreclosure lawsuit. It claimed Sukljian had defaulted on the loan and sought permission to proceed with the case.
The bank supported its claim with the mortgage papers, the 2018 modification agreement, payment records, and a notice about missed instalments. It also asked for an official to be appointed to calculate the amount outstanding.
In July 2025, the lower court accepted the bank's position. It ruled that the documents were sufficient, removed Sukljian's defence and directed that the outstanding debt be calculated. Sukljian, however, appealed, arguing that the bank had not proved its right to enforce the original loan.
Bank documents became deciding factor
The appeals court had to examine whether US Bank National Association was legally entitled to bring the foreclosure case in the first place.
The difficulty arose because Sukljian had signed the original promissory note in favour of WMC Mortgage Corp., while the foreclosure case had been filed by US Bank National Association years later.
For a bank to enforce such a loan, it must establish that the right to do so was properly transferred to it. One way of demonstrating this is through an endorsement on the promissory note.
An endorsement can also appear on a separate document called an allonge. This is an additional sheet that must be firmly attached to the original note and can be used to record the transfer of enforcement rights.
When the bank first filed its lawsuit, the copy of the promissory note it submitted did not contain an endorsement establishing its right to enforce the loan. There was also no accompanying allonge containing the necessary endorsement.
The bank subsequently produced two allonges, one of which identified it as the party entitled to payment. But both documents were undated, and neither had been included with the original complaint.
This left the court unable to establish whether the documents had been properly attached to the note when the foreclosure proceedings began.
What the appeals court found
The bank had also relied on a statement from a senior loan analyst at PHH Mortgage Corporation. The analyst confirmed that PHH had obtained the original promissory note before the lawsuit was filed.
However, the statement did not say whether the allonges were attached to the note at that time. It also did not establish when the documents were created or when they came into the bank's possession.
These missing details mattered because the bank needed to prove that it had the right to enforce the loan in July 2023, not merely at some later stage.
The appeals court therefore concluded that the bank had not established its legal standing sufficiently to obtain judgment in its favour without a trial.