Bank’s Duty to Close HELOC
The Appellate Division, Second Department has made its latest pronouncement on the requirements of a “written request” under RPAPL §1921(1). HSBC Mtge. Corp. (USA) v Carr, 2012 NY Slip Op 08097 (2nd Dept., November 28, 2012).
In this case, the refinancing bank’s attorney had tendered the HELOC bank’s preprinted form requesting a satisfaction, along with the payoff check and a cover letter. The Court expressly states that tendering the form was sufficient to fulfill the writing requirement. In addition, even though the form was not signed by the borrowers themselves, “this fact is not determinative” because “[b]y negotiating the payoff check without any further inquiry, [the bank] effectively waived any possible right it might have had to insist that the necessary ‘written request’ for a discharge be signed by the ... parties that established the HELOC.”
This provision has given rise to much confusion and contentious litigation. Even though the bank form and check in Carr were accompanied by a cover letter from the refinancing bank’s attorney, this fact played no role in the Court’s analysis. Of course, in practice, having the written request for discharge signed by the borrower(s) is always the most prudent course of action.