Limits on Vacating Foreclosure Judgments After Trial Period Plans: Commentary on U.S. Bank Trust, N.A. v. Belizaire

I. Introduction

This commentary examines the Appellate Division, Second Department’s decision in U.S. Bank Trust, N.A. v. Belizaire, 2025 NY Slip Op 06353 (Nov. 19, 2025), an uncorrected opinion issued pursuant to Judiciary Law § 431. The case arises from a residential mortgage foreclosure in Suffolk County and centers on a borrower’s attempt to use post-judgment payments made under a trial period plan (TPP) as a basis to vacate an already-entered order and judgment of foreclosure and sale and to dismiss the foreclosure complaint.

The decision is significant for New York foreclosure practice because it clarifies and reinforces two key propositions:

First, a borrower’s compliance with a trial period plan and a lender’s acceptance of post-judgment payments, standing alone, do not furnish grounds under CPLR 5015(a) or the court’s inherent powers to vacate a foreclosure judgment in the “interests of substantial justice,” especially where no permanent loan modification is finalized.
Second, absent opposition below, a party may not appeal from the portion of an order that is entered upon its default (here, the borrower’s failure to oppose the lender’s cross-motion to amend the judgment to credit the post-judgment payments).

The opinion sits at the intersection of:

the finality of foreclosure judgments,
the strict limits on vacatur under CPLR 5015 and under the court’s inherent equitable authority, and
the widespread use of trial period plans and loan modification efforts in residential foreclosure practice.

For lenders, servicers, and borrowers alike, the decision provides a clear roadmap for how New York courts will treat post-judgment modification efforts and trial payment arrangements: the appropriate adjustment is typically an amendment of the judgment to credit payments, not a vacatur of the judgment itself.

II. Factual and Procedural Background

A. The Underlying Loan and Foreclosure Action

On August 15, 2006, the defendant-borrower, Kerlie Belizaire, executed a promissory note in the principal amount of $565,000, secured by a mortgage on residential property in Suffolk County.

In February 2016, the plaintiff, U.S. Bank Trust, N.A., commenced an action, inter alia, to foreclose the mortgage against Belizaire and others. Belizaire answered and asserted affirmative defenses.

As required in residential foreclosure actions, the case proceeded to the mandatory settlement conference part under CPLR 3408. Conferences were held on May 23, 2016, and July 27, 2016, after which the case was released from the settlement conference part, indicating that no settlement or modification had been finalized during that process.

B. Summary Judgment and Judgment of Foreclosure and Sale

In an order dated October 2, 2017, the Supreme Court, Suffolk County (Whelan, J.), granted the plaintiff’s unopposed motion, inter alia, for:

summary judgment on the complaint as against Belizaire, and
an order of reference to compute the amount due under the mortgage.

A referee was appointed to compute the amount due. Subsequently, in an order and judgment of foreclosure and sale (one paper) dated August 22, 2018, the Supreme Court:

granted the plaintiff’s unopposed motion to confirm the referee’s report and for a judgment of foreclosure and sale,
confirmed the referee’s report, and
directed the sale of the mortgaged property.

Notably, despite the entry of this judgment, no foreclosure sale occurred in 2018 or 2019, in part because of subsequent motion practice, and, as ultimately becomes important, because the servicer pursued a trial period plan with the borrower in 2020.

C. The Trial Period Plan and Post-Judgment Payments

On March 30, 2020, the plaintiff’s loan servicer sent Belizaire a letter offering her the opportunity to enter into a trial period plan (TPP). The letter provided that if Belizaire:

made an initial lump-sum payment of $12,000, and
then made six monthly payments of $4,829.20, starting May 1, 2020 and ending October 1, 2020,
and submitted all required documentation,

then the loan would be permanently modified.

The record, including an affidavit from Anthony Younger (an employee of the servicer and attorney-in-fact for the plaintiff) and the loan’s payment history, showed that Belizaire:

made the $12,000 initial payment, and
made six payments of $4,829.20,
for a total of $40,975.20 in trial-period payments.

However:

after completing these TPP payments, Belizaire stopped making further payments,
the parties did not enter into a permanent loan modification agreement, and
there was no evidence that Belizaire had satisfied all of the other conditions specified in the TPP for a permanent modification.

D. Motion to Vacate the Foreclosure Judgment; Cross-Motion to Amend

In May 2021, Belizaire moved to:

vacate the August 22, 2018 order and judgment of foreclosure and sale, and
dismiss the complaint insofar as asserted against her.

Her core argument was that the plaintiff’s acceptance of her post-judgment payments pursuant to the TPP:

required vacatur of the foreclosure judgment, and
mandated dismissal of the foreclosure action as against her.

She supported her motion with her own affidavit, bank statements, and a copy of a $12,000 cashier’s check, to show that she made the TPP payments.

The plaintiff opposed the motion and cross-moved, inter alia, to amend the existing judgment of foreclosure and sale so that it would properly credit and reflect the payments Belizaire had made after the judgment was entered. The plaintiff did not contest receipt of the TPP payments; rather, it argued that:

the TPP did not result in a permanent modification,
the borrower ceased making payments after October 1, 2020, and
the correct remedy, if any, was to amend the amount due in the judgment, not to vacate the judgment itself.

E. The Supreme Court’s 2021 Orders and the Appeals

In an order dated August 31, 2021, the Supreme Court:

denied Belizaire’s motion to vacate the judgment and to dismiss the complaint, and
granted that branch of the plaintiff’s cross-motion which sought amendment of the order and judgment of foreclosure and sale to reflect the post-judgment payments.

In a separate order, also dated August 31, 2021, the Supreme Court:

went further and expressly amended the order and judgment of foreclosure and sale,
setting the total amount due at $1,055,583.26, after crediting the post-judgment payments.

Belizaire appealed from both August 31, 2021 orders.

III. Summary of the Appellate Division’s Decision

The Appellate Division, Second Department, issued a succinct but doctrinally important decision. It held that:

The appeals from those portions of the orders that granted the plaintiff’s cross-motion to amend the judgment of foreclosure and sale must be dismissed, because those portions of the orders were entered upon Belizaire’s default in failing to oppose the cross-motion. Under CPLR 5511, no appeal lies from an order made upon the appellant’s default.
On the merits, and insofar as review was available, the Supreme Court’s denial of Belizaire’s motion to vacate the foreclosure judgment and to dismiss the complaint was properly affirmed. Belizaire:
- failed to identify a cognizable ground under CPLR 5015(a), and
- failed to show fraud, mistake, inadvertence, surprise, or excusable neglect sufficient to invoke the court’s limited inherent power to vacate judgments “in the interests of substantial justice.”
While the record showed that Belizaire made all payments required by the TPP, the TPP itself contained additional prerequisite conditions for execution of a permanent modification agreement; there was no evidence that these conditions were satisfied, and the parties never executed a permanent modification. Thus, those TPP payments did not entitle the borrower to vacatur of the foreclosure judgment.
Belizaire’s argument that the bank violated its duty of good faith under CPLR 3408(f) was raised for the first time on appeal and, accordingly, was not properly before the Appellate Division.

The orders were therefore affirmed insofar as reviewed, with one bill of costs awarded to the plaintiff.

IV. Detailed Analysis

A. Appellate Jurisdiction: No Appeal from an Order Entered on Default

Before reaching the merits of vacatur, the court addressed a threshold jurisdictional issue: whether Belizaire could appeal from the portion of the orders granting the plaintiff’s cross-motion to amend the foreclosure judgment to reflect the post-judgment payments.

The court held that those portions of the orders were unappealable because they were entered upon Belizaire’s default. She had not opposed the plaintiff’s cross-motion below. Citing CPLR 5511 and:

HSBC Bank USA, N.A. v. Simms, 163 AD3d 930, 932, and
Marino v. Termini, 4 AD3d 342,

the court reiterated a well-settled principle:

“No appeal lies from an order entered upon the default of the appealing party.”

Thus, while the borrower attempted to appeal from the amendment of the judgment (including the total amount due), the Appellate Division refused to entertain that portion of the appeal. This underscores an important practical point:

If a party wishes to preserve appellate review of an adverse determination, it must oppose the relief in the trial court. Failure to do so renders the resulting order unappealable as to that relief.

B. Standards for Vacatur under CPLR 5015(a) and the Court’s Inherent Power

The core legal issue concerned vacatur of a foreclosure judgment. CPLR 5015(a) enumerates limited grounds upon which a court may relieve a party from a judgment or order:

excusable default,
newly discovered evidence,
fraud, misrepresentation, or other misconduct of an adverse party,
lack of jurisdiction to render the judgment or order, and
reversal, modification, or vacatur of a prior judgment or order upon which it is based.

The Appellate Division quoted and relied on the Court of Appeals’ decision in Woodson v. Mendon Leasing Corp., 100 NY2d 62 (2003), which is the leading authority on both CPLR 5015(a) and the court’s residual inherent power to vacate judgments:

“Pursuant to CPLR 5015(a), a court that rendered a judgment or order may relieve a party from it upon such terms as may be just, upon the grounds of excusable default; newly discovered evidence; fraud, misrepresentation, or other misconduct of an adverse party; lack of jurisdiction to render the judgment or order; or reversal, modification, or vacatur of a prior judgment or order upon which it is based (see Woodson v. Mendon Leasing Corp., 100 NY2d 62, 68; JPMorgan Chase Bank, N.A. v. Dev, 176 AD3d 691, 692).”

Further, Woodson confirmed that, apart from CPLR 5015(a), courts possess an inherent authority to vacate their own judgments for “sufficient reason and in the interests of substantial justice.” The Belizaire court quoted this as well:

“‘In addition to the grounds set forth in [CPLR] 5015(a), a court may vacate its own judgment for sufficient reason and in the interests of substantial justice’ (Woodson v. Mendon Leasing Corp., 100 NY2d at 68; see Nash v. Port Auth. of N.Y. & N.J., 22 NY3d 220, 226; Legal Servicing, LLC v. Gomez, 229 AD3d 785, 786).”

However, as the Court of Appeals emphasized in Matter of McKenna v. County of Nassau, Off. of County Attorney, 61 NY2d 739, 742, this inherent power is not plenary:

“A court’s inherent power to exercise control over its judgments is not plenary, and should be resorted to only to relieve a party from judgments taken through fraud, mistake, inadvertence, surprise or excusable neglect” (internal quotation marks and alteration omitted).

The Appellate Division in Belizaire echoed this limitation, citing McKenna as well as more recent Second Department authorities applying this restrained view of the inherent power:

Legal Servicing, LLC v. Gomez, 229 AD3d 785, 786–787,
JPMorgan Chase Bank, N.A. v. Dev, 176 AD3d 691, 692–693,
CitiMortgage, Inc. v. Maldonado, 171 AD3d 1007, 1008–1009, and
Nationstar Mtge., LLC v. Russo, 167 AD3d 913.

The message is clear: despite the seemingly broad phrase “interests of substantial justice,” the inherent power is bounded by equity and is generally limited to cases involving:

fraud by an adverse party,
mistake or inadvertence,
surprise, or
excusable neglect.

C. Application to Belizaire’s Motion: No Ground for Vacatur

Applying these standards, the Appellate Division held that Belizaire failed to meet her burden.

First, she did not articulate any of the five statutory grounds in CPLR 5015(a). There was:

no claim of excusable default in failing to oppose the original summary judgment motion or the motion to confirm the referee’s report,
no newly discovered evidence,
no claim of fraud or misconduct by the plaintiff in obtaining the original judgment,
no jurisdictional defect, and
no change in the underlying basis of the judgment by reversal or modification of a prior order.

Second, she provided no evidentiary basis to invoke the court’s inherent power in the interests of substantial justice. The court stated:

“Here, the defendant failed to articulate a basis for vacating the order and judgment of foreclosure and sale pursuant to CPLR 5015(a) and failed to provide any evidence of fraud, mistake, inadvertence, surprise, or excusable neglect that would warrant vacatur in the interests of substantial justice (see Legal Servicing, LLC v. Gomez, 229 AD3d at 787; CitiMortgage, Inc. v. Maldonado, 171 AD3d at 1009; Nationstar Mtge., LLC v. Russo, 167 AD3d 913; see also US Bank N.A. v. Burgan, 233 AD3d 421, 423).”

The court therefore found no abuse of discretion in the Supreme Court’s refusal to disturb the foreclosure judgment.

D. Trial Period Plan Compliance: No Automatic Entitlement to Modification or Vacatur

Perhaps the most practically important portion of the opinion concerns the legal implications of Belizaire’s full compliance with the TPP payment schedule.

The record “reflects that the defendant made all of the payments required by the TPP.” That might appear, at first glance, to give the borrower strong equities. Nonetheless, the Appellate Division emphasized that the TPP itself set out additional prerequisite conditions that had to be satisfied before a permanent loan modification would be executed.

The court cited Capital One, N.A. v. McComb, 180 AD3d 743, 744, in which the Second Department had already held that meeting the payment obligations of a trial period plan does not automatically entitle a borrower to a permanent loan modification where the TPP makes that modification contingent upon additional steps or conditions.

In Belizaire, those additional conditions were not met:

There was no evidence that the borrower satisfied all documentary or other requirements specified in the TPP for the permanent modification.
The record was clear that the parties never entered into a permanent loan modification agreement.
The borrower stopped making payments after completing the trial-period payments on October 1, 2020.

Accordingly, the court concluded:

“Although the record reflects that the defendant made all of the payments required by the TPP, the TPP included additional prerequisite conditions to the execution of a loan modification agreement, for which there is no evidence of compliance (see Capital One, N.A. v. McComb, 180 AD3d 743, 744). Moreover, the record reflects that the parties did not enter into a permanent loan modification agreement after the TPP, [and] the defendant did not make any additional payments after October 1, 2020…”

Crucially, the Appellate Division endorsed the trial court’s chosen remedy: rather than vacating the foreclosure judgment, the Supreme Court amended the judgment to credit the post-judgment payments:

“...and the Supreme Court granted that branch of the plaintiff's cross-motion which was to amend the order and judgment of foreclosure and sale to reflect the payments made after the order and judgment of foreclosure and sale was entered.”

The decision thus clarifies that:

Post-judgment payments made under a trial period plan will be credited toward the amount due under the judgment.
However, such payments do not themselves constitute a settlement, novation, or automatic vacatur of the foreclosure judgment, especially in the absence of a fully executed permanent loan modification agreement.

E. Preservation of Good-Faith Arguments Under CPLR 3408(f)

Belizaire argued on appeal that the plaintiff had not acted in good faith in contravention of CPLR 3408(f), which imposes a duty on both parties to negotiate in good faith during mandatory settlement conferences in residential foreclosure cases.

The Appellate Division held that this argument was not properly before it because it was raised for the first time on appeal, citing U.S. Bank N.A. v. Seepersaud, 207 AD3d 499, 501:

“The defendant’s contention that the plaintiff failed to act in good faith in contravention of CPLR 3408(f), raised for the first time on appeal, is not properly before this Court (see U.S. Bank N.A. v. Seepersaud, 207 AD3d 499, 501).”

This portion of the decision reinforces two points:

Preservation requirement: Arguments about the bank’s good or bad faith under CPLR 3408(f) must be raised and developed in the Supreme Court, typically in connection with the settlement conference process or on subsequent motions. They cannot be deployed for the first time as a last-ditch effort on appeal.
Procedural posture matters: Even equitable or policy-heavy arguments (like good faith in foreclosure settlement) are bound by standard rules of appellate review and issue preservation.

F. Overall Holding

Synthesizing the above, the Appellate Division’s core holding is:

Where a borrower has fully performed the payment obligations under a trial period plan offered after entry of a foreclosure judgment, but has not satisfied all other conditions for a permanent modification and no permanent modification agreement is executed, the borrower is not entitled to vacatur of the foreclosure judgment or dismissal of the foreclosure action. The appropriate relief is merely to amend the judgment to credit the payments, and no ground for vacatur exists under CPLR 5015(a) or the court’s inherent power in the interests of substantial justice.

V. Impact and Significance

A. Impact on Borrowers and Foreclosure Defense Strategy

Belizaire carries important lessons for borrowers and their counsel:

TPP Payments Are Not Self-Executing Modifications — Even if a borrower makes all required trial payments, that does not guarantee a permanent modification or vacatur of a foreclosure judgment. Borrowers must:
- meet all conditions in the TPP, and
- ensure that a permanent modification agreement is actually executed in writing.
Finality of Judgments — Once a foreclosure judgment is entered, the grounds for setting it aside are narrow. Post-judgment negotiations or partial payments, by themselves, do not constitute a legal basis for vacatur.
Importance of Opposing Motions — By not opposing the plaintiff’s cross-motion to amend the foreclosure judgment, Belizaire forfeited her right to appellate review of that issue. Counsel must be vigilant in opposing all adverse motions to preserve appellate rights.
Preserving Good-Faith Claims — Alleged lack of good faith by a lender in the settlement conference process must be affirmatively raised and litigated in the Supreme Court. It cannot be held in reserve and asserted first on appeal.

B. Impact on Lenders and Servicers

For lenders and servicers, the decision validates several important practices:

Use of TPPs After Judgment — The opinion confirms that offering a trial period plan after a foreclosure judgment is permissible and does not, in and of itself, jeopardize the judgment’s validity, so long as:
- the TPP is clearly documented as a trial arrangement,
- entry into a permanent modification is expressly conditioned on further requirements, and
- no permanent modification is represented as having taken effect until a written agreement is executed.
Amendment Rather Than Vacatur — When borrowers make post-judgment payments, lenders can (and should) seek to amend the foreclosure judgment to reflect those payments, rather than allowing any suggestion that the judgment has been impliedly waived or superseded.
Litigation Strategy — The court’s insistence that a borrower’s performance under a TPP does not automatically void a judgment protects servicers against claims that trial accommodations equate to a binding settlement of the foreclosure itself.

C. Doctrinal Impact: “Substantial Justice” and Its Limits

Belizaire contributes to a line of cases cabining the broad-sounding phrase “interests of substantial justice” within concrete equitable bounds.

The decision, in harmony with Woodson, McKenna, Gomez, Maldonado, Russo, and Burgan, makes clear that:

Sympathy for a borrower’s effort or hardship is not by itself a sufficient reason to vacate a judgment.
Courts will require a showing of fraud, mistake, inadvertence, surprise, or excusable neglect — in other words, some defect in how the judgment was obtained or in the defendant’s ability to litigate it.
Post-judgment conduct, such as voluntary partial payments or trial-modification efforts, does not retroactively create such a defect.

This enhances predictability and finality in foreclosure litigation: once a judgment is properly entered, courts are reluctant to unwind it absent a clear statutory or equitable ground.

D. Clarifying the Law on TPPs and Loan Modifications

Building on Capital One v. McComb, Belizaire reinforces the proposition that:

Trial Period Plans are conditional arrangements, not necessarily binding modifications.
The specific language of the TPP governs: if it states that a permanent modification will occur only if both the payments are made and certain additional prerequisites are satisfied (such as timely submission of documents, continued eligibility, and execution of final modification documents), then those additional conditions must be met.
Borrowers cannot rely solely on having made the scheduled trial payments to argue that the lender is now barred from enforcing the original loan terms or foreclosure judgment.

This has broader implications in the context of post-crisis mortgage servicing, where TPPs and similar arrangements remain common.

VI. Complex Concepts Simplified

For clarity, the following are brief explanations of some of the key legal concepts and terminology that appear in the opinion and in this commentary.

A. Order and Judgment of Foreclosure and Sale

In New York foreclosure practice, an “order and judgment of foreclosure and sale” is the final judgment that:

determines the amount owed on the mortgage,
confirms a referee’s computation (if a referee was appointed), and
directs the sale of the mortgaged property at auction.

It functions as both an order and a judgment, authorizing the referee to conduct the sale.

B. Order of Reference and Referee

Before a foreclosure judgment is entered, the court often issues an order of reference appointing a referee. The referee’s role is to:

compute the total amount due (principal, interest, fees, etc.), and
later, conduct the actual foreclosure sale after judgment is entered.

C. CPLR 5015(a) — Vacatur of Judgments

CPLR 5015(a) is a New York procedural rule that allows a court to relieve a party from a judgment or order on certain specified grounds, such as:

Excusable default — where a party failed to appear or respond due to a reasonable excuse and has a potentially meritorious defense.
Newly discovered evidence — evidence that could not reasonably have been discovered before the judgment and would probably have changed the outcome.
Fraud, misrepresentation, or misconduct by an opposing party that tainted the judgment.
Lack of jurisdiction — for example, if the court did not have personal jurisdiction over the defendant when it entered the judgment.
Subsequent reversal or modification of a prior order upon which the judgment is based.

D. Inherent Power and “Interests of Substantial Justice”

Separate from CPLR 5015(a), courts have an inherent authority to vacate their own judgments when necessary in the “interests of substantial justice.” However, as repeated in Woodson, McKenna, and now Belizaire, this power is confined to cases where:

the judgment resulted from fraud,
mistake or inadvertence,
surprise, or
excusable neglect.

It is not a catch-all for any situation where a party believes the result is harsh or unfair.

E. Trial Period Plan (TPP)

A Trial Period Plan is a temporary arrangement, commonly used in mortgage servicing, in which:

the borrower agrees to make a series of trial payments, often at a reduced amount, and
the lender considers the borrower for a permanent loan modification.

Whether full compliance with a TPP entitles the borrower to a permanent modification depends entirely on the TPP’s written terms. Many TPPs make the modification conditional on both:

successful trial payments, and
additional prerequisites (documentation, continued eligibility, and signed final modification documents).

F. CPLR 3408(f) — Good Faith in Foreclosure Settlement Conferences

CPLR 3408(f) requires both the lender and the borrower, in residential foreclosure actions, to “negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible.” Failure to act in good faith can have remedies such as:

denial of certain relief,
sanctions, or
other determinations tailored to correct the lack of good faith.

However, any claim that a party failed to negotiate in good faith must be:

raised and litigated in the Supreme Court (the trial court), and
properly preserved for appellate review.

G. Appeal from Default (CPLR 5511)

CPLR 5511 limits appeals to “aggrieved” parties. A party is not “aggrieved” by an order entered on its own default because it did not litigate or oppose the relief below. In such circumstances:

the proper remedy is often a motion in the trial court to vacate the default,
not a direct appeal to the Appellate Division.

VII. Conclusion

U.S. Bank Trust, N.A. v. Belizaire is not a dramatic doctrinal shift, but it is a clear and important application of several interlocking principles in New York foreclosure and civil procedure law.

The decision firmly establishes that:

Post-judgment trial period plan payments do not, without more, justify vacating a foreclosure judgment. Even full compliance with the TPP’s payment schedule does not guarantee a permanent loan modification where the TPP itself contains additional conditions that are unmet and no permanent modification agreement is executed.
The avenues for vacatur under CPLR 5015(a) and under the court’s inherent powers are narrow and strictly applied. A borrower seeking relief from a foreclosure judgment must show one of the specified statutory grounds or an equitable defect such as fraud, mistake, or excusable neglect.
Amendment of the judgment to credit post-judgment payments is the appropriate remedy when partial payments are made after judgment, rather than vacatur or dismissal absent a formal settlement or modification.
Preservation of issues remains central. Borrowers must oppose adverse motions in the trial court to preserve appellate review and must raise any claims regarding the lender’s lack of good faith under CPLR 3408 in the Supreme Court, not for the first time on appeal.

From a broader perspective, Belizaire promotes:

the finality and stability of foreclosure judgments,
clarity in the legal effect of trial period plans and post-judgment payment arrangements, and
a disciplined use of the courts’ equitable powers, confining “interests of substantial justice” to situations involving identifiable procedural or substantive defects in the judgment’s procurement.

Practitioners in the field of mortgage foreclosure litigation should view Belizaire as a strong confirmation that trial-period workout efforts and post-judgment negotiations—while often beneficial and encouraged—will not casually unsettle properly entered foreclosure judgments absent clear, legally recognized grounds for vacatur.