In the case of Bankers Trust Co. v. Mallis et al., 1977, the U.S Supreme Court ruled on a dispute over whether or not federal law required notice to be given before acceleration of payment under a mortgage loan agreement in default. The respondents, Mr and Mrs Mallis, had defaulted on their home mortgage loan from Bankers Trust Company who then sought foreclosure without providing prior notification of acceleration as stipulated by New York State law but not explicitly by Federal Law. The court held that while federal law did regulate many aspects of mortgages insured by the Federal Housing Administration (FHA), it did not require notice before accelerating payment after defaulting on an FHA-insured mortgage loan agreement. Therefore, state laws requiring such notices were not pre-empted by federal legislation and could still apply in these cases.

In the dissenting opinion for Bankers Trust Co. v. Mallis, Justice Stevens argued that the majority's decision was inconsistent with previous rulings and could lead to confusion in future cases. He contended that a letter from an attorney should not be considered as formal notice of default because it does not meet the requirements set out by law, which stipulates that such notices must come directly from lenders or their authorized agents. Furthermore, he expressed concern about potential abuses if attorneys were allowed to issue these notices without proper authorization or oversight. He also disagreed with the majority's interpretation of New York law regarding foreclosure proceedings, arguing that they had misread and misapplied relevant statutes.