ALTHOUGH THE RPAPL 1304 FORECLOSURE NOTICE, TO BE VALID, MUST ACCURATELY STATE THE DEFAULT AMOUNT AND THE LENGTH OF TIME THE BORROWER HAS BEEN IN DEFAULT, THERE WAS NO SHOWING HERE THE STATED AMOUNT WAS INACCURATE; THE BANK DID NOT DEMONSTRATE IT WAS IN POSSESSION OF THE NOTE AT THE TIME THE ACTION WAS COMMENCED AND THEREFORE DID NOT DEMONSTRATE STANDING TO FORECLOSE; THE EVIDENCE OF A MERGER SUBMITTED IN REPLY COULD NOT BE CONSIDERED ON THE STANDING ISSUE (SECOND DEPT).

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice Dillon, determined the notice of foreclosure required by RPAPL 1304, which, to be valid, must state the default amount and length of time the borrower has been in default, was not shown to be inaccurate. But the plaintiff bank did not demonstrate standing to foreclose. The evidence that the bank’s standing was based on a merger with the holder of the note was not submitted until the reply, and therefore should not have been considered:

Where an RPAPL 1304 notice fails to reflect information mandated by the statute, including but not limited to the duration and an amount of the default, the statute will not have been strictly complied with and the notice will not be valid … . …

… [T]here is no reason for us to conclude at this juncture that the $64,862.12 default sum set forth in the plaintiff’s RPAPL 1304 notice reflects any actual error. The second paragraph of the plaintiff’s 30-day notice explains that the $64,862.12 amount claimed to be due includes principal, interest, escrow payments, and late charges, which would necessarily raise the gross amount due to a sum that exceeds the amount of the missed principal. * * *

… [T]he plaintiff failed to establish, prima facie, that it had standing to commence the action. The plaintiff is not the original lender. The subject note, though attached to the complaint, bears no indorsement. And further, the plaintiff failed to produce evidence in admissible form as part of its prima facie case that the note was assigned to it prior to the date of commencement of the action … . …

The certificate of merger showing that ESB-LI merged into the plaintiff does not demonstrate that the plaintiff is the holder of the subject note. It was submitted to the Supreme Court for the first time in the plaintiff’s reply papers, and therefore, could not be considered as part of the plaintiff’s initial prima facie proof of standing … . Emigrant Bank v Cohen, 2022 NY Slip Op 02532, Second Dept 4-20-22

Practice Point: To be valid, the RPAPL 1304 notice of foreclosure must accurately state the amount of the default and the length of time the borrower has been in default (there was no showing the amount was inaccurate here). If the bank does not demonstrate it was holding the note at the time the foreclosure was commenced in its moving papers, it has not demonstrated standing to foreclose. Evidence of standing submitted in reply papers should not be considered.