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IN THIS REVERSE MORTGAGE FORECLOSURE ACTION, DEFENDANT WAS NAMED AS A BORROWER IN THE MORTGAGE (WHICH SHE SIGNED) BUT NOT IN THE NOTE; THE NOTE AND MORTGAGE MUST BE READ AS A SINGLE AGREEMENT, RAISING A QUESTION OF FACT WHETHER DEFENDANT WAS A “SURVIVING BORROWER” THEREBY PRECLUDING FORECLOSURE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant raised a question of fact in this reverse-mortgage foreclosure action. The mortgage allowed foreclosure upon the death of a borrower (Goldman) as long as the property is not occupied by a “surviving borrower.” Although the defendant was not named as a borrower in the note, she was names as a borrower in the mortgage, which she signed:

… [T]he defendant raised a triable issue of fact as to whether she was a “surviving Borrower” under the note and mortgage, which would preclude the plaintiff from requiring payment in full upon Goldman’s death … . Although the defendant was not named as a borrower in the note, she signed the mortgage in which she was named as a borrower. “Generally, the rule is that separate contracts relating to the same subject matter and executed simultaneously by the same parties may be construed as one agreement” … . Here, the note and mortgage, construed together, were ambiguous as to whether the defendant was intended to be a borrower … . Where, as here, contract language is “reasonably susceptible of more than one interpretation, . . . extrinsic or parol evidence may be . . . permitted to determine the parties’ intent as to the meaning of that language” …  Here, the extrinsic evidence submitted by the parties raised a triable issue of fact as to whether the defendant was a borrower under the subject loan. Although Goldman, and not the defendant, was named as the borrower on various documents, including the loan application, both Goldman and the defendant signed a copy of a Truth-in-Lending Act disclosure. Moreover, in her affidavit, the defendant averred that when she and Goldman applied for the reverse mortgage, they were “assured that when [Goldman] passed away, that I would get the house and that I could continue to live there.” Nationstar Mtge., LLC v Hoar, 2022 NY Slip Op 05853, Second Dept 10-19-22

Practice Point: Here the mortgage and the note must be read as a single agreement. The fact that defendant was named in the mortgage, which she signed, but not named in the note, raised a question of fact whether she was a “surviving borrower,” precluding the reverse-mortgage foreclosure.

 

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