THE PROOF OF THE AMOUNT DUE PURSUANT TO THE MORTGAGE WAS NOT SUPPORTED BY THE RELEVANT BUSINESS RECORDS; THEREFORE THE REFEREE’S REPORT SHOULD NOT HAVE BEEN CONFIRMED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the referee’s report in this foreclosure action was based on hearsay and should not have been confirmed:

“The report of a referee should be confirmed whenever the findings are substantially supported by the record, and the referee has clearly defined the issues and resolved matters of credibility” … . “The referee’s findings and recommendations are advisory only and have no binding effect on the court, which remains the ultimate arbiter of the dispute” … .

Here, as the defendant correctly contends, the affidavit of the plaintiff’s servicing agent, submitted for the purpose of establishing the amount due and owing under the subject mortgage loan, “constituted inadmissible hearsay and lacked probative value because the affiant did not produce any of the business records [s]he purportedly relied upon in making [her] calculations” … . Thus, the referee’s findings with respect to the total amount due upon the mortgage were not substantially supported by the record … . U.S. Bank N.A. v Barton, 2022 NY Slip Op 04319, Second Dept 7-6-22

Practice Point: In foreclosure actions where the proof is presented by affidavit, if the affidavit relies on business records which are not attached, the affidavit is inadmissible hearsay.