You are here: / Foreclosure
image_pdfPDF Friendly Versionimage_printPrint Friendly Version
, ,

PLAINTIFF BANK DID NOT STRICTLY COMPLY WITH THE NOTICE PROVISIONS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304 AND DID NOT DEMONSTRATE DEFENDANT HAD DEFAULTED IN THIS FORECLOSURE ACTION; THE DECISION ILLUSTRATES THE LEVEL OF STRICT COMPLIANCE WITH RPAPL 1304 WHICH IS REQUIRED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank was not entitled to summary judgment in this foreclosure action. Plaintiff did not demonstrate compliance with the notice provisions of Real Property Actions and Proceedings Law (RPAPL) 1304 and did not demonstrate defendant defaulted. The decision illustrates the level of strict compliance with RPAPL 1304 which is required by the courts:

The version of RPAPL 1304(2) as it existed at that time required that the 90-day notice provide a list of five housing counseling agencies “that serve the region where the borrower resides.” …

… Here, the notice prepared by the plaintiff listed, as one of the required five housing counseling agencies, an agency located more than 300 miles away from the defendants’ residence. … [I]t is the plaintiff’s burden, on its motion for summary judgment, to demonstrate its strict compliance with the applicable provisions of RPAPL 1304. By failing to submit evidence that the Watertown agency served the region wherein the defendants resided, the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law and thus its motion for such relief should have been denied … . …

Additionally, the affidavit submitted by the plaintiff for the purpose of demonstrating that it properly served its 90-day notice did not specify that the notice was served in an envelope that was separate from any other mailing or notice (see RPAPL 1304 [2]). While the plaintiff attempted to remedy this deficiency in its reply papers, even assuming that its reply affidavit may properly be considered … , that affidavit contained only a conclusory assertion that the mailing was done in a separate envelope, with no assertion by the affiant that she had any personal knowledge of the actual mailing or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed … .

The plaintiff also failed to establish, prima facie, the defendants’ default in payment. While the affidavit submitted by the plaintiff made the requisite showing that the affiant was familiar with the plaintiff’s recordkeeping practices and procedures with respect to the defendants’ payment history, the affiant failed to submit any business record substantiating the alleged default. Conclusory affidavits lacking a factual basis are without evidentiary value … . USBank N.A. v Haliotis, 2020 NY Slip Op 03819, Second Dept 7-8-20

 

/0 Comments/by
, , ,

PLAINTIFF DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISIONS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304 AND 1306 IN THIS FORECLOSURE ACTION; PROOF REQUIREMENTS EXPLAINED IN SOME DEPTH (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff loan services company (Aurora/Nationstar) did not demonstrate compliance with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 13O4 and 1306. Therefore, Aurora’s motion for summary judgment in this foreclosure action should not have been granted. The court, noting that “lack of notice’ may be raised at any time, explained defendant did not waive the “lack of notice” defense because defendant denied the plaintiff’s complaint-allegations of compliance and raised the issue in opposition to plaintiff’s motion for summary judgment. The Second Department further found defendant was not entitled to summary judgment because “lack of notice” was not demonstrated as a matter of law. The decision provides a valuable explanation of the proof requirements for compliance with RPAPL 1304 and 1306:

In support of its motions, Aurora submitted the affidavit of Jerrell Menyweather, a document execution specialist employed by Nationstar, along with a copy of a 90-day notice addressed to the defendant, and a proof of filing statement pursuant to RPAPL 1306 from the New York State Banking Department. Although Menyweather stated in the affidavit that the RPAPL notices were sent to the defendant at her last known address and the subject property, Menyweather did not have personal knowledge of the mailing, and Aurora failed to provide any documents to prove that the notices were actually mailed … . Aurora also failed to submit a copy of any United States Post Office document indicating that the notices were sent by registered or certified mail as required by the statute … . Furthermore, Menyweather did not aver that he was familiar with Aurora’s mailing practices and procedures, and therefore did not establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed … . Nationstar Mtge., LLC v Matles, 2020 NY Slip Op 03793, 7-8-20

 

/0 Comments/by
, ,

ATTEMPTS TO DE-ACCELERATE THE DEBT, INCLUDING VOLUNTARY DISCONTINUANCES AFTER THE DEATH OF THE DEFENDANT, WERE INEFFECTUAL, THE FORECLOSURE ACTION IS TIME-BARRED (THIRD DEPT).

The Third Department, over a two-justice concurrence, determined the statute of limitations began to run in 2009 when the mortgage debt was accelerated in this foreclosure action and the attempts to subsequently de-accelerate the debt after the death of the defendant, including voluntary discontinuances, were ineffectual. Therefore the action was time-barred:

With respect to the notices of discontinuance in the 2009 and 2013 actions, we note that we, as well as other Appellate Divisions, have held that the voluntary discontinuance of an action, without more, will not generally constitute an affirmative act that revokes a lender’s election to accelerate a debt … . * * *

In the 2009 action, plaintiff filed its notice of voluntary discontinuance roughly 13 months after decedent had passed away, without having sought substitution of a legal representative to act on behalf of decedent’s estate (see CPLR 1021; see also SCPA 1002, 1401, 1402 [1] [b]). Thus, as the action was stayed and there was no substitution of a proper defendant, the notice of voluntary discontinuance filed in the 2009 action was without effect. …  As for the notice of discontinuance filed in the 2013 action, plaintiff commenced that action against decedent, despite the fact that she had died more than two years earlier. As a result, the 2013 action was a nullity from its inception and the subsequent notice of voluntary discontinuance was void … .

We similarly find that, under the circumstances of this case, the July 2015 and September 2015 notices did not constitute affirmative acts that would notify decedent’s legal representative that the prior debt acceleration was revoked, that the debt was de-accelerated and that the loan was reinstated to installment payments. Irrespective of the content and substance of the July 2015 and September 2015 notices, plaintiff addressed the notices to decedent, who had been deceased for more than four years, and mailed them to the mortgaged property. The record reflects that the September 2015 letter, which was sent by both regular mail and certified mail, was returned as undeliverable. Beneficial Homeowner Serv. Corp. v Heirs at Large of Ramona E. Thwaits, 2020 NY Slip Op 03709, Third Dept 7-2-20

 

/0 Comments/by
, ,

REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304 NOTICE REQUIREMENTS NOT MET; PLAINTIFF BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate compliance with the notice provisions of Real Property Actions and Proceedings Law (RPAPL) 1304. Therefore plaintiff’s motion for summary judgment in this foreclosure action should not have been granted:

… [T]he plaintiff failed to establish its entitlement to judgment as a matter of law with respect to compliance with the notice requirement of RPAPL 1304. Proper service of RPAPL 1304 notice containing the statutorily mandated content is a condition precedent to the commencement of the foreclosure action, and failure of a plaintiff to make this showing requires denial of its motion for summary judgment … . The lender must submit proof of mailing (such as an affidavit of service or domestic return receipts with attendant signatures) or an affidavit either from the individual who performed the actual mailing or an individual with personal knowledge of the lender’s standard office mailing procedure … . Here, the unsubstantiated and conclusory statement of the plaintiff’s attorney in an affidavit submitted in support of the motion that RPAPL 1304 notice was properly mailed to the defendant is insufficient to establish compliance with the statute as a matter of law … . Ventures Trust 2013-I-H-R by MCM Capital Partners, LLC v Williams, 2020 NY Slip Op 03561. Second Dept 6-24-20

 

/0 Comments/by
, ,

PLAINTIFF BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE OF DEFAULT PROVISIONS OF THE MORTGAGE AND THE NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304; PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not submit sufficient evidence of compliance with the notice-of-default provisions of the mortgage and did not demonstrate the loan was a reverse mortgage exempt from the notice requirement of Real Property Actions and Proceedings Law (RPAPL) 1304:

Although the plaintiff submitted a purported notice of default … , the plaintiff failed to submit an affidavit attesting to the mailing of the purported … notice, whether it was mailed at all, and if so, whether the mailing was by first class mail or, if otherwise, whether notice was actually delivered to [defendant’s] notice address, as required by the provisions in sections 15 and 22 of the mortgage agreement. …

… [T]he attorney’s affirmation submitted by the plaintiff which stated that the purported … notice was “in full compliance with the terms of the mortgage” was unsubstantiated and conclusory. Neither the attorney’s affirmation nor the copy of the purported … notice established “that the required notice was mailed by first class mail or actually delivered to the notice address if sent by other means, as required by the mortgage agreement” … . …

… [T]he plaintiff also failed to establish, as a matter of law, its compliance with the 90-day notice requirements of RPAPL 1304. “[P]roper service of RPAPL 1304 notice on the borrower or borrowers is a condition precedent to the commencement of a foreclosure action, and the plaintiff has the burden of establishing satisfaction of this condition” … . Deutsche Bank Natl. Trust Co. v Crimi, 2020 NY Slip Op 03376, Second Dept 6-17-20

 

/0 Comments/by
, ,

UNDER THE TERMS OF THE MORTGAGE, THE DEATH OF THE BORROWER DID NOT ACCELERATE THE DEBT; BECAUSE THE DEBT WAS NOT ACCELERATED THE INSTALLMENT PAYMENTS FOR THE SIX YEARS PRIOR TO THE COMMENCEMENT OF THE FORECLOSURE ACTION WERE STILL OWING AND THE ACTION WAS NOT BARRED BY THE STATUTE OF LIMITATIONS (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the foreclosure action should not have been dismissed as time-barred, noting that the death of the borrower did not accelerate the debt. Therefore the installment payments due during the six year prior to commencing the action were still owing:

An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213 [4]). Here, the note provided that decedent agreed to repay the loan in monthly installments from September 2007 to August 2032. “[W]ith respect to a mortgage payable in installments, there are separate causes of action for each installment accrued, and the [s]tatute of [l]imitations [begins] to run, on the date each installment [becomes] due” … . Plaintiff commenced this foreclosure action on September 15, 2017. Therefore, recovery for the installments due within the six years prior to that date, i.e., September 15, 2011, is not barred by the statute of limitations. To the extent that plaintiff seeks recovery for installments due before that date, recovery is barred by the statute of limitations … . * * *

We reject defendants’ contention that the debt accelerated automatically upon decedent’s death. The mortgage provides that there is a default upon decedent’s death, but it does not provide that the death of decedent would automatically accelerate the debt. Rather, the mortgage provides that the lender may accelerate the debt upon a default and, here, defendants did not establish that plaintiff chose to accelerate the debt at any time before the complaint was filed … . Wilmington Sav. Fund Socy. FSB v Deliberto, 2020 NY Slip Op 03297, Fourth Dept 6-12-20

 

/0 Comments/by
,

BANK DID NOT PROVE COMPLIANCE WITH RPAPL 1303; BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for summary judgment in this foreclosure action should not have been granted because the bank did not prove compliance with the notice provisions of Real Property Actions and Proceedings Law (RPAPL) 1303:

“Proper service of the notice required by RPAPL 1303 notice is a condition precedent to the commencement of a foreclosure action, and it is the plaintiff’s burden to show compliance with that statute” … .

Here, in support of its motion, the plaintiff submitted the process server’s affidavit indicating that a notice was served with the summons and complaint. However, the plaintiff did not submit a copy of the RPAPL 1303 notice allegedly served, and the process server made no averments that the notice served complied with the requirements of RPAPL 1303 concerning content and form. The plaintiff, therefore, failed to demonstrate, prima facie, that it complied with RPAPL 1303 … . Flagstar Bank, FSB v Hart, 2020 NY Slip Op 03217, Second Dept 6-10-20

 

/by
, , ,

THE HOLDER OF A DEED INTENDED AS SECURITY IN THE NATURE OF A MORTGAGE MUST PROCEED BY FORECLOSURE TO EXTINGUISH THE MORTGAGOR’S INTEREST; HERE THE SUBSEQUENT GOOD FAITH PURCHASERS OF THE PROPERTY WERE ENTITLED TO SUMMARY JUDGMENT DISMISSING THE MORTGAGEE’S CAUSES OF ACTION SEEKING RESCISSION OF THEIR DEED AND A DECLARATION THEIR DEED WAS NULL AND VOID (SECOND DEPT).

The Second Department determined a deed which facially appears to evidence an absolute conveyance was actually intended as security in the nature of a mortgage. The holder of such a deed (here American Lending) must proceed by foreclosure to extinguish the mortgagor’s interest. The subsequent purchasers of the property (the Romond defendants) were good faith purchasers. Therefore the Romond defendants were entitled to dismissal of American Lending’s complaint seeking rescission of the Romond deed and a declaration the deed was null and void:

In 2009, the defendant Dana Grigg sought to purchase certain property … . When financing for the transaction fell through, Grigg entered into an … agreement with the plaintiff, American Lending Corp. … to borrow … $385,000. The terms of the loan, which were memorialized in a note, included a provision that after 90 days, if the loan had not been repaid in full, American Lending would be authorized to file a joint deed in the property records and to “seek a Summary Judgment instead of following a regular foreclosure proceedings [sic].” In June 2009, Grigg purchased the subject property and executed … a deed from himself to himself and American Lending (… the joint deed). Grigg subsequently defaulted under the terms of the loan. * * *

Real Property Law § 320 provides, in pertinent part, that a “deed conveying real property, which, by any other written instrument, appears to be intended only as a security in the nature of a mortgage, although an absolute conveyance in terms, must be considered a mortgage” … .  … “The holder of a deed given as security must proceed in the same manner as any other mortgagee—by foreclosure and sale—to extinguish the mortgagor’s interest” … .

… [T]he Romond defendants established … that the joint deed was given as security for the loan from American Lending to Grigg. Therefore, pursuant to Real Property Law § 320, the joint deed must be considered a mortgage, and American Lending’s sole remedy for Grigg’s breach of its terms was to commence an action sounding in foreclosure. Moreover, under the circumstances at bar, the Romond defendants established that they were good faith purchasers of the subject property (see Real Property Law § 290 …). American Lending Corp. v Grigg, 2020 NY Slip Op 03211, Second Dept 6-10-20

 

/by
,

THE MERE DISCONTINUANCE OF THE PRIOR FORECLOSURE ACTION DID NOT DE-ACCELERATE THE MORTGAGE DEBT; EXPLICIT NOTICE OF DE-ACCELERATION IS REQUIRED EITHER IN THE MOTION TO DISCONTINUE ITSELF OR IN A SEPARATE NOTICE; THEREFORE THE INSTANT FORECLOSURE ACTION IS TIME-BARRED (SECOND DEPT).

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice Dillon, over an extensive partial dissent, determined the discontinuance of a prior foreclosure action did not, standing alone, de-accelerate the debt. Therefore the instant foreclosure action was time-barred. The Second Department noted that the plaintiff did not submit the motion papers for the discontinuance and therefore did not submit any evidence that the debt was explicitly de-accelerated in those papers, or in any other notice to the defendant. Such explicit notice is required:

A de-acceleration of the full debt revives the borrower’s right to make the monthly payments that became due between the time the loan was accelerated and the time the acceleration was revoked, together with the right to make future monthly installment payments. Since the borrower may continue to assume that its lender or servicer will not accept post-acceleration monthly payments, the lender, in order to effectively rescind the acceleration, should be required to notify the borrower that the right to make monthly payments is restored and that the lender will accept the tender of such payments … . * * *

A bare discontinuance of litigation does not nullify the fact that a contractual right to accelerate has been unilaterally exercised pursuant to the terms of a note. An acceleration of loan debt by the transmittal of a letter or by the commencement of an action in a court of law has legal implications, such as the financial penalties authorized under the note, the potential negative effect upon the borrower’s credit rating, and reliance by the borrower that monthly payments will no longer be expected or accepted and thereby prevent any pay-down of the balance owed. To occur, none of these or other consequences of an acceleration require any permission, ruling, stipulation, decision, or order of a court, as they are independent of the litigation … . Trust v Barua, 2020 NY Slip Op 03095, Second Dept 6-3-20

 

/by
,

NOTICE OF DEFAULT DID NOT ACCELERATE THE MORTGAGE DEBT; THE STATUTE OF LIMITATIONS DID NOT BEGIN TO RUN IN THIS FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the mortgage debt was never accelerated and therefore the six-year statute of limitations did not begin to run in this foreclosure action:

An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4]). “[E]ven if a mortgage is payable in installments …, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt” … .

… [T]he May 3, 2007, notice of default, which advised that the loan would be accelerated if the default was not cured by June 7, 2007, was “nothing more than a letter discussing acceleration as a possible future event, which [did] not constitute an exercise of the mortgage’s optional acceleration clause”  … . U.S. Bank N.A. v Mongru, 2020 NY Slip Op 03137, Second Dept 6-3-20

 

/by

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

Copyright © 2020 New York Appellate Digest, LLC
Site by CurlyHost | Privacy Policy