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RPAPL 1301, WHICH PROHIBITS SIMULTANEOUS ACTIONS AT LAW TO RECOVER ON A NOTE AND ACTIONS IN EQUITY TO FORECLOSE A MORTGAGE, DOES NOT APPLY TO OUT-OF-STATE PROPERTIES; RPAPL 1371 DOES NOT APPLY TO OUT-OF-STATE FORECLOSURES AND THEREFORE DOES NOT PROVIDE A BASIS TO DEEM A JUDGMENT SATISFIED UPON A FORECLOSURE SALE (FIRST DEPT).

The First Department noted that RPAPL 1301 and 1371 do not apply to out-of-state foreclosures:

The motion court properly rejected defendants’ position that RPAPL 1301 was a ground to deny plaintiff’s motion. That section “prohibits a mortgage lender seeking repayment of a loan from simultaneously prosecuting an action at law to recover upon a promissory note and an action in equity to foreclose the mortgage” … . However, RPAPL 1301 does not apply “where, as here, the property securing the loan is located outside of New York State” … . This is the case even though the parties in their loan documents agreed that New York law would govern any disputes arising from the agreements.

Similarly, RPAPL 1371 does not apply to out-of-state foreclosures and therefore does not provide a basis to deem the judgment against defendants satisfied upon the foreclosure sale of the properties … . Thus, defendants’ motion seeking an order deeming the judgment satisfied because plaintiff failed to move for a deficiency judgment after the out-of-state properties were foreclosed upon and sold was also properly denied. WPC Billboard Lender LLC v Bartkowski, 2026 NY Slip Op 02951, First Dept 5-12-26

 

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PLAINTIFF DID NOT PROVE THE RPAPL 1304 NOTICE OF FORECLOSURE WAS PROPERTY MAILED TO DEFENDANT; THE MAILING WAS DONE BY A THIRD PARTY AND NO FIRST-HAND KNOWLEDGE OF THE THIRD-PARTY’S MAILING PROCEDURE WAS PRESENTED (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the plaintiff in this foreclosure action did not demonstrate the RPAPL 1304 notice of foreclosure was properly mailed to defendant. The mailing was done by a third-party and no first-hand evidence of that party’s mailing procedure was presented:

… [T]he affiant did not attest that she was familiar with the standard office mailing procedures of Covius Services, LLC, the third-party vendor that sent the RPAPL 1303 and 1304 notices on behalf of plaintiff. The affidavit therefore did not establish proof of a standard office mailing procedure designed to ensure that items were properly addressed and mailed … . The affidavit also did not address the nature of plaintiff’s relationship with Covius, nor did it address whether Covius’s records were incorporated into plaintiff’s own records or routinely relied upon in plaintiff’s business … . Thus, under the circumstances presented, the tracking numbers on the copies of the 90-day notices did not by themselves suffice to establish proper mailing under RPAPL 1304 … . Wells Fargo Bank, N.A. v Merino, 2026 NY Slip Op 02616, First Dept 4-28-26

Practice Point: If the mailing of the RPAPL 1304 notice of foreclosure is done by a third-party, first-hand knowledge of that party’s mailing procedure must be presented.​

 

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DEFENDANT IN THIS FORECLOSURE TRANSFERRED THE SUBJECT PROPERTY TO A THIRD PARTY DURING THE PROCEEDINGS WHICH ORDINARILY WOULD DIVEST DEFENDANT OF STANDING; HOWEVER, PLAINTIFF DID NOT WAIVE A DEFICIENCY JUDGMENT AND THE TIME FOR SEEKING A DEFICIENCY JUDGMENT HAD NOT PASSED; BECAUSE DEFENDANT RETAINED AN INTEREST IN DEFENDING AGAINST A DEFICIENCY JUDGMENT, DEFENDANT HAD STANDING TO ARGUE THE RPAPL 1304 NOTICE WAS JURISDICTIONALLY DEFECTIVE; THE NOTICE ARGUMENT, HOWEVER, WAS REJECTED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Moulton, determined defendant in this foreclosure action had standing to argue the RPAPL 1304 notice of foreclosure was jurisdictionally defective, despite defendant’s transfer of the subject real property during the foreclosure proceedings. Plaintiff had not waived a deficiency judgment and the time for seeking one had not elapsed. Therefore defendant still had an interest in defending the action, i.e., defendant had standing to contest the notice. The First Department rejected defendant’s notice argument:

It is well settled that a defendant lacks standing to defend the action where it transfers the mortgaged property to a third party during the foreclosure action and the plaintiff waives its right to a deficiency judgment * * *.

… [I]n this case, plaintiff chose not to waive a deficiency judgment and its time to move for a deficiency judgment has not yet expired. Because [defendant] is subject to a potential deficiency judgment and is a debtor on the underlying mortgage, he has an interest in defending the action notwithstanding that he transferred the mortgaged property … and as a result, no longer has the right to redeem the property. Nationstar Mtge. LLC v Vassi, 2026 NY Slip Op 02375, First Dept 4-21-26

Practice Point: If the time for seeking a deficiency judgment in a foreclosure has not passed, a defendant who transferred the subject property to a third party during the foreclosure proceedings still has standing, i.e., defendant has an interest in defending against a deficiency judgment. However, if the plaintiff had waived a deficiency judgment defendant would have lost standing.

 

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AT THE FORECLOSURE TRIAL, THE BANK DEMONSTRATED THE RPAPL 1304 NOTICE OF FORECLOSURE WAS SENT TO DEFENDANT BY CERTIFIED MAIL BUT FAILED TO PROVE THE NOTICE WAS ALSO SENT BY REGULAR MAIL; COMPLAINT DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the proof of mailing of the RPAPL 1304 notice in this foreclosure action was insufficient:

“A plaintiff can establish strict compliance with RPAPL 1304 by submitting domestic return receipts, proof of a standard office procedure designed to ensure that items are properly addressed and mailed, or an affidavit from someone with personal knowledge that the mailing of the RPAPL 1304 notice actually happened” … . Here, although the certified mailing receipt bearing the defendant’s signature upon delivery was sufficient to establish the mailing of one notice by certified mail … , the label submitted as proof of the regular first-class mailing, with no postage, no address of intended recipient, “no indicia of actual mailing such as postal codes and . . . [no] mailing receipts or tracking information” … , was insufficient to establish that the notice was actually mailed by regular first-class mail … . Since the plaintiff also failed to submit “proof of a standard office procedure designed to ensure that items are properly addressed and mailed,” or testimony “from someone with personal knowledge that the mailing of the RPAPL 1304 notice actually happened” … , the plaintiff failed to establish its strict compliance with RPAPL 1304 at the nonjury trial … . Bank of N.Y. Mellon v Robustello, 2026 NY Slip Op 00340, Second Dept 1-28-26

Practice Point: The RPAPL 1304 notice of foreclosure requirements must be strictly complied with. Here, at trial, the bank proved the RPAPL 1304 notice was sent by certified mail and received by the defendant, but the bank failed to prove the RPAPL 1304 notice was also sent by regular mail. The complaint was dismissed.

 

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​ IN THIS FORECLOSURE ACTION, THE REQUEST FOR A SETTLEMENT CONFERENCE PURSUANT TO CPLR 3408 WAS NOT APPROPRIATE BECAUSE THE BORROWER WAS DECEASED; BECAUSE, UNDER THE FACTS, A SETTLEMENT CONFERENCE WAS NOT A PREREQUISITE FOR FILING A DEFAULT JUDGMENT, THE REQUEST FOR A CONFERENCE DID NOT HOLD THE FORECLOSURE ACTION IN ABEYANCE AND IT SHOULD HAVE BEEN DISMISSED AS ABANDONED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the foreclosure action must be dismissed as abandoned. Plaintiff argued that its request for a settlement conference pursuant to CPLR 3408 constituted “the taking of proceedings” within one year of the default and therefore dismissal of the action as abandoned was precluded. The First Department agreed that, under the circumstances contemplated by CPLR 3408, requesting a settlement conference would demonstrate the action was not abandoned. Here, however, CPLR 3408 did not apply because the borrower was deceased and the action was brought by an executor. Because CPLR 3408 did not apply, the request for a settlement conference did not qualify as “the taking of proceedings:”

… [T]his foreclosure action must be dismissed as abandoned, because plaintiff’s argument is premised on its mistaken assumption that it was required to file an RJI seeking a mandatory conference before it could move for a default judgment. …

… CPLR 3408(a)(1) requires a mandatory settlement conference in “a residential foreclosure action involving a home loan” where “the defendant is a resident of the property subject to foreclosure.” A mandatory conference is not required where the defendant does not reside at the property when the foreclosure action is commenced … . Watkins, the borrower, was not a resident of the property when the foreclosure action was commenced because he died two years earlier.

Additionally, a mandatory conference is required for “a home loan” which is defined, among other things, to include a requirement that “[t]he borrower is a natural person” (RPAPL 1304[6][a][1][i]). Here, the borrower was deceased when plaintiff commenced this action against Thomas in her capacity of executrix of Watkins’s estate. Thomas is neither a borrower, nor a natural person in this context … . Municipal Credit Union v Thomas, 2025 NY Slip Op 06260, First Dept 11-13-25

Practice Point: In a foreclosure action, where the criteria for a settlement conference pursuant to CPLR 3408 are met, a request for a conference within one year of a default will constitute “the taking of proceedings” and preclude dismissal of the action as abandoned. However where, as here, CPLR 3408 is inapplicable because the borrower is deceased, the request for a settlement conference did not constitute “the taking of proceedings” and did not preclude a finding of abandonment.

 

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AT TRIAL IN THIS FORECLOSURE ACTION, PLAINTFF FAILED TO PROVE STANDING TO FORECLOSE AND FAILED TO PROVE COMPLIANCE WITH THE NOTICE-OF-FORECLOSURE MAILING REQUIREMENTS OF RPAPL 1304; COMPLAINT DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court and dismissing the foreclosure complaint, determined the plaintiff did not demonstrate standing to foreclose and did not demonstrate compliance with the notice-of-foreclosure mailing requirements of RPAPL 1304:

… [S]ince the witness on the issue of standing proffered by the plaintiff at the trial testified, among other things, that the purported allonges that were with the original note were not stapled to the note, and further testified that he did not know when the allonges were executed or attached to the note, the plaintiff failed to establish its standing as the holder of the original note at the time of the commencement of the action. * * *

… [P]laintiff’s witness on the issue of notice did not have knowledge of the mailing practices of the entity which, according to the plaintiff, sent the requisite 30-day and 90-day notices … . Moreover, the business records that were submitted in evidence failed to show that the requisite certified and first-class mailings of the RPAPL 1304 notices or the default notices were actually made to the defendants or that the default notices were actually delivered to their notice address. Thus, the plaintiff failed to demonstrate its strict compliance with RPAPL 1304 and failed to show that the default notices were sent in accordance with the terms of the mortgage agreement … . Onewest Bank FSB v Thomas, 2025 NY Slip Op 05692, Second Dept 10-15-25

Practice Point: If a foreclosure action goes to trial and standing is contested, the bank must prove it has standing to foreclose. In addition, the bank must prove compliance with the notice-of-foreclosure mailing requirements of RPAPL 1304. Here the failure of proof on those issues resulted in dismissal of the complaint.​

 

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IN THIS FORECLOSURE ACTION, FAILURE TO DEMONSTRATE COMPLIANCE WITH THE NOTICE-OF-FORECLOSURE REQUIREMENTS OF RPAPL 1304 RESULTED IN DISMISSAL OF THE COMPLAINT AFTER TRIAL (SECOND DEPT).

The Second Department, determined plaintiff in this foreclosure action did not strictly comply with the provisions of RPAPL 1304, requiring dismissal of the complaint after trial:

… [T]he plaintiff failed to demonstrate its strict compliance with RPAPL 1304. “‘Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action'” … . When this action was commenced in 2015, RPAPL 1304(1) required that the notice sent to borrowers contain the following language: “As of . . . , your home loan is . . . days in default. Under New York State Law, we are required to send you this notice to inform you that you are at risk of losing your home. You can cure this default by making the payment of . . . dollars by . . .” … .

Here, at the nonjury trial, the plaintiff submitted the notice sent to the defendant, which omitted the cure date as required by the statute. Thus, the plaintiff failed to establish its compliance with RPAPL 1304 … . Christiana Trust v Larmond, 2025 NY Slip Op 05664, Second Dept 10-15-25

Practice Point: Here the notice of foreclosure presented as evidence at trial did not comply with RPAPL 1304, requiring dismissal of the complaint.

 

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PLAINTIFF, WHO HAD PURCHASED 75% OF REAL PROPERTY FROM THE HEIRS OF THE ORIGINAL OWNER, SOUGHT PARTITION AND SALE; DEFENDANT, WHOSE MOTHER HAD PURCHASED THE PROPERTY, OWNED THE REMAINING 25%; UNDER THE UNIFORM PARTITION OF HEIRS PROPERTY ACT (UPHPA), PLAINTIFF WAS REQUIRED TO NEGOTIATE A SETTLEMENT IN GOOD FAITH, BUT DID NOT (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Wan, determined that plaintiff, who had purchased 75% of a piece of real property from the heirs of the original owner, did not negotiate in good faith in seeking a judgment directing the partition and sale of the property. The Uniform Partition of Heirs Property Act (UPHPA) (RPAPL 993) applies to this situation, where defendant, an heir of the original owner, holds the remaining 25% of the property. The UPHPA required that plaintiff negotiate a sale price for its share of the property and/or a purchase price for defendant’s share of the property in good faith. Both Supreme Court and the Second Department determined plaintiff did not negotiate in good faith and therefore was not entitled to the partition and sale:

Pursuant to RPAPL 993, property that qualifies as “heirs property” within the meaning of RPAPL 993(2)(e) is subject to the mandates of the UPHPA, which supersedes the general partition statutes, including RPAPL 901 … .

Following the commencement of a partition action involving “heirs property,” RPAPL 993(5)(a) mandates that the matter shall proceed to a settlement conference, “for the purpose of holding settlement discussions, pertaining to the relative rights and obligations of the parties with respect to the subject property” … . …

RPAPL 993(5)(e) further requires that “[b]oth the plaintiff[ ] and defendant[ ] shall negotiate in good faith [during the UPHPA mandated settlement conferences] to reach a mutually agreeable resolution.” * * *

​… [A]s the defendant contends, the equitable factors set forth in RPAPL 993(9)(a) strongly favored her position that she was primarily interested in reaching an agreement that would allow her to maintain her ownership interest in the property. … [T]he defendant’s mother had purchased the property in 1970, approximately 50 years before the plaintiff acquired its interest in the property and commenced this action. … [T]he defendant had grown up in the property, her children had grown up there, and her son still lived there … . Additionally, the plaintiff, who is not a relative of either person from whom it purchased its 75% interest in the property …, allegedly purchased that interest for $136,000. Despite purchasing its interest in the property for approximately one quarter of the appraised value of that interest of $521,250, the plaintiff made a final offer to sell its interest in the property for $500,000, which would afford the plaintiff a significant profit … . Laurelton Estates, LLC v Prince, 2025 NY Slip Op 05226, Second Dept 10-1-25

Practice Point: Consult this opinion for insight into what the “good-faith-settlement-negotiation” requirements in the Uniform Partition of Heirs Property Act (UPHPA) are. The requirements were not met here. ​

 

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STATEMENTS IN BOLD LETTERS ON THE BOTTOM OF EACH PAGE OF THE RPAPL 1304 NOTICE OF FORECLOSURE, AS WELL AS A CONSUMER NOTICE PURSUANT TO 15 USC SECTION 1692G, DID NOT VIOLATE THE “SEPARATE ENVELOPE” RULE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined statements included with the RPAPL 1304 90-day notice-of-foreclosure did not violate the “separate envelope” rule:

“The ‘separate envelope’ mandate of RPAPL 1304(2) provides that ‘[t]he notices required by this section shall be sent by the lender, assignee or mortgage loan servicer in a separate envelope from any other mailing or notice'” … . Here, in support of her cross-motion, the defendant presented evidence that the 90-day notices included an additional statement, in bold letters, at the bottom of each page, indicating that the notice was “AN ATTEMPT TO COLLECT A DEBT” and that “ANY INFORMATION OBTAINED . . . WILL BE USED FOR THAT PURPOSE,” as well as a consumer notice pursuant to 15 USC § 1692g. However, the subject language does not constitute an “other mailing or notice” in violation of the separate envelope mandate of RPAPL 1304(2). The additional material consisted of “accurate statements that further the underlying statutory purpose of providing information to borrowers that is or may become relevant to avoiding foreclosure” … . HSBC Bank USA, N.A. v Berry, 2025 NY Slip Op 04769, Second Dept 8-27-25

Practice Point: The separate envelope rule which requires that the RPAPL 1304 notice of foreclosure be sent “in a separate envelope from any other mailing or notice” was not violated here by statements in bold letters on the bottom of each page of the RPAPL 1304 notice or by the inclusion of a consumer notice pursuant to 15 USC section 1692g.

 

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ALTHOUGH THE RPAPL 1304 NOTICE OF FORECLOSURE COMPLIED WITH THE STATUTE WHEN IT WAS SENT, IT DID NOT COMPLY WITH THE VERSION OF THE STATUTE IN EFFECT WHEN THE ACTION WAS COMMENCED; PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN DENIED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that, although the RPAPL 1304 notice of foreclosure was sufficient at the time it was served, it did not meet the RPAPL 1304 notice requirements at the time the action was brought:

RPAPL 1304(1) provides that “at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower, . . . including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower.” “‘Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action'” … . “Where an RPAPL 1304 notice fails to reflect information mandated by the statute, . . . the statute will not have been strictly complied with and the notice will not be valid” … .

Here, although the language in a 90-day notice sent … in November 2016 complied with the language set forth in RPAPL 1304 as it existed at the time the notice was mailed … , the plaintiff failed to establish, prima facie, that the notice complied with the language set forth in RPAPL 1304 as it existed at the time this action was commenced in December 2018 … . Since there was more than a two-year period between the time that the notice was sent and the time that the action was commenced, “[n]othing prevented the plaintiff from sending the defendant a new RPAPL 1304 notice, using the updated language, 90 days prior to commencing this action” … . Accordingly, as the plaintiff failed to establish, prima facie, strict compliance with RPAPL 1304, the Supreme Court should have denied those branches of the plaintiff’s motion which were for summary judgment on the complaint … . Wilmington Sav. Fund Socy., FSB v Scarso, 2025 NY Slip Op 04745, Second Dept 8-20-25

Practice Point: RPAPL 1304 must be strictly complied with. Here the RPAP 1304 notice of foreclosure complied with the statute when it was sent, but not when the action was commenced. The bank’s summary judgment motion should have been denied.

 

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