Real Property Actions and Proceedings Law (RPAPL) Archives

RPAPL 1304 AND 1302-a DO NOT APPLY WHERE THE LOAN SUBJECT TO FORECLOSURE IS NOT A “HOME LOAN;” COMPLIANCE WITH RPAPL 1303 IS A CONDITION PRECEDENT TO FORECLOSURE BUT FAILURE TO COMPLY CANNOT BE RAISED FOR THE FIRST TIME ON APPEAL; FAILURE TO PROVIDE NOTICE OF DEFAULT CANNOT BE RAISED FOR THE FIRST TIME ON APPEAL (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s motion for summary judgment in this foreclosure action should have been granted. The Second Department noted: (1) RPAPL 1304 (re: notice) and 1302-a (re: standing) do not apply where the subject loan is not a “home loan” because the property was not defendant’s principal dwelling; (2) compliance with the notice requirements of RPAPL 1303 is a condition precedent to the commencement of a foreclosure action, but the issue cannot be raised for the first time on appeal; (3) the failure to provide notice of default as required by the mortgage cannot be raised for the first time on appeal. Nationstar Mtge., LLC v Gayle, 2021 NY Slip Op 08194, Second Dept 2-24-21

February 24, 2021/0 Comments/by Bruce Freeman

Evidence, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

COMPLIANCE WITH THE NOTICE REQUIREMENT OF RPAPL 1304 WAS NOT PROVEN IN THIS FORECLOSURE ACTION; PROOF REQUIREMENTS EXPLAINED IN SOME DETAIL (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff mortgage company did not demonstrate compliance with the notice requirements of RPAPL 1304:

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.” “The statute further provides the required content for the notice and provides that the notice must be sent by registered or certified mail and also by first-class mail to the last known address of the borrower” … . Strict compliance with RPAPL 1304 notice to the borrower is a condition precedent to the commencement of a foreclosure action … . “By requiring the lender or mortgage loan servicer to send the RPAPL 1304 notice by registered or certified mail and also by first-class mail, the Legislature implicitly provided the means for the plaintiff to demonstrate its compliance with the statute, i.e., by proof of the requisite mailing, which can be established with proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure” … .

Here, the only purported evidence submitted by the plaintiff in support of its motion to show that it complied with RPAPL 1304 was a hearsay statement in the affidavit of the plaintiff’s legal affairs representative. Moreover, contrary to the plaintiff’s assertions, the 90-day notice which was attached to her affirmation does not demonstrate that the mailing requirements of RPAPL 1304 were met … . The plaintiff failed to submit an affidavit of service or proof of first-class mailing by the United States Postal Service evidencing that the defendant was served by first-class mail in accordance with RPAPL 1304 … . The plaintiff not only failed to provide proof of the actual first-class mailing, but its legal affairs representative also lacked personal knowledge of the purported mailing and did not aver that she was familiar with the mailing practices and procedures of the entity that purportedly sent the notices … . Thus, the plaintiff submitted no evidence that the letter had been sent to the defendant by first-class mail more than 90 days prior to commencement of the action … . 21st Mtge. Corp. v Broderick, 2021 NY Slip Op 00825, Second Dept 2-10-21

February 10, 2021/0 Comments/by Bruce Freeman

Civil Procedure, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

FAILURE TO INCLUDE THE LACK OF STANDING DEFENSE IN THE ANSWER IS NO LONGER DEEMED A WAIVER OF THE DEFENSE; DEFENDANT IN THIS FORECLOSURE ACTION SHOULD HAVE BEEN ALLOWED TO AMEND HER ANSWER (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant should have been allowed to amend her answer to add the lack of standing defense. Pursuant to RPAPL 1302-a the failure to include the lack of standing defense in the answer is no longer deemed waiver of the defense:

… [T]he defendant did not waive the affirmative defense of lack of standing. RPAPL 1302-a … provides that, notwithstanding the provisions of CPLR 3211(e), “any objection or defense based on the plaintiff’s lack of standing in a foreclosure proceeding related to a home loan, as defined in paragraph (a) of subdivision six of section thirteen hundred four of this article, shall not be waived if a defendant fails to raise the objection or defense in a responsive pleading or pre-answer motion to dismiss.” Under the circumstances of this case, the Supreme Court should have granted that branch of the defendant’s cross motion which was pursuant to CPLR 3025(b) for leave to amend her answer to assert the affirmative defense of lack of standing … . Further, the defendant’s affidavit was sufficient to raise a triable issue of fact as to whether the plaintiff was the holder or assignee of the note at the time the action was commenced … . In response, the plaintiff failed to demonstrate its standing as a matter of law … . US Bank N.A. v Blake-Hovanec, 2021 NY Slip Op 00893, Second Department 2-10-21

February 10, 2021/0 Comments/by Bruce Freeman

Evidence, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

DETAILED EXPLANATION OF HOW MAILING OF THE RPAPL 1304 NOTICE CAN (SHOULD) BE PROVEN (SECOND DEPT).

The Second Department, in affirming the judgment of foreclosure in favor of Nationstar, offered a detailed explanation of how mailing of the RPAPl 1304 notice can be proven:

The Supreme Court … properly determined that … Nationstar proved sufficient mailing of the statutory 90-day preforeclosure notice as required by RPAPL 1304. 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.” The statute further provides the required content for the notice and provides that the notice must be sent by registered or certified mail and also by first-class mail to the last known address of the borrower (see RPAPL 1304[2]). Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action … . By requiring the lender or mortgage loan servicer to send the RPAPL 1304 notice by registered or certified mail and also by first-class mail, “‘the Legislature implicitly provided the means for the plaintiff to demonstrate its compliance with the statute, i.e., by proof of the requisite mailing,’ which can be ‘established with proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure'” … . The notice must also be in 14-point type … . Here, at the framed-issue hearing, Nationstar submitted evidence that a third-party vendor mailed the 90-day preforeclosure notice through the testimony of a witness who had personal knowledge of the vendor’s standard business practice with regard to sending the 90-day preforeclosure notice to borrowers, and who affirmed, based on the business records she reviewed regarding the subject loan, that the notices had been sent to the defendant in compliance with the requirements of RPAPL 1304 … . Notwithstanding the use of a third party to mail the 90-day preforeclosure notice, Nationstar tendered sufficient evidence demonstrating strict compliance with RPAPL 1304. Nationstar Mtge., LLC v Paganini, 2021 NY Slip Op 00852, Second Dept 2-10-21

February 10, 2021/0 Comments/by Bruce Freeman

Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

THERE WAS NO PROOF THE NOTICE REQUIRED BY RPAPL 1304 WAS MAILED TO THE PROPER ADDRESS (FIRST DEPT).

The First Department, reversing Supreme Court, determined the notice provisions of Real Property Actions and Proceedings Law (RPAPL) 1304 were not complied with and the bank’s motion for summary judgment in this foreclosure action should not have been granted. There was no proof the notice was mailed to the right place:

Plaintiff failed to demonstrate its strict compliance with RPAPL 1304, a condition precedent to the commencement of a foreclosure action … . Although the statute requires that the notice be sent to “the property address and any other address of record,” the affidavits submitted by plaintiff show that the notices were mailed neither to the mortgaged premises nor to defendant’s residence. One of the addresses to which the notices were sent not only was never occupied by defendant but also specified a unit that did not exist at that street address. The other was sent to the correct high-rise apartment building of more than 400 units but was missing the unit number. Thus, plaintiff did not send defendant proper notice under RPAPL 1304 … . U.S. Bank N.A. v Moran, 2021 NY Slip Op 00645, First Dept 2-4-21

February 4, 2021/0 Comments/by Bruce Freeman

Civil Procedure, Debtor-Creditor, Real Property Actions and Proceedings Law (RPAPL)

THE JUDGMENT LIEN WAS NOT DOCKETED UNDER THE SELLER’S SURNAME; THEREFORE THE BUYER’S ACTION FOR A JUDGMENT QUIETING TITLE WAS PROPERLY GRANTED (SECOND DEPT).

The Second Department determined plaintiff-buyer was entitled to judgment on his quiet title cause of action and to a declaration that the property is not subject to the defendant’s judgment lien. The judgment was not docketed under the seller’s surname:

… [T]he plaintiff demonstrated, prima facie, his entitlement to judgment as a matter of law on the cause of action to quiet title and for a declaration that the real property at issue is not subject to the defendant’s judgment lien. In support of his motion, the plaintiff submitted, among other things, the deposition transcript of a supervisor of the Docket Department of the Kings County Clerk’s Office (hereinafter the supervisor). The supervisor testified at her deposition that the judgment at issue was not docketed under “Paul”—the surname of the title owner of the property. Thus, no valid lien against the property was created (see CPLR 5018[c][1] …). Moreover, there is no dispute that the plaintiff had no actual or constructive notice of a judgment lien on the property … .

In opposition, the defendant failed to raise a triable issue of fact. Any alleged defects in the docketing procedure employed by the Kings County Clerk’s Office are not attributable to a bona fide purchaser of the property … . Charles v Berman, 2021 NY Slip Op 00542, Second Dept 2-3-21

February 3, 2021/by Bruce Freeman

Municipal Law, Real Property Actions and Proceedings Law (RPAPL), Real Property Law

HOMEOWNERS’ ASSOCIATIONS IN THE HAMPTONS DEMONSTRATED OWNERSHIP OF THE BEACH TO THE HIGH WATER MARK; THE TOWNS THEREFORE COULD NOT ISSUE PERMITS ALLOWING VEHICLES ON THE BEACH (SECOND DEPT).

The Second Department, reversing Supreme Court in this action to quiet title pursuant to RPAPL Article 15,, determined the homeowners’ associations demonstrated ownership of about 4000 feet of beach in the Hamptons on Long Island. Therefore the towns could not allow vehicles to park on the beach:

In an action pursuant to RPAPL article 15, the plaintiff bears the burden of demonstrating, inter alia, the boundaries of the subject property with “common certainty” (see RPAPL 1515[2] … ). Here, contrary to the Supreme Court’s determination, we find that Seaview, Dunes, Tides, and Whalers established their title claims by a preponderance of the evidence, and that Ocean established its title claim by a preponderance of the evidence with respect to the westernmost portion of its property. At trial, the plaintiffs produced a land title expert who testified to the homeowners associations’ chains of title to their respective properties. Specifically, that expert testified, based on documentary evidence, that Seaview, Dunes, Tides, and Whalers owned fee simple title to their respective properties, extending to the mean high-water mark of the Atlantic Ocean. The expert also testified, in relevant part, that Ocean owned fee simple title extending to the mean high-water mark of the Atlantic Ocean, as to the westernmost 400 linear feet of its property. The plaintiffs produced all of the deeds in those respective chains of title, beginning with the Benson Deed, which is common to all of the homeowners associations’ chains of title. Based on the foregoing evidence, the homeowners associations established, to the extent previously indicated, that they owned title in fee simple absolute to the disputed portion of their respective properties (see RPAPL 1515[2] … ). Seaview at Amagansett, Ltd. v Trustees of Freeholders & Commonalty of Town of E. Hampton, 2021 NY Slip Op 00584, Second Dept 2-3-21

February 3, 2021/by Bruce Freeman

Evidence, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

THE BANK DID NOT DEMONSTRATE STRICT COMPLIANCE WITH RPAPL 1304 IN THIS FORECLOSURE ACTION; SUMMARY JUDGMENT SHOULD HAVE BEEN AWARDED TO DEFENDANT (FIRST DEPT).

The First Department, reversing Supreme Court, determined the plaintiff bank’s motion for summary judgment should not have been granted and, upon a search of the record, summary judgment should have been granted to defendant in this foreclosure action. The proof of mailing of the notice required by RPAPL 1304 was not sufficient:

Plaintiff failed to establish prima facie its strict compliance with RPAPL 1304 … . The copy of the certified mail receipt it submitted is undated and blank in other parts, and shows the signature of someone other than defendant. The copy of the pre-paid first-class mail envelope has no recipient’s name or address on it. Further, the affidavits plaintiff submitted do not demonstrate the loan servicer’s employees’ familiarity with the mailing practices and procedures of the servicer that had mailed the 90-day notices and the notice of default. U.S. Bank, N.A. v Calhoun, 2021 NY Slip Op 00398, First Dept 1-26-21

January 26, 2021/by Bruce Freeman

Bankruptcy, Civil Procedure, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

THE DEBT WAS ACCELERATED WHEN THE BANKRUPTCY STAY WAS LIFTED; THE FORECLOSURE ACTION WAS THEREFORE TIME-BARRED; DISAGREEING WITH THE 2ND DEPARTMENT, THE DEFENDANTS DID NOT NEED TO INTERPOSE A COUNTERCLAIM TO CANCEL THE MORTGAGE PURSUANT TO RPAPL 1501 (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Clark, determined the debt was accelerated when the automatic bankruptcy stay was lifted. Therefore the foreclosure action was untimely and the mortgage was properly cancelled pursuant to RPAP 1501:

… [T]he mortgage was accelerated on December 8, 2011, the date on which the bankruptcy court issued the order lifting the automatic bankruptcy stay as to plaintiff’s predecessor in interest and its assignees and/or successors in interest … . By filing a proof of claim in the bankruptcy proceeding and shortly thereafter seeking affirmative relief from the automatic bankruptcy stay, plaintiff’s predecessor in interest communicated a clear and unequivocal intent to accelerate the entire mortgage debt … . …

Supreme Court did not err in discharging and canceling the mortgage. RPAPL 1501 (4) states, as relevant here, that, where the statute of limitations period for the commencement of a mortgage foreclosure action has expired, “any person having an estate or interest in the real property subject to such encumbrance may maintain an action . . . to secure the cancellation and discharge of record of such encumbrance, and to adjudge the estate or interest of the plaintiff in such real property to be free therefrom” … . Contrary to the Second Department, we do not read RPAPL 1501 (4) as stating that the cancellation and discharge of a mortgage can only be obtained by commencing an action or interposing a counterclaim for such relief … .

… [D]efendants did not interpose a counterclaim seeking to discharge and cancel the mortgage. However, defendants requested, in their answer, dismissal of the complaint and such “other and further relief as [Supreme Court] deem[ed] just and equitable” and thereafter specifically requested in their cross motion that the mortgage be discharged and canceled. MTGLQ Invs., L.P. v Wentworth, 2021 NY Slip Op 00064, Third Dept 1-7-21

January 7, 2021/by Bruce Freeman

Evidence, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

THE REFEREE’S REPORT IN THIS FORECLOSURE ACTION WAS BASED ON HEARSAY; THE SECOND MORTGAGE WAS NOT DEMONSTRATED TO MEET THE REQUIRMENTS OF RPAPL 1351 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the referee’s report was based upon hearsay and should not have been confirmed. In addition, the proof a second mortgage met the requirements of RPAPL 1351 and 1354 was insufficient:

“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” … . Here, the affidavit executed by an employee of the plaintiff’s loan servicer, which was submitted by the plaintiff for the purpose of establishing the amount due and owing under the mortgage loan, constituted inadmissible hearsay and lacked probative value because the affiant failed to produce any of the business records upon which she purportedly relied in making her calculations … . Consequently, the referee’s findings with respect to the total amount due upon the mortgage were not substantially supported by the record … .

… In an action to foreclose a mortgage commenced by a first mortgagee, a second mortgagee may move for a provision in the judgment of foreclosure and sale that any surplus moneys from the foreclosure sale be applied to satisfy the debt owed by the defendant to the second mortgagee (see RPAPL 1351[3]). Such a motion may be granted if “it appears to the satisfaction of the court” that there exists no more than one other mortgage on the subject premises which is “then due” and subordinate only to the plaintiff’s mortgage but is entitled to priority over all other liens and encumbrances other than those described RPAPL 1354(2), and if the motion of the second mortgagee is “made without valid objection of any other party” (RPAPL 1351[3]).

Here, [the] motion papers insufficient, prima facie, to meet the requisite standard (see RPAPL 1351[3]) … . U.S. Rof III Legal Tit. Trust 2015-1 v John, 2020 NY Slip Op 08099, Second Dept 12-30-20

December 30, 2020/by Bruce Freeman

COMPLIANCE WITH THE NOTICE REQUIREMENT OF RPAPL 1304 WAS NOT PROVEN IN THIS FORECLOSURE ACTION; PROOF REQUIREMENTS EXPLAINED IN SOME DETAIL (SECOND DEPT).

FAILURE TO INCLUDE THE LACK OF STANDING DEFENSE IN THE ANSWER IS NO LONGER DEEMED A WAIVER OF THE DEFENSE; DEFENDANT IN THIS FORECLOSURE ACTION SHOULD HAVE BEEN ALLOWED TO AMEND HER ANSWER (SECOND DEPT).

DETAILED EXPLANATION OF HOW MAILING OF THE RPAPL 1304 NOTICE CAN (SHOULD) BE PROVEN (SECOND DEPT).

THERE WAS NO PROOF THE NOTICE REQUIRED BY RPAPL 1304 WAS MAILED TO THE PROPER ADDRESS (FIRST DEPT).

THE JUDGMENT LIEN WAS NOT DOCKETED UNDER THE SELLER’S SURNAME; THEREFORE THE BUYER’S ACTION FOR A JUDGMENT QUIETING TITLE WAS PROPERLY GRANTED (SECOND DEPT).

HOMEOWNERS’ ASSOCIATIONS IN THE HAMPTONS DEMONSTRATED OWNERSHIP OF THE BEACH TO THE HIGH WATER MARK; THE TOWNS THEREFORE COULD NOT ISSUE PERMITS ALLOWING VEHICLES ON THE BEACH (SECOND DEPT).

THE BANK DID NOT DEMONSTRATE STRICT COMPLIANCE WITH RPAPL 1304 IN THIS FORECLOSURE ACTION; SUMMARY JUDGMENT SHOULD HAVE BEEN AWARDED TO DEFENDANT (FIRST DEPT).

THE DEBT WAS ACCELERATED WHEN THE BANKRUPTCY STAY WAS LIFTED; THE FORECLOSURE ACTION WAS THEREFORE TIME-BARRED; DISAGREEING WITH THE 2ND DEPARTMENT, THE DEFENDANTS DID NOT NEED TO INTERPOSE A COUNTERCLAIM TO CANCEL THE MORTGAGE PURSUANT TO RPAPL 1501 (THIRD DEPT).

THE REFEREE’S REPORT IN THIS FORECLOSURE ACTION WAS BASED ON HEARSAY; THE SECOND MORTGAGE WAS NOT DEMONSTRATED TO MEET THE REQUIRMENTS OF RPAPL 1351 (SECOND DEPT).

Categories

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