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PLAINTIFF IN THIS FORECLOSURE ACTION DID NOT PRESENT SUFFICIENT PROOF OF COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 OR THE MORTGAGE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff’s proof of compliance with the notice requirements of RPAPL 1304 and the mortgage in this foreclosure action was insufficient:

RPAPL 1304 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” (RPAPL 1304[1]). “Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action” … . RPAPL 1304 requires that the notice be sent by registered or certified mail, and also by first-class mail, to the last known address of the borrower … . The 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 occurred … .

… [T]he plaintiff failed to establish, prima facie, that the mailing of the RPAPL 1304 notice by first-class mail actually occurred. Graves [document management specialist] did not aver that she had personal knowledge of the mailing, did not describe a standard office procedure designed to ensure that items are properly addressed and mailed, and did not attach proof of first-class mailing of the RPAPL 1304 notice … . Moreover, the plaintiff failed to establish, prima facie, that the mailing of the notice of default in accordance with the terms of the mortgage agreement actually occurred … . Federal Natl. Mtge. Assn. v Donovan, 2021 NY Slip Op 04748, Second Dept 8-25-21

 

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THE BANK’S EVIDENCE OF DEFENDANT’S DEFAULT AND COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 AND THE MORTGAGE WAS INSUFFICIENT (SECOND DEPT).

The Second Department, reversing Supreme Court in this foreclosure action, determined plaintiff bank did not present sufficient evidence of defendant’s default or the bank’s compliance the the notice requirements of the mortgage and RPAPL 1304:

… [Plaintiff’s representative] did not attest that he was personally familiar with the record-keeping practices and procedures of the plaintiff or those of the plaintiff’s predecessor in interest, or that the records generated by the plaintiff’s predecessor in interest were incorporated into the plaintiff’s own records or routinely relied upon in its business (see CPLR 4518[a] … ), and failed to attach any business records of the plaintiff or its predecessor in interest to his affidavit ,,, . Moreover, to the extent that the …. employee’s purported knowledge of [defendant’s] default was based upon his review of unidentified business records … , his affidavit constituted inadmissible hearsay and lacked probative value … . …

The plaintiff failed to submit an affidavit of service or any proof of mailing by the post office demonstrating that it properly served [defendant]  pursuant to the terms of RPAPL 1304 … . The … employee’s affidavit was insufficient to establish that the notice was sent to [defendant] in the manner required by RPAPL 1304, as the employee did not provide evidence of the plaintiff’s standard office mailing procedure and provided no evidence of the actual mailing … . Bank of N.Y. Mellon v DeLoney, 2021 NY Slip Op 04655, Second Dept 8-11-21

 

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THE NOTICE REQUIREMENTS OF RPAPL 1304 WERE NOT COMPLIED WITH BY THE BANK; THEREFORE THE 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 criteria for the notice required by RPAPL 1304 in this foreclosure action were not met. The bank’s motion for summary judgment should not have been granted:

RPAPL 1304(1), which applies to residential foreclosure actions, provides, among other things, that, “at least [90] 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 version of RPAPL 1304 which existed at the time this action was commenced provided that notices required to be sent pursuant to this section “shall contain a list of at least five housing counseling agencies . . . that serve the region where the borrower resides,” with their “last known addresses and telephone numbers” (RPAPL former 1304[2]).

Here, the RPAPL notices submitted by the plaintiff in support of its motion for summary judgment failed to demonstrate that the notices contained five housing agencies that served the region where the defendant resided. As a result, the plaintiff did not meet its prima facie burden of establishing that it strictly complied with RPAPL 1304 … . US Bank N.A. v Gurung, 2021 NY Slip Op 04387, Second Dept 7-15-21

 

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PLAINTIFF IN THIS FORECLOSURE ACTION DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff in this foreclosure action did not demonstrate compliance with the notice provisions of RPAPL 1304:

Although the RPAPL 1304 notices were allegedly mailed from New York by the same law firm that filed the summary judgment motion on behalf of the plaintiff, no one from that law firm provided an affidavit of mailing, or any other evidentiary proof in admissible form to establish that the mailing was properly completed. Instead, the plaintiff relied on the affidavit of Jennifer Jeudy, a contract management coordinator based in Palm Beach County, Florida, who averred, without further explanation, that the RPAPL 1304 notices “were mailed by first-class and certified mail, having been placed in an official depository under the exclusive case [sic] and custody of the United States Post Office in postage-paid properly addressed envelopes.” Since the plaintiff failed to provide sufficient proof of the actual mailing, and Jeudy did not attest to knowledge of the mailing practices of the plaintiff’s New York law firm, the plaintiff failed to establish its strict compliance with RPAPL 1304 … . Ocwen Loan Servicing, LLC v Malik, 2021 NY Slip Op 03596, Second Dept 6-9-21

Similar issues and result in U.S. Bank N.A. v Ehrlich, 2021 NY Slip Op 03627, Second Dept 6-9-21

 

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THE FORECLOSURE ACTION WAS PROPERLY DISMSSED AS TIME-BARRED; RPAPL 1304 IS A CONDITION PRECEDENT, NOT A STATUTORY PROHIBITION WHICH WOULD TOLL THE STATUTE OF LIMITATIONS (SECOND DEPT).

The Second Department, over a two-justice partial dissent, determined the defendant’s motion to dismiss the foreclosure action as time-barred, cancel the notice of pendency and cancel and discharge the mortgage (RPAPL article 15) was properly granted. The decision is too complex and factually specific to fairly summarize here (but well worth reading). One of the issues addressed was the difference between a statutory prohibition, which would toll the statute of limitations, and a condition precedent, which would not:

CPLR 204(a) provides that “[w]here the commencement of an action has been stayed by a court or by a statutory prohibition, the duration of the stay is not part of the time within which the action must be commenced” … . RPAPL 1304, which the plaintiff argues is a “statutory prohibition,” requires 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.” RPAPL 1304 describes the required content and manner of service of the notice. “Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action” … .

“A statutory prohibition and a condition precedent are separate concepts” … . The salient feature of a “statutory prohibition” is the plaintiff’s lack of control. Since a plaintiff has complete control over the acts necessary to effectuate compliance with a condition precedent, a condition precedent is not a statutory prohibition … . Thus, because the plaintiff had control over when to serve the RPAPL 1304 notice, and could have done so at least 90 days prior to the expiration of the statute of limitations, RPAPL 1304 is not a statutory prohibition within the meaning of CPLR 204(a) … . Everhome Mtge. Co. v Aber, 2021 NY Slip Op 03574, Second Dept 6-9-21

 

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THE BANK IN THIS FORECLOSURE ACTION DID NOT PROVIDE SUFFICIENT PROOF OF COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 AND THE MORTGAGE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank in this foreclosure action did not submit sufficient proof of compliance with the notice requirements of RPAPL 1304 and the mortgage:

Although the plaintiff submitted copies of the 90-day notices purportedly sent to [defendant] Jimenez, the plaintiff failed to demonstrate, prima facie, that the notices were actually mailed, either through an affidavit of service, other proof of mailing by the post office, or evidence 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 unsubstantiated and conclusory assertion in an affidavit of a representative of the plaintiff’s loan servicer that the 90-day notice was sent in accordance with RPAPL 1304 is insufficient to establish that the notice was actually mailed to Jimenez by first-class and certified mail … . Moreover, the affiant based her assertions upon her review of unspecified business records without attaching any such business records to her affidavit … . “It is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted” … .

Similarly, the plaintiff failed to demonstrate, prima facie, that it complied with the notice of default provisions of the consolidated mortgage, which required the plaintiff to send a notice of default to Jimenez at the notice address by first-class mail and to provide a 30-day cure period. Copies of the notice without proof of mailing, along with the affidavit of a representative of the loan servicer averring, based upon her review of unspecified business records which were not attached to the affidavit, that such a notice of default was sent on an unspecified date, was insufficient to satisfy the plaintiff’s prima facie burden … .  Wilmington Trust, N.A. v Jimenez, 2021 NY Slip Op 03212, Second Dept 5-19-21

 

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THE BANK’S PROOF OF COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 WAS INSUFFICIENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the proof of the bank’s compliance with the notice requirements of RPAPL 1304 in this foreclosure action was insufficient:

… [T]he plaintiff relied on an affidavit of James Green, a vice president of loan documentation for Wells Fargo, who averred that, based on his review of Wells Fargo’s business records, the required notice was sent by both certified mail and first-class mail. Green attached evidence of a certified article number, but did not attach any evidence of a first-class mailing. He did not aver that he had personal knowledge of the mailing, did not describe any standard office procedure designed to ensure that the notices are mailed, and did not attach domestic return receipts for the mailing … . Deutsche Bank Natl. Trust Co. v Ezeji, 2021 NY Slip Op 03164, Second Dept 5-19-2021

 

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PLAINTIFF BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 AND THE MORTGAGE IN THIS FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff bank did not demonstrate compliance with the notice requirements of RPAPL 1304 and the mortgage. Therefore the bank’s motion for summary judgment in this foreclosure action should not have been granted:

… [T]he plaintiff failed to submit proof of the actual mailings, such as the affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure. Instead, the plaintiff relied on the affidavit of an employee of the plaintiff’s loan servicer, who did not attest that she had personal knowledge that the notices were mailed, or attest to a standard office mailing procedure designed to ensure that items are properly addressed and mailed … .

Likewise, relying on the same affidavit, the plaintiff failed to establish compliance with the requirements for a notice of default pursuant to sections 15 and 22 of the mortgage agreement. Statements in the employee’s affidavit, “which asserted that the notice of default was sent in accordance with the terms of the mortgage, [were] unsubstantiated and conclusory and . . . , even when considered together with the copy of the notice of default, failed to show that the required notice was in fact mailed by first class mail or actually delivered to the designated address if sent by other means, as required by the subject mortgage” … . U.S. Bank N.A. v Peykar, 2021 NY Slip Op 03077, Second Dept 5-12-21

 

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THE ESTATE WAS A NECESSARY PARTY IN THIS FORECLOSURE ACTION; SUPREME COURT SHOULD HAVE ORDERED THE JOINDER OF THE ESTATE INSTEAD OF DISMISSING THE COMPLAINT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined Supreme Court properly held that the estate was a necessary party in this foreclosure action, but failing the include the estate did no warrant dismissal of the complaint. Rather, the court should directed that the estate be joined as a party:

Supreme Court did not err in finding that the estate was a necessary defendant. “Pursuant to RPAPL 1311(1), ‘necessary defendants’ in a mortgage foreclosure action include, among others, ‘[e]very person having an estate or interest in possession, or otherwise, in the property as tenant in fee, for life, by the courtesy, or for years, and every person entitled to the reversion, remainder, or inheritance of the real property, or of any interest therein or undivided share thereof, after the determination of a particular estate therein'” … . Particularly where, as here, the plaintiff seeks a deficiency judgment, and alleges a default in payment subsequent to the death of the deceased mortgagor, the estate of the mortgagor is a necessary party to the foreclosure action … . However, dismissal of the complaint was not the proper remedy; rather, the proper remedy was to direct the joinder of the estate as a defendant (see CPLR 1001[b] …). BAC Home Loans Servicing, L.P. v Williams, 2021 NY Slip Op 02780, Second Dept 5-5-21

 

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PLAINTIFF DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION AND DID NOT PROVIDE SUFFICIENT PROOF OF COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff did not demonstrate standing to bring the foreclosure action, the defendants properly raised plaintiff’s failure to comply with the notice requirements of RPAPL 1304 in opposition to the plaintiff’s summary judgment motion, and the plaintiff’s proof of compliance with the notice requirements was insufficient:

… [T]he plaintiff failed … to establish its standing to commence this action. The copy of the note submitted in support of the plaintiff’s motion contained two additional pages, the first entitled “Allonge to Note” and the second entitled “Note Allonge.” However, as the defendants correctly contend, the plaintiff did not submit any evidence to indicate that the purported allonges were so firmly affixed to the note so as to become a part thereof (see UCC 3-202[2] …). …

… [S]ince the proper service of a RPAPL 1304 notice is a condition precedent to the commencement of a foreclosure action, the defendants could properly raise this defense for the first time in their opposition to the plaintiff’s motion for summary judgment, and the burden of establishing prima facie compliance with the requirements of RPAPL 1304 was with the plaintiff … . …

… [I]n order to establish its compliance with the notice requirements of RPAPL 1304, the plaintiff submitted two affidavits from its “authorized signer,” Tracy A. Duck. However, contrary to the Supreme Court’s determination, neither affidavit was sufficient to establish the plaintiff’s strict compliance with the notice requirements of RPAPL 1304. Among other things, Duck did not aver that she was familiar with the mailing practices and procedures of the entity that purportedly sent the notices … . Moreover, the business records attached to Duck’s second affidavit were insufficient to establish compliance with RPAPL 1304 … . LNV Corp. v Almberg, 2021 NY Slip Op 02791, Second Dept 5-5-21

 

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