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More RPAPL 1304 Cases

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  • Posted on: Jan 3 2022

By Jonathan H. Freiberger

This Blog’s December 17, 2021, article entitled: “Second Department Holds that Envelopes Containing Pre-Foreclosure Notices to Borrowers Pursuant to RPAPL 1304 Cannot Contain Any Other Notices Or Information,” discussed Bank or America, N.A. v. Kessler, in which the Second Department held that RPAPL 1304’s mailing requirements for the statutory notices contemplated thereby are to be strictly construed.  [Eds. Note: Kessler, and the Blog articles hyperlinked therein, discuss numerous issues relating to RPAPL 1304.]  RPAPL 1304 provides that at least ninety days prior to, and a condition precedent to, the commencement of a residential foreclosure action, lender must send borrower, inter alia, a notice that the loan is in default and other specific information regarding housing counseling.  Further, 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.”  (Emphasis added.)  In Kessler, the Court dismissed a foreclosure action because, inter alia, lender inserted in the envelope containing the RPAPL 1304 notice, an additional notice not authorized by the RPAPL.

On December 29, 2021, the Second Department, decided two cases, consistent with Kessler, in which the Court addressed issues related to strict compliance with the requirements of RPAPL 1304. 

Citimortgage, Inc. v. Dente

After borrowers’ default, lender commenced an action against borrowers to foreclose the mortgage securing the underlying loan.  Lender’s complaint alleged compliance with RPAPL 1304; an allegation that borrowers denied in their answer.  Supreme court granted summary judgment to lender.  Lender moved for a judgment of foreclosure and sale and borrowers cross-moved for summary judgment dismissing the complaint for failure to comply with RPAPL 1304.  The basis for borrower’s motion was that the lender’s RPAPL 1304 notices contained the following “extraneous information on the second page of the notice”:

The purpose of this communication is to collect a debt and any information obtained will be used for that purpose. TO THE EXTENT YOUR OBLIGATION HAS BEEN DISCHARGED OR IS SUBJECT TO AN AUTOMATIC STAY OF A BANKRUPTCY ORDER UNDER TITLE 11 OF THE UNITED STATES CODE, THIS NOTICE IS FOR COMPLIANCE AND INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE A DEMAND FOR PAYMENT OR AN ATTEMPT TO COLLECT ANY SUCH OBLIGATION.  (Emphasis in original.)

Supreme court granted lender’s motion, denied borrower’s motion and directed the sale of the property.  Borrowers appealed.  Borrowers also appealed from supreme court’s denial of Borrowers’ subsequent motion to vacate the judgment of foreclosure and sale.

While the borrowers failed to oppose lender’s motion for summary judgment, the Second Department noted that “failure to comply with RPAPL 1304 is a defense that may be raised at any time prior to the entry of judgment of foreclosure and sale.”  And, because the issue of compliance with RPAPL 1304 was raised before the entry of the judgment of foreclosure and sale, it was properly before supreme court.

Finally, the Court held that supreme court should have dismissed lender’s complaint because the “defendants established that the plaintiff failed to strictly comply with RPAPL 1304 on the ground that additional material was sent in the same envelope as the 90-day notice required by RPAPL 1304.”  (Citation omitted.)

Wells Fargo Bank, N.A. v. DeFeo

Lender in Wells Fargo commenced an action to foreclose a mortgage.  After answering, borrower moved for summary judgment and lender cross-moved for summary judgment.  Supreme court denied the motion, granted the cross-motion and appointed a referee to compute.  Borrower appealed.

On appeal, the Second Department held that neither the lender nor the borrower was entitled to summary judgment.  The Court reiterated that strict compliance with the notice provisions of RPAPL 1304 “is a condition precedent to the commencement of a foreclosure action” and that a “defense based on noncompliance with [the statute] may be raised at any time during the action.”  (Citations and internal quotation marks omitted.)  Nonetheless, as to the requirements of RPAPL 1304, the Court found that borrower failed to meet his burden of demonstrating noncompliance by lender and lender failed to meet its burden of demonstrating compliance.

As to the lender’s cross-motion, the Court stated:

Nevertheless, the Supreme Court should have denied those branches of the [lender]’s cross motion which were for summary judgment on the complaint…. 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, the [lender] failed to establish its prima facie entitlement to judgment as a matter of law, as it failed to show its strict compliance with RPAPL 1304(2). Among other things, the copies of the 90-day notice submitted by the [lender] in support of its cross motion included an additional notice not contemplated by RPAPL 1304(2). The [lender] acknowledged that the envelope that it sent to the [borrower], which contained the requisite RPAPL 1304 notices, also included a separate notice concerning the Home Affordable Modification Program and bankruptcy issues. This Court recently determined, in Bank of America, N.A. v Kessler …, that RPAPL 1304(2) requires that the requisite notices under its provision must be mailed in an envelope separate from any other notice. Since the [lender] failed to demonstrate that the RPAPL 1304 notice was served in an envelope that was separate from any other mailing or notice, it failed to establish its strict compliance with RPAPL 1304. Accordingly, the court should have denied the relevant branches of the plaintiff’s cross motion regardless of the sufficiency of the opposing.  (Some citations and internal quotation marks omitted.)

The Wells Fargo Court relied on Kessler in its decision and decided Citimortgage on the same day.  It is curious, therefore, that the Wells Fargo action was not dismissed by the Second Department.  This is particularly so considering lender’s apparent admission that it included notices not authorized by RPAPL 1304 in the same envelope in which the RPAPL 1304 notices were mailed.


Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes and is not intended to be and should not be taken as legal advice.

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