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Proof of Default in Residential Mortgage Foreclosures

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  • Posted on: Sep 23 2022

By Jonathan H. Freiberger

In general, to “establish prima facie entitlement to judgment as a matter of law in an action to foreclose a mortgage, a plaintiff must produce the mortgage, the unpaid note, and evidence of default.”  M&T Bank v. Barter, 186 A.D.3d 698, 799 (2nd Dep’t 2020) (citations omitted).  As readers of this Blog know, depending on the defenses raised in borrower’s answer, lender may be required to submit additional proof to meet its prima facie case.  See, e.g., here, here and here.  For example, when lack of standing or failure to comply with RPAPL 1304 are raised as defenses, lender must demonstrate standing and compliance with RPAPL 1304.  See, e.g., Wells Fargo Bank, N.A. v. Arias, 121 A.D.3d 973, 973-74 (2nd Dep’t 2014) (as to standing);  Bank of America, N.A. v. Wheatly, 158 A.D.3d 736 (2nd Dep’t 2018) (as to RPAPL 1304).  The focus of today’s article is on the default element of a foreclosure action.

To establish a payment default a lender may rely on “an admission made in response to a notice to admit (see CPLR 3212[b]; 3123), by an affidavit from ‘a person having personal knowledge of the facts’ (CPLR 3212[b]), or by other evidence ‘in admissible form.’”  Bank of New York Mellon v. Gordon, 171 A.D.3d 197 (2nd Dep’t 2019) (quoting Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 N.Y.3d 498, 507 (2015)) (brackets omitted, hyper-links added).  [Eds. Note: this Blog discussed Gordon [here].]

Proof of a payment default was one of the issues decided on September 21, 2022, by the Appellate Division, Second Department, in U.S. Bank National Association v. Zakarin.  Lender in Zakarin commenced a residential mortgage foreclosure action in 2010 and moved for summary judgment in 2018.  Borrower opposed the motion by arguing, inter alia, that lender’s submissions were insufficient to “establish, prima facie, the elements of a foreclosure action….”  Borrower appealed from supreme court’s grant on lender’s motion and the Second Department reversed.  

In support of the motion lender submitted an affidavit from lender’s loan servicer, in which the affiant failed to aver personal knowledge and, instead, “relied upon her review of certain records maintained by [the servicer].”  The Court reiterated that when relying on the business records exception to the hearsay rule when trying to make your prima facie case, “a proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker’s business practices and procedures.”  (Citations and internal quotation marks omitted.)  Further, “it is the business record itself, and not the foundational affidavit, that serves as proof of the matter asserted.”  (Citations and internal quotation marks omitted.)  Thus, the Court found:

The plaintiff failed to demonstrate, prima facie, the defendant’s default in payment under the note. In her affidavit, [the servicer’s affiant] stated that the defendant failed to make certain payments due under the terms of the note and mortgage, but she failed to identify the records that she relied upon and did not attach those records to her affidavit (see U.S. Bank N.A. v Ramanababu, 202 AD3d [1139,] 1141; Deutsche Bank Trust Co. Ams. v Miller, 198 AD3d 867, 868; Wells Fargo Bank, N.A. v Sesey, 183 AD3d 780, 782). Thus, her assertions as to the defendant’s default were inadmissible hearsay (see Deutsche Bank Trust Co. Ams. v Miller, 198 AD3d [867] at 868; Bank of N.Y. Mellon v DeLoney, 197 AD3d 548, 550). Contrary to the plaintiff’s suggestion, a review of records maintained in the normal course of business does not vest an affiant with personal knowledge (see U.S. Bank N.A. v Ramanababu, 202 AD3d at 1142; JPMorgan Chase Bank, N.A. v Grennan, 175 AD3d 1513, 1517). Since [the servicer’s affiant]’s affidavit was the only evidence of default proffered in support of its motion, the plaintiff failed to establish it prima facie entitlement to judgment as a matter of law. 

(Some hyper-links added.)  

For the same reasons, the Zakarin Court also rejected lender’s proof of compliance with RPAPL 1304, and stated:

The plaintiff failed to establish its strict compliance with RPAPL 1304. The plaintiff relied upon [the servicer’s affiant]’s affidavit, in which she averred that the RPAPL 1304 notice was sent to the defendant by certified and first-class mail. Although [the servicer’s affiant] averred that she had personal knowledge of [servicer]’s record-keeping practices and procedures, the business records she relied upon and attached to the affidavit were created by other entities. [The servicer’s affiant] did not aver that she had personal knowledge of those entities’ business practices and procedures, or otherwise provide a proper foundation for the admission of those records. Moreover, even if the relied upon records were admissible, they failed to establish compliance with the mailing requirements of RPAPL 1304. [Citations omitted.]


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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