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Second Department Dismisses More Complaints Due to Lenders’ Failure to Comply with RPAPL 1304 Notice Requirements in Residential Mortgage Foreclosure Actions

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  • Posted on: May 6 2022

By Jonathan H. Freiberger

The readers of this Blog know that we frequently discuss numerous aspects of residential mortgage litigation.  See, e.g., [here] and the articles linked therein.  A related subtopic that gets much attention in this Blog is the pre-foreclosure notice requirements of RPAPL 1304.  See, e.g., [here], [here], [here], [here], [here], [here], [here], [here], [here] and [here].

Briefly, and as noted in prior Blog articles, RPAPL 1304 requires that at least ninety days before commencing legal action against a borrower with respect to a “home loan” (as defined in the relevant statutes), a lender must: send written notice to the borrower by certified and regular mail that the loan is in default; provide a list of approved housing agencies that offer free or low-cost counseling; and, advise that legal action may be commenced after ninety days if no action is taken to resolve the matter.  One purpose of RPAPL 1304 is to enable defaulted borrowers to “benefit from the information provided in the notice and the 90–day period during which the parties could attempt to work out the default without imminent threat of a foreclosure action, in an effort to further the ultimate goal of reducing the number of foreclosures”.  CIT Bank N.A. v. Schiffman, 36 N.Y.3d 550, 555 (2021) (citation and internal quotation marks omitted).

The failure of a lender to comply with RPAPL 1304 will result in the dismissal of a foreclosure complaint (see, e.g., U.S. Bank N.A. v. Beymer, 161 A.D.3d 543 (1st Dep’t 2018)) when the issue is raised as an affirmative defense by the borrower (see, e.g., One West Bank, FSB v. Rosenberg, 189 A.D.3d 1600, 1602-3 (2nd Dep’t 2020) (citation omitted)).  Indeed, “proper service of the notice containing the statutorily mandated content is a condition precedent to the commencement of a foreclosure action.”  U.S. Bank N.A. v. Taormina, 187 A.D.3d 1095, 1096 (2nd Dep’t 2020) (citations omitted).  When failure to comply with RPAPL 1304 is raised as an affirmative defense, the foreclosing lender must demonstrate its compliance with the statute as part of its prima facie case.  Bank of America, N.A. v. Wheatly, 158 A.D.3d 736 (2nd Dep’t 2018) (citations omitted).  

In our October 1, 2021, blog article we discussed Wells Fargo Bank, N.A. v. Yapkowitz, 199 A.D.3d 126 (2nd Dep’t 2021), a case in which the Court dismissed lender’s complaint and held that a joint notice in one envelope addressed to two borrowers residing at the same address did not satisfy the requirements of RPAPL 1304.  In our December 17, 2021, blog article we discussed Bank of America, N.A. v. Kessler, 202 A.D.3d 10 (2nd Dep’t 2021), in which the Court dismissed lender’s complaint for failure to comply with CPLR 1304 because it included material in addition to the RPAPL 1304 notice in the envelope in which the RPAPL 1304 notice was mailed.

On May 4, 2022, the Second Department decided several cases in which lenders’ complaints were dismissed due to failure to comply with RPAPL 1304; two of which address the issues decided by Yapkowitz and/or Kessler.

HSBC Bank USA, N.A. v. DiBenedetti

In 2007, Cheryl DiBenedetti (“Cheryl”) delivered a $900,000.00 note to lender, the repayment obligation for which was secured by a mortgage on real property.  The mortgage was executed by Cheryl and Denis DiBenedetti (“Denis” and together with Cheryl, “Borrowers”).  As the Court highlighted “Denis … was identified as a “borrower” on both the first page of the mortgage, and below his signature.”  Lender commenced a foreclosure action in which Borrowers asserted a defense based on lender’s failure to comply with RPAPL 1304.  

Lender’s initial motion for summary judgment on the complaint and to strike Borrowers’ answer was denied by supreme court, which found that “[lender] failed to establish that it complied with RPAPL 1304.”  Lender renewed its summary judgment motion and, this time, submitted a copy of the RPAPL 1304 notice, which the Court described as follows:

The notice, which was addressed to both Cheryl DiBenedetti and Denis DiBenedetti, stated, among other things, that “[t]his communication is an attempt to collect a debt and any information obtained will be used for that purpose. However, if you have received a discharge of this debt in bankruptcy or are currently in a bankruptcy case, this notice is not intended as an attempt to collect a debt and, this company has a security interest in the property and will only exercise its rights as against the property.”

Supreme court granted lender’s motion to renew and, upon renewal, vacated its prior order. Later, supreme court confirmed the referee’s report and issued a judgment of foreclosure and sale.  

The Appellate Division reversed and held that, upon renewal, supreme court should have adhered to its original decision and dismissed the complaint because lender “failed to establish, prima facie, that it strictly complied with RPAPL 1304, since additional material was sent in the same envelope as the 90-day notice required by RPAPL 1304, and a single notice was jointly addressed to both [borrowers].”  (Citations omitted.)  Significantly, the Court found that Denis was indeed a “borrower” under RPAPL 1304 and, therefore, entitled to notice thereunder.  Thus, Lender’s argument to the contrary notwithstanding, the Court held that “although Denis DiBenedetti did not sign the note, he is considered a “borrower” within the meaning of RPAPL 1304 because he was identified as such, both on the first page of the mortgage and beneath his signature”.

US Bank National Association v. Drakakis

Borrower in Drakakis appealed from orders in which the supreme court granted lender summary judgment on its complaint and struck borrower’s answer, denied borrower’s cross-motion for summary judgment dismissing the complaint for failure to comply with RPAPL 1304 and appointed a referee to compute.  On appeal, the Second Department reversed and denied lender’s motion and granted borrower’s cross-motion dismissing the complaint.  In so doing, the Court stated:

Here, in support of its motion for summary judgment, the plaintiff failed to establish, prima facie, its compliance with the “separate envelope” mandate of RPAPL 1304(2) since the RPAPL 1304 notice submitted with its motion included, in addition to the statutorily prescribed language, a document titled “Consumer Notice Pursuant to 15 U.S.C. Section 1692(G)”. In support of his cross motion, the defendant Christos Drakakis demonstrated, prima facie, that the plaintiff failed to comply with the “separate envelope” mandate of RPAPL 1304(2). In opposition to the cross motion, the plaintiff failed to raise a triable issue of fact.  (Citations omitted.)


Compliance with the requirements of RPAPL 1304 is critical for lenders.  Similarly, it is equally critical that borrowers preserve such defenses in their answer.  Both DiBenedetti and Drakakis have 2014 index numbers and were dismissed by the Second Department in 2022 due to the failure of both lenders to comply with RPAPL 1304.

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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