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Two Cases, Same Result: Second Department Sustains Borrowers’ Defenses of Failure to Comply With the Notice Requirements of RPAPL 1304 Due to Lenders’ Evidentiary Failures

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  • Posted on: Nov 12 2021

By Jonathan H. Freiberger

This Blog frequently writes about decisions related to residential mortgage foreclosure actions.  [Here and the articles hyperlinked therein.]  One frequent topic that is always ripe for treatment is the repeated failure of lenders to demonstrate compliance with the requirements of RPAPL 1304 due to shortcomings in the evidence presented on their prima facie case.  Suffice it to say, on November 10, 2021, the Appellate Division, Second Department, decided two cases on this very issue.

As summarized in prior Blog articles, RPAPL 1304 requires that at least ninety days prior to 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).

“Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action.”  Citibank, N.A. v. Conti-Scheurer, 172 A.D.3d 17, 20 (2nd Dep’t 2019) (citations omitted).  Moreover, lender has the burden of establishing compliance with RPAPL 1304.  BAC Home Loans Servicing, L.P. v. Chertov, 165 A.D.3d 1214, 1215 (2nd Dep’t 2018) (citations omitted).

2021-3 SFR Venture, LLC v. Schiavoni

In 2006, lender loaned borrower $750,000 and the repayment obligation was secured by a mortgage. A mortgage foreclosure action was commenced in 2014. Among borrower’s defenses was lender’s failure “to comply with the notice requirements of RPAPL 1304”. Supreme court granted lender’s motion for summary judgment, to strike borrower’s answer and for an order of reference.  Thereafter, supreme court granted lender’s motion to confirm the referee’s report and for a judgment of foreclosure and sale.  On borrower’s appeal, the Second Department reversed because “plaintiff failed to establish, prima facie, that it strictly complied with the requirements of RPAPL 1304.”  (Citation omitted.)  The Court reiterated that while generally, a foreclosing lender establishes its prima facie entitlement to judgment “through the production of the mortgage, the unpaid note, and evidence of default, “where a defendant raises the issue of compliance with RPAPL 1304 as an affirmative defense, the [lender on its summary judgment motion] is also required to make a prima facie showing of strict compliance with RPAPL 1304.” (Citation omitted.)

In addressing lender’s evidentiary failures, the Court stated:

In support of its motion, inter alia, for summary judgment on the complaint, [lender] submitted, among other things, the affidavit of Bethany White, Foreclosure Oversight Specialist for Roundpoint Mortgage Servicing Corporation …, [lender’s] loan servicer. However, White did not aver that she had personal knowledge of the purported mailings of the 90-day notice, or that she was familiar with the mailing practices and procedures of Roundpoint, which allegedly sent the notice.  Although [lender] submitted proof of mailing and tracking information for certified mailings of the 90-day notice, [lender] failed to submit proof of mailing of the notice by first-class mail. Moreover, White’s affidavit failed to specify that the RPAPL 1304 notice was served in an envelope that was separate from any other mailing or notice (see RPAPL 1304[2]. The record also otherwise did not demonstrate that the notice was sent in a separate envelope from any other mailing or notice.  (Some citations omitted.)

In addition, the Court found that lender failed to establish a payment default. Although the affidavit of the representative of the loan servicer demonstrated knowledge of servicer’s record-keeping practices and procedures, “her conclusory assertion that [borrower] defaulted on his obligations under the note was not substantiated by any business record establishing the alleged default.”  (Citation omitted.)

U.S. Bank N.A. v. Krakoff

The facts of Krakoff, as related to this article, are simple.  Borrower executed and delivered to lender a note in the amount of $600,000 secured by a mortgage.  Lender’s motion for summary judgment was granted and borrower’s cross-motion to dismiss the complaint as time-barred was denied.  Thereafter, borrower moved to confirm the referee’s report and for a judgment of foreclosure and sale, which motion was opposed by borrower, who alleged that lender failed to comply with RPAPL 1304.  Lender’s motion was granted and a sale of the property was directed.  As to borrower’s opposition, supreme court found “inter alia, that ‘[borrower] is now barred from raising allegations disputing [lender’s] compliance with RPAPL 1304.’”

On borrower’s appeal, the Second Department reversed and stated:

However, the Supreme Court erred in granting [lender’s] motion to confirm the referee’s report and for a judgment of foreclosure and sale, because [lender] failed to establish that it complied with RPAPL 1304. Contrary to [lender’s] contention, 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 thus, [borrower] properly raised it in opposition to [lender’s] motion to confirm the referee’s report and for a judgment of foreclosure and sale.

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 (see RPAPL 1304[2]).

Here, [lender] failed to establish that it complied with the requirements of RPAPL 1304. The affidavits of Armenia L. Harrell and La’Shana Farrow, both of whom are officers of Wells Fargo Bank, N.A. …, the servicing agent of [lender], were insufficient to establish that [lender] complied with RPAPL 1304. Both Harrell and Farrow attested that they were familiar with Wells Fargo’s records and record-keeping practices. Farrow averred, inter alia, that [lender] complied with RPAPL 1304 by mailing the required notices. The record indicates that the 90-day notices appear to have been mailed by ASC (America’s Servicing Company). However, neither Harrell or Farrow attest that they personally mailed the notices or that they were familiar with the mailing practices and procedures of ASC. Therefore, they failed establish proof of standard office practice and procedures designed to ensure that items are properly addressed and mailed. Moreover, [lender] failed to send individually addressed notices to each borrower; rather, the 90-day notices were jointly addressed to [borrower].  (Some 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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