Revenge of the Nerds - Empire Justice Center

Revenge of the Nerds Making the Most of Technical Defenses in Foreclosure Cases

February 22, 2017

Slides ................................................................................................................................................1

Relevant Statutes ............................................................................................................................30

RPAPL § 1303 ...................................................................................................................30

RPAPL § 1304 ...................................................................................................................33

RPAPL § 1306 ...................................................................................................................38

CPLR R. 4518 ....................................................................................................................40

Case Example: Bank of America v. Thompson .............................................................................43

Case Example: US Bank v. Crick ..................................................................................................86

Various Pro Se Papers ..................................................................................................................115

Reven

ge of th

e Nerd

sM

aking th

e Mo

st of Tech

nical D

efenses in

Foreclo

sure C

ases

Cath

erin

e Iso

be

Bro

oklyn

Legal Se

rvices

Jose

ph

Re

be

llaM

FY Le

gal Service

s, Inc.

Febru

ary 22

, 20

17

1

1

Ou

tline

I.In

trod

uctio

n

II.P

roced

ural Po

sture in

the Fo

reclosu

re Case

III.Th

e Defen

ses

IV.

Co

nclu

sion

and

Qu

estion

s

2

2

Proced

ural Po

sture: A

nsw

er

•First o

pp

ortu

nity to

assert defen

ses

•O

bvio

usly, every p

ossib

le defen

se is still on

the tab

le

•B

e sure to

assert waivab

led

efenses (stan

din

g!) that are likely to

arise

•R

ecent ch

anges to

CP

LR R

. 34

08

–rem

emb

er the exten

ded

timelin

e to

answ

er after the first settlem

ent co

nferen

ce

3

3

Proced

ural Po

sture:

Post-C

on

ference, Pre-M

otio

n, A

nsw

er In•

If there’s b

een an

answ

er, you

can m

ove to

amen

d to

assert any d

efenses th

at were n

ot raised

in

the A

nsw

er. You

do

no

t need

to su

pp

ly an excu

se for th

e failure to

raise it.

•“Leave sh

all be freely given

up

on

such

terms as m

ay be ju

st”. CP

LR R

. 30

25

(b). Leave to

amen

d is

app

rop

riate “pro

vided

the am

end

men

t is no

t palp

ably in

sufficien

t, do

es no

t preju

dice o

r surp

rise th

e op

po

sing p

arty, and

is no

t paten

tly devo

id o

f merit”. R

eyes v. Brin

ks Glo

b. Servs. U

SA, In

c., 11

2

A.D

.3d

80

5, 8

06

, 97

8 N

.Y.S.2d

63

, 64

(Ap

p. D

iv. 2d

De

p’t 2

01

3); Po

stiglio

ne

v. Ca

stro, 1

19

A.D

.3d

9

20

, 92

2, 9

90

N.Y.S.2

d 2

57

, 25

9 (A

pp

. Div. 2

d D

ep’t 2

01

4).

•P

rejud

ice to th

e op

po

sing p

arty relates on

ly to “p

rejud

ice or su

rprise resu

lting d

irectly from

the

delay in

seeking leave.” Tirp

ack

v. 12

5 N

. 10

, LLC, 1

30

A.D

.3d

91

7, 9

19

, 14

N.Y.S.3

d 1

10

, 11

3 (A

pp

. D

iv. 2d

De

p’t 2

01

5); see a

lso Lu

cido

v. Ma

ncu

so, 4

9 A

.D.3

d 2

20

, 22

9, 8

51

N.Y.S.2

d 2

38

, 24

5 (A

pp

. D

iv. 2d

De

p’t 2

00

8) (co

urt m

ust m

easure w

heth

er or n

ot “d

elay in seekin

g the am

end

men

t wo

uld

cau

se preju

dice o

r surp

rise”).

•A

pp

lies to d

efenses w

aived u

nd

er CP

LR 3

21

1(e). A

uro

ra Lo

an

Servs., LLC v. D

imu

ra, 1

04

A.D

.3d

7

96

, 79

7, 9

62

N.Y.S.2

d 3

04

, 30

6 (A

pp

. Div. 2

d D

ep’t 2

01

3) (h

old

ing th

at “defen

ses waived

un

der

CP

LR 3

21

1(e) can

neverth

eless be in

terpo

sed b

y leave of co

urt p

ursu

ant to

CP

LR 3

02

5(b

) so lo

ng

as the am

end

men

t do

es no

t cause th

e oth

er party p

rejud

ice or su

rprise resu

lting d

irectly from

th

e delay”).

4

4

Proced

ural Po

sture:

Post-C

on

ference, Pre-M

otio

n, N

o A

nsw

er•

Will n

eed to

file a mo

tion

to co

mp

el acceptan

ce of an

un

timely

answ

er. CP

LR §

30

12

(d).

•C

ou

rts have ro

utin

ely perm

itted service o

f a late answ

er wh

ere (1)

there is a reaso

nab

le excuse, (2

) the d

efend

ant h

as merito

riou

s d

efenses an

d (3

) service of th

e answ

er do

es n

ot u

nfairly p

rejud

ice the

plain

tiff. See, e.g., N

ickell v. Pa

thm

ark Sto

res, Inc., 4

4 A

.D.3

d 6

31

, 6

32

, 84

3 N

.Y.S.2d

17

7, 1

78

(Ap

p. D

iv. 2d

Dep

’t 20

07

); Jolko

vskyv.

Legem

an

, 32

A.D

.3d

41

8, 4

19

, 81

9 N

.Y.S.2d

56

1, 5

62

(Ap

p D

iv. 2d

D

ep’t 2

00

6); W

atso

n v. Po

llacch

i, 32

A.D

.3d

56

5, 5

65

-66

, 81

9 N

.Y.S.2d

6

12

, 61

3 (A

pp

. Div. 3

d D

ep’t 2

00

6); N

aso

nv. Fish

er, 30

9 A

.D.2

d 5

26

, 5

26

, 76

5 N

.Y.S.2d

32

, 33

(Ap

p. D

iv. 1st D

ep’t 2

00

3).

5

5

Proced

ural Po

sture:

Facing M

otio

n fo

r Sum

mary Ju

dgm

ent

•P

laintiff m

ust m

ake prim

a facie case and

refute asserted

defen

ses.

•If yo

u h

ave an u

np

led d

efense, yo

u m

ay be ab

le to raise it (R

og

off

v. Sa

n Ju

an

Ra

cing

Ass'n

, Inc., 5

4 N

.Y.2d

88

3, 8

85

, 42

9 N

.E.2d

41

8, 4

19

(1

98

1)) b

ut th

e cou

rt cou

ld also

find

that it h

as been

waived

. Do

n’t

try to b

ring u

p stan

din

g or statu

te of lim

itation

s for th

e first time.

•N

ot a d

efense, b

ut alw

ays loo

k for evid

entiary issu

es, especially

hearsay th

at do

esn’t m

eet the b

usin

ess record

s exceptio

n

requ

iremen

ts.

6

6

Bu

siness R

ecord

s Ru

le

Fou

nd

ation

requ

iremen

ts for ad

missio

n o

f a bu

siness reco

rd (o

r testim

on

y based

on

review o

f a bu

siness reco

rd:

1. Th

e record

mu

st be m

ade in

the o

rdin

ary cou

rse of b

usin

ess reflectin

g a rou

tine, regu

larly con

du

cted b

usin

ess activity need

ed an

d

relied o

n in

the p

erform

ance o

f the fu

nctio

n o

f the b

usin

ess;

2. It m

ust b

e the regu

lar cou

rse of th

e bu

siness to

make th

e record

;

3. Th

e record

mu

st have b

een m

ade at th

e time o

f the act,

transactio

n, o

ccurren

ce or even

t, or w

ithin

a reason

able tim

e th

ereafter, assurin

g the reco

llection

is fairly accurate an

d th

e entries

rou

tinely m

ade (See C

PLR

§4

51

8(a)).

7

7

Bu

siness R

ecord

s Ru

le

A p

rop

er fou

nd

ation

for th

e adm

ission

of th

e bu

siness reco

rd [o

r the

testimo

ny] m

ust b

e pro

vided

by so

meo

ne w

ith p

erson

al kno

wled

ge of

the m

aker’s bu

siness p

ractices and

pro

cedu

res. Seba

tino

v. Turf H

ou

se, 7

6 A

.D.2

d 9

45

, 94

6 (3

d D

ep’t 1

98

0). See also

, HSB

C M

ortg

ag

e Services, In

c. v. Ro

yal, 14

2 A

.D.3

d 9

52

(2d

Dep

’t 20

16

).

Wh

olesale ad

missio

n o

f files is un

acceptab

le; a fou

nd

ation

mu

st be

laid fo

r each reco

rd. V

ermo

nt C

om

missio

ner o

f Ba

nkin

g a

nd

Insu

ran

ce v. W

elbilt

Co

rp., 1

33

A.D

.2d

39

6 (2

d D

ep’t 1

98

7).

8

8

Bu

siness R

ecord

s Ru

le

•M

ost co

mm

on

plain

tiff misstep

is an in

app

rop

riate reliance o

n b

usin

ess reco

rds o

f oth

er entities. Th

is hap

pen

s in n

early every case in w

hich

servicin

g transfers after th

e case is b

rou

ght. Lo

ok at n

otices, stan

din

g, etc.

•Servicer actin

g as attorn

ey in fact fo

r plain

tiff cann

ot sw

ear to facts n

ot

with

in its o

wn

perso

nal kn

ow

ledge. Pero

siv. LiGreci, 9

8 A

.D.3

d 2

30

(2d

D

ep’t 2

01

2); C

ymb

olv. C

ymb

ol, 1

22

A.D

.2d

77

1 (2

d D

ep’t 1

98

6).

•Likew

ise, a servicer cann

ot sw

ear to even

ts pre-d

ating its servicin

g of th

e lo

an w

here kn

ow

ledge is b

ased o

n th

e bu

siness reco

rds o

f ano

ther en

tity. W

ells Farg

o B

an

k, N.A

. v. Jon

es, 13

9 A

.D.3

d 5

20

, 52

1-5

22

(1st

Dep

’t May

17

, 20

16

). C.f. Peo

ple v. C

ratsley, 8

6 N

.Y. 2d

81

, 90

(19

95

).

9

9

Examp

le of Im

perm

issible B

usin

ess Reco

rds

Lod

ato

v. Greyh

aw

k, 39

A.D

.3d

49

4, 4

95

, 83

4 N

.Y.S.2d

23

9, 2

40

(Ap

p. D

iv. 2d

Dep

't 20

07

) ("the m

ere filing o

f p

apers received

from

oth

er entities, even

if they are retain

ed in

the regu

lar cou

rse o

f bu

sine

ss, is insu

fficient

to q

ualify th

e do

cum

en

ts as bu

siness reco

rds b

ecau

se such

pap

ers simp

ly are no

t mad

e in th

e regu

lar cou

rse

of b

usin

ess o

f the

recipien

t").

“It is self-eviden

t, that w

ith th

e adven

t of

com

pu

ters and

electron

ic record

keep

ing, M

r. B

en

nett h

ad access to

all of th

e reco

rds related

to

the su

bje

ct loan

, inclu

din

g tho

se reco

rds

from

the p

rior servicers . . . th

at were

inco

rpo

rated w

ith, an

d in

to, th

e record

s of

Ru

shm

ore”.

10

10

Proced

ural Po

sture:

Facing M

otio

n fo

r Defau

lt Jud

gmen

t•

If there’s b

een d

elay pre-filin

g, you

can raise ab

and

on

men

t -C

PLR

3

21

5(c) –

and

seek dism

issal.

•A

ny ju

risdictio

nal ch

allenges, su

ch as im

pro

per service o

f pro

cess, can

be raised

in a cro

ss mo

tion

to d

ismiss.

•If th

e case h

asn’t b

een ab

and

on

ed an

d th

ere is no

jurisd

iction

al basis

to d

ismiss th

e action

, you

will p

rob

ably n

eed to

cross-m

ove to

com

pel

acceptan

ce of a late an

swer. G

enerally, th

is requ

ires a merito

riou

s d

efense an

d a reaso

nab

le excuse fo

r the d

elay –C

PLR

§3

01

2(d

).

11

11

Proced

ural Po

sture:

Facing M

otio

n fo

r Jud

gmen

t of Fo

reclosu

re & Sale

•A

t this p

oin

t, sum

mary ju

dgm

ent o

r defau

lt jud

gmen

t has b

een gran

ted.

Argu

men

t is goin

g to b

e limited

to issu

es with

the referee’s rep

ort itself.

•O

f cou

rse, jurisd

iction

al challen

ges (service of p

rocess, su

it bro

ugh

t against

a dead

perso

n) rem

ain.

•If th

e un

derlyin

g ord

er was d

ecided

on

defau

lt, you

may b

e able to

cross

mo

ve to vacate th

e un

derlyin

g ord

er if you

have a m

eritorio

us d

efense an

d

a reason

able excu

se for th

e defau

lt. CP

LR §

50

15

.

•A

dd

ition

ally, you

can raise an

y pro

cedu

ral pro

blem

s with

ob

tainin

g the

un

derlyin

g ord

er and

referral, such

as imp

rop

er service of th

e MSJ o

r b

ringin

g a mo

tion

for d

efault ju

dgm

ent ex p

arte w

hen

parties h

ave ap

peared

.

12

12

Defen

ses: Previou

s Cases

•Pen

din

g foreclo

sure su

it: RPA

PL §

13

01

(3) p

revents a m

ortgagee fro

m

brin

ging sim

ultan

eou

s suits w

itho

ut leave fro

m co

urt. Lo

ok o

ut fo

r it w

hen

the p

reviou

s suit h

as been

aban

do

ned

or th

e Plain

tiff has lo

st o

n M

SJ and

is overeager to

file a new

suit. U

nlike C

PLR

32

11

(a)(4), th

e o

perative fact is th

e mo

rtgage deb

t, no

t the p

arties.

•If th

ere have b

een m

ultip

le disco

ntin

uan

ces, see if CP

LR R

. 32

17

(c) ap

plies –

“a disco

ntin

uan

ce by m

eans o

f no

tice op

erates as an

adju

dicatio

n o

n th

e merits if th

e party h

as on

ce befo

re disco

ntin

ued

b

y any m

etho

d an

action

based

on

or in

clud

ing th

e same cau

se of

action

”

13

13

Defen

ses: RPA

PL §

13

03

•Fo

reclosin

g party b

ears the b

urd

en o

f sho

win

g strict com

plian

ce with

th

e statute. First N

at. B

an

k of C

hica

go

v. Silver,73

A.D

.3d

16

2, 1

70

, 8

99

N.Y.S.2

d 2

56

, 26

2 (A

pp

. Div. 2

d D

ep’t 2

01

0);P

ritcha

rd v. C

urtis,

10

1 A

.D.3

d 1

50

2, 1

50

4, 9

57

N.Y.S.2

d 4

40

, 44

3 (A

pp

. Div. 3

d D

ep’t

20

12

).

•See D

FS Ind

ustry Letter d

ated O

ctob

er 24

, 20

12

prescrib

ing

teleph

on

e con

tact for D

FS to b

e inclu

ded

in R

PAP

L §1

30

3 N

otice:

http

://ww

w.d

fs.ny.go

v/legal/ind

ustry/il1

21

02

4.h

tm

•In

recently b

rou

ght case

s, be su

re that th

e plain

tiff is usin

g the

up

dated

langu

age abo

ut th

e ho

meo

wn

er’s right to

remain

in th

e h

om

e wh

ile the fo

reclosu

re is pen

din

g.

14

14

http://www.dfs.ny.gov/legal/industry/il121024.htm

DFS In

du

stry Letter –C

on

tact Info

rmatio

n

15

15

Defen

ses: R

PAP

L §1

30

3

•C

heck fo

nts: title o

f the n

otice m

ust b

e in b

old

, 20

po

int typ

e; bo

dy o

f th

e no

tice mu

st be in

bo

ld, 1

4 p

oin

t type. P

rocess servers o

ften

redu

ce pap

ers by 1

0%

wh

en co

pyin

g or serve a co

py w

hich

is so fain

t th

at it cann

ot b

e con

sidered

in “b

old

” prin

t.

•Fo

nt size is d

efined

in G

eneral C

on

structio

n Law

§6

2.

•Is th

e no

tice prin

ted o

n co

lored

pap

er?

•D

id th

e defen

dan

t receive service of p

rocess b

ut w

aive his/h

er right

to co

ntest p

erson

al jurisd

iction

? If no

tice no

t received b

y defen

dan

t, can

still raise no

n-service o

f the R

PAP

L §13

03

No

tice as a defen

se.

16

16

Defen

ses: RPA

PL §

13

04

•N

otice th

at mu

st be sen

t at least 90

days b

efore th

e foreclo

sure is filed

•M

ust in

clud

e:

•List o

f Ho

usin

g Co

un

selors

•R

einstatem

ent A

mo

un

t

•R

einstatem

ent D

ate

•Statu

torily M

and

ated Lan

guage

•R

PAP

L §1

30

4 req

uires strict co

mp

liance. See, e.g

., Hu

dso

n C

ity Sav. B

an

k v. D

ePa

squ

ale, 1

13

A.D

.3d

59

5, 5

96

, 97

7 N

.Y.S.2d

89

5 (A

pp

. Div. 2

d D

ep’t

20

14

); Au

rora

Loa

n Servs., LLC

v. Weisb

lum

, 85

A.D

.3d

95

, 10

3, 9

23

N.Y.S.2

d

60

9, 6

14

(Ap

p. D

iv. 2d

Dep

’t 20

11). So

loo

k ou

t for an

ythin

g wro

ng w

ith th

e n

otice.

17

17

Prob

lems w

ith 1

30

4 N

otices

•List o

f Ho

usin

g Co

un

selo

rs is ou

tdated

or o

therw

ise inaccu

rate. See w

ayback

mach

ine

for earlie

r version

s of th

e cou

nse

lor list. Fo

r examp

le, A

CO

RN

, defu

nct

since 2

00

9, is still so

metim

es in

clud

ed

on

the

list. Co

mp

are the

curren

t list at: h

ttp://w

ww

.dfs.n

y.gov/co

nsu

me

r/mo

rtg_n

ys_np

_co

un

selin

g_agen

cies.htm

to th

e archived

version

s and

check fo

r errors su

ch as w

ron

g cou

nty.

•D

efault d

ate and

amo

un

t du

e d

o n

ot m

atch th

e d

escriptio

n o

f defau

lt in P

laintiff’s

affirmatio

n. Fo

r examp

le, th

e 1

30

4 n

otice w

as sent in

De

cem

be

r 20

14

, bu

t the

affid

avits state that d

efend

ant “failed

to co

mp

ly with

the term

s, coven

ants an

d

con

ditio

ns o

f said n

otes, m

ortgages an

d Fin

al Loan

Mo

dificatio

n b

y failing an

d

om

itting to

pay, to

the

plain

tiff, paym

ents d

ue

on

March

1, 2

01

5”.

•N

otice

no

t mailed

on

the

date stated

–ch

eck th

e certified m

ail tracking

info

rmatio

n if th

e n

otice w

as sent in

the

last two

years and

also ch

eck P

laintiff’s

wh

ich w

ill som

etime

s just state a d

ifferent d

ay.

18

18

http://www.dfs.ny.gov/consumer/mortg_nys_np_counseling_agencies.htm

Ho

usin

g Co

un

selors To

day

19

19

Ho

usin

g Co

un

selors List fo

r 20

13

20

20

Defen

ses: RPA

PL §

13

06

•A

fter send

ing th

e RPA

PL §

13

04

no

tice, the P

laintiff m

ust file w

ith th

e D

epartm

ent o

f Finan

cial Services with

in th

ree bu

siness d

ays.

•Th

e filing itself is a p

recon

ditio

n to

foreclo

sure.

•Th

is com

es up

in tw

o situ

ation

s:•

First, wh

ere the 1

30

4 N

otice

is defective d

ue to

an in

correct d

ate, you

sho

uld

also

argue th

at the 1

30

6 Filin

g is defective as w

ell becau

se it con

tains false

info

rmatio

n an

d/o

r wasn

’t mad

e with

in th

e pro

per tim

e perio

d.

•Seco

nd

, som

etimes th

e servicer will fin

d a d

efect in th

e 13

04

No

tice an

d sen

d

ano

ther o

ne to

correct th

e defect. I’ve n

ever seen th

e servicer file a secon

d

time w

ith D

FS.

21

21

Defen

ses: Co

ntractu

al No

tice of D

efault

•Th

e GSE Fo

rm M

ortgage in

clud

es in Paragrap

h 2

2 a p

rovisio

n

requ

iring th

at the m

ortgagee p

rovid

e a no

tice of d

efault givin

g at least 3

0 d

ays to rein

state the m

ortgage.

•N

Y Co

urts h

ave held

that it is a co

ntractu

al con

ditio

n p

receden

t to

foreclo

sure. See G

MA

C M

ortg

ag

e, LLC v. B

ell, 12

8 A

.D.3

d 7

72

, 11

N

.Y.S.3d

73

(Ap

p. D

iv. 2d

Dep

’t 20

15

); Wells Fa

rgo

Ba

nk, N

.A. v Eisler,

11

8 A

.D.3

d 9

82

, 98

8 N

.Y.S.2d

68

2 (A

pp

. Div. 2

d D

ep’t 2

01

4);

HSB

C

Mo

rtg. C

orp

. (USA

) v. Gerb

er, 10

0 A

.D.3

d 9

66

, 95

5 N

.Y.S.2d

13

1 (A

pp

. D

iv. 2d

Dep

’t 20

12

).

•In

FHA

mo

rtgages, the n

otice is o

nly ad

dressed

in th

e regulatio

ns.

(We’ll talk ab

ou

t this later in

the p

resentatio

n.)

22

22

Defen

ses: Co

ntractu

al No

tice of D

efault

•Lo

ok fo

r similar p

rob

lems to

tho

se that arise in

the 1

30

4 N

otice –

inco

nsisten

cy with

the 1

30

4 N

otice, in

con

sistency w

ith th

e Plain

tiff’s affid

avits/com

plain

t, etc.

•N

ote th

at wh

ile RPA

PL §

13

04

do

es no

t requ

ire that th

e defau

lt be re

-n

otice in

the even

t of a rein

statemen

t and

re-defau

lt with

in o

ne year,

the m

ortgage h

as no

such

pro

vision

.

•A

lso b

e sure th

at it was sen

t to th

e pro

per p

erson

. (Paragraph

15

of

GSE Fo

rm M

ortgage)

23

23

Defen

ses: FHA

& R

ESPA

•B

oth

HU

D (fo

r FHA

mo

rtgages) and

RESPA

(for all fed

erally related

mo

rtgages) pro

vide regu

lation

s limitin

g the ab

ility of servicers to

fo

reclose.

•H

UD

’s mo

rtgage servicing regu

lation

s –2

4 C

FR §

20

3.5

00

-61

6 –

lack an

y direct, p

rivate right o

f enfo

rcemen

t. Regu

lation

X –

12

CFR

§1

02

4 –

wh

ich im

plem

ents R

ESPA, o

nly p

rovid

es mo

netary d

amages.

•H

ow

ever, bo

th are (w

ith so

me excep

tion

s) inco

rpo

rated d

irectly into

th

e langu

age of th

e mo

rtgage con

tract, so yo

u sh

ou

ld rely o

n th

e co

ntractu

al ho

ok in

the m

ortgage rath

er than

the regu

lation

directly.

24

24

Defen

ses: FHA

•H

UD

’s regulatio

ns in

clud

e extensive p

re-foreclo

sure req

uirem

ents

•Th

ree fu

ll mo

nth

ly paym

en

t defau

lt requ

ired (2

03

.60

6)

•N

otice

of d

efault (2

03

.60

2, 6

06

)

•Face

to face

meetin

g (20

3.6

04

)

•R

einstatem

en

t allow

ance (2

03

.60

8)

•Evalu

ation

for lo

ss mitigatio

n b

efore 4

mo

nth

ly paym

en

ts are du

e (20

3.6

05

)

•In

mo

rtgages mad

e befo

re Septem

ber 2

01

4, th

e du

ty to fo

llow

HU

D

regulatio

ns is em

bo

died

in th

e No

te (Paragraph

6(b

)) and

Mo

rtgage (Paragrap

h 9

(d)).

25

25

Defen

ses: FHA

•N

Y Co

urts h

ave generally fo

un

d th

at the regu

lation

s can b

e used

to p

rovid

e a d

efense to

a foreclo

sure actio

n. See, e.g

., Green

Pla

net Servicin

g, LLC

v. M

artin

, 14

1 A

.D.3

d 8

92

, 89

3, 3

4 N

.Y.S.3d

91

1 (A

pp

. Div. 3

d D

ep’t 2

01

6);

HSB

C B

an

k USA

, N.A

. v. Teed, 4

8 M

isc. 3d

19

4, 1

97

, 4 N

.Y.S.3d

82

6, 8

28

(Steu

ben

Cty. C

t. 20

14

); Fed. N

at. M

ortg

. Ass'n

v. Ricks, 8

3 M

isc. 2d

81

4,

82

5, 3

72

N.Y.S.2

d 4

85

, 49

7 (K

ings C

ty. Sup

. Ct. 1

97

5).

•B

ut th

e langu

age inco

rpo

rating th

e regulatio

ns b

y reference w

as remo

ved

with

ou

t no

tice in Se

ptem

ber 2

01

4. In

Janu

ary, HU

D m

ade a p

relimin

ary d

ecision

to ad

d th

e langu

age back an

d accep

ted p

ub

lic com

men

ts on

it. W

e’ll see wh

at hap

pen

s!

26

26

Defen

ses: RESPA

•Likew

ise, RESPA

/Regu

lation

X is in

corp

orated

by referen

ce into

the G

SE Fo

rm M

ortgage.

•Paragrap

h 1

6 states “A

ll rights an

d o

bligatio

ns co

ntain

ed in

this Secu

rity In

strum

ent are su

bject to

any req

uirem

ents an

d lim

itation

s of A

pp

licable

Law.”

•A

pp

licable

Law is d

efined

in Paragrap

h I as “A

ll con

trollin

g app

licable

federal, state an

d lo

cal statutes, regu

lation

s, ord

inan

ces and

adm

inistrative

rules an

d o

rders (th

at have th

e effect of law

) as well as all ap

plicab

le final,

no

n-ap

pealab

le, jud

icial op

inio

ns”.

•So

, wh

ere Regu

lation

X lim

its the ab

ility of a servicer to

initiate fo

reclosu

re (1

2 C

.F.R. §

10

24

.41

), that lim

itation

sup

ersedes th

e right o

f the

mo

rtagageeto

brin

g suit u

po

n d

efault (Paragrap

h 2

2 o

f the m

ortgage).

27

27

Defen

ses: RESPA

•P

rior to

Janu

ary 10

, 20

14

, RESPA

did

no

t have an

y pro

vision

s that

limited

the righ

t of a servicer to

brin

g a foreclo

sure.

•A

s a result, th

e case law

on

usin

g RESPA

via the m

ortgage co

ntract is

basically n

on

existent, an

d th

ere is a lot o

f case law statin

g that R

ESPA

do

es no

t preven

t a foreclo

sure (b

ecause at th

e time, R

ESPA’s servicin

g ru

les were ab

ou

t QW

Rs –

with

no

limit o

n fo

reclosu

re wh

ile the Q

WR

w

as pen

din

g –an

d m

ainten

ance o

f escrow

accou

nts).

•Fo

cus o

n R

egulatio

n X

, wh

ich is n

ew, an

d th

e mo

rtgage con

tract to

differen

tiate you

rself from

old

case law

.

28

28

Co

nclu

sion

•Th

ank yo

u everyb

od

y.

•Th

ere are samp

le pap

ers in th

e materials.

•If yo

u h

ave any q

uestio

ns later, yo

u can

con

tact us at

jrebella@

mfy.o

rgan

d ciso

be@

lsnyc.o

rg.

29

29

mailto:[email protected]

mailto:[email protected]

§ 1303. Foreclosures; required notices, NY RP ACT & PRO § 1303

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 1

McKinney's Consolidated Laws of New York AnnotatedReal Property Actions and Proceedings Law (Refs & Annos)

Chapter 81. Of the Consolidated Laws (Refs & Annos)Article 13. Action to Foreclose a Mortgage (Refs & Annos)

McKinney's RPAPL § 1303

§ 1303. Foreclosures; required notices

Effective: December 20, 2016Currentness

1. The foreclosing party in a mortgage foreclosure action, involving residential real property shall provide notice to:

(a) any mortgagor if the action relates to an owner-occupied one-to-four family dwelling; and

(b) any tenant of a dwelling unit in accordance with the provisions of this section.

2. The notice to any mortgagor required by paragraph (a) of subdivision one of this section shall be delivered with thesummons and complaint. Such notice shall be in bold, fourteen-point type and shall be printed on colored paper thatis other than the color of the summons and complaint, and the title of the notice shall be in bold, twenty-point type.The notice shall be on its own page.

3. The notice to any mortgagor required by paragraph (a) of subdivision one of this section shall appear as follows:

Help for Homeowners in Foreclosure

New York State Law requires that we send you this notice about the foreclosure process. Please read it carefully.

Summons and Complaint

You are in danger of losing your home. If you fail to respond to the summons and complaint in this foreclosure action,you may lose your home. Please read the summons and complaint carefully. You should immediately contact an attorneyor your local legal aid office to obtain advice on how to protect yourself.

Sources of Information and Assistance

The State encourages you to become informed about your options in foreclosure. In addition to seeking assistance froman attorney or legal aid office, there are government agencies and non-profit organizations that you may contact forinformation about possible options, including trying to work with your lender during this process.

To locate an entity near you, you may call the toll-free helpline maintained by the New York State Department ofFinancial Services at (enter number) or visit the Department's website at (enter web address).

Rights and Obligations

30



YOU ARE NOT REQUIRED TO LEAVE YOUR HOME AT THIS TIME. You have the right to stay in your homeduring the foreclosure process. You are not required to leave your home unless and until your property is sold at auctionpursuant to a judgment of foreclosure and sale.

Regardless of whether you choose to remain in your home, YOU ARE REQUIRED TO TAKE CARE OF YOURPROPERTY and pay property taxes in accordance with state and local law.

Foreclosure rescue scams

Be careful of people who approach you with offers to “save” your home. There are individuals who watch for notices offoreclosure actions in order to unfairly profit from a homeowner's distress. You should be extremely careful about anysuch promises and any suggestions that you pay them a fee or sign over your deed. State law requires anyone offeringsuch services for profit to enter into a contract which fully describes the services they will perform and fees they willcharge, and which prohibits them from taking any money from you until they have completed all such promised services.

3-a. No later than sixty days after the effective date of this subdivision, the department of financial services shall publisha Consumer Bill Of Rights, in consultation with all stakeholders, which shall detail the rights and responsibilities ofthe plaintiff and defendant in a foreclosure proceeding. Such Bill of Rights shall be updated on an annual basis and asappropriate.

4. The notice to any tenant required by paragraph (b) of subdivision one of this section shall be delivered within tendays of the service of the summons and complaint. Such notice shall be in bold, fourteen-point type, and the paragraphof the notice beginning with the words “ALL RENT-STABILIZED” and ending with the words “FULL HEARINGIN COURT” shall be printed entirely in capital letters and underlined. The foreclosing party shall provide its name,address and telephone number on the notice. The notice shall be printed on colored paper that is other than the colorof the summons and complaint, and the title of the notice shall be in bold, twenty-point type. The notice shall be onits own page. For buildings with fewer than five dwelling units, the notice shall be delivered to the tenant, by certifiedmail, return receipt requested, and by first-class mail to the tenant's address at the property if the identity of the tenantis known to the plaintiff, and by first-class mail delivered to “occupant” if the identity of the tenant is not known to theplaintiff. For buildings with five or more dwelling units, a legible copy of the notice shall be posted on the outside ofeach entrance and exit of the building.

5. The notice required by paragraph (b) of subdivision one of this section shall appear as follows:

Notice to Tenants of Buildings in Foreclosure

New York State Law requires that we provide you this notice about the foreclosure process. Please read it carefully.

We, (name of foreclosing party), are the foreclosing party and are located at (foreclosing party's address). We can bereached at (foreclosing party's telephone number).

The dwelling where your apartment is located is the subject of a foreclosure proceeding. If you have a lease, are not theowner of the residence, and the lease requires payment of rent that at the time it was entered into was not substantiallyless than the fair market rent for the property, you may be entitled to remain in occupancy for the remainder of your leaseterm. If you do not have a lease, you will be entitled to remain in your home until ninety days after any person or entitywho acquires title to the property provides you with a notice as required by section 1305 of the Real Property Actions and

31



Proceedings Law. The notice shall provide information regarding the name and address of the new owner and your rightsto remain in your home. These rights are in addition to any others you may have if you are a subsidized tenant underfederal, state or local law or if you are a tenant subject to rent control, rent stabilization or a federal statutory scheme.

ALL RENT-STABILIZED TENANTS AND RENT-CONTROLLED TENANTS ARE PROTECTED UNDERTHE RENT REGULATIONS WITH RESPECT TO EVICTION AND LEASE RENEWALS. THESE RIGHTSARE UNAFFECTED BY A BUILDING ENTERING FORECLOSURE STATUS. THE TENANTS IN RENT-STABILIZED AND RENT-CONTROLLED BUILDINGS CONTINUE TO BE AFFORDED THE SAME LEVELOF PROTECTION EVEN THOUGH THE BUILDING IS THE SUBJECT OF FORECLOSURE. EVICTIONSCAN ONLY OCCUR IN NEW YORK STATE PURSUANT TO A COURT ORDER AND AFTER A FULLHEARING IN COURT.

If you need further information, please call the New York State Department of Financial Services' toll-free helpline at(enter number) or visit the Department's website at (enter web address).

6. The department of financial services shall prescribe the telephone number and web address to be included in eithernotice.

7. The department of financial services shall post on its website or otherwise make readily available the name and contactinformation of government agencies or non-profit organizations that may be contacted by mortgagors for informationabout the foreclosure process, including maintaining a toll-free helpline to disseminate the information required by thissection.

Credits(Added L.2006, c. 308, § 4, eff. Feb. 1, 2007. Amended L.2007, c. 154, § 13, eff. July 3, 2007; L.2008, c. 472, § 1, eff. Aug.5, 2008; L.2009, c. 507, § 1, eff. Jan. 14, 2010; L.2010, c. 358, § 1, eff. Sept. 12, 2010; L.2011, c. 62, pt. A, § 104, eff. Oct.3, 2011; L.2012, c. 155, § 83, eff. July 18, 2012; L.2016, c. 73, pt. Q, § 5, eff. Dec. 20, 2016.)

McKinney's R. P. A. P. L. § 1303, NY RP ACT & PRO § 1303Current through L.2017, chapters 1 to 6.

End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works.

32

§ 1304. Required prior notices, NY RP ACT & PRO § 1304





§ 1304. Required prior notices

Effective: December 20, 2016Currentness

1. [Eff. until Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 1 below.]Notwithstanding any other provision of law, with regard to a home loan, at least ninety days before a lender, an assigneeor a mortgage loan servicer commences legal action against the borrower, or borrowers at the property address and anyother address of record, including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give noticeto the borrower in at least fourteen-point type which shall include the following:

“YOU MAY BE AT RISK OF

FORECLOSURE. PLEASE READ THE FOLLOWING NOTICE CAREFULLY”

“As of ___, your home loan is ___ days and ___ dollars in default. Under New York State Law, we are required to sendyou this notice to inform you that you are at risk of losing your home.

Attached to this notice is a list of government approved housing counseling agencies in your area which provide freecounseling. You can also call the NYS Office of the Attorney General's Homeowner Protection Program (HOPP)toll-free consumer hotline to be connected to free housing counseling services in your area at 1-855-HOME-456(1-855-466-3456), or visit their website at http://www.aghomehelp.com/. A statewide listing by county is also available athttp://www.dfs.ny.gov/consumer/mortg nys np counseling agencies.htm. Qualified free help is available; watch out forcompanies or people who charge a fee for these services.

Housing counselors from New York-based agencies listed on the website above are trained to help homeowners who arehaving problems making their mortgage payments and can help you find the best option for your situation. If you wish,you may also contact us directly at _________ and ask to discuss possible options.

While we cannot assure that a mutually agreeable resolution is possible, we encourage you to take immediate steps totry to achieve a resolution. The longer you wait, the fewer options you may have.

If you have not taken any actions to resolve this matter within 90 days from the date this notice was mailed, we maycommence legal action against you (or sooner if you cease to live in the dwelling as your primary residence.)

If you need further information, please call the New York State Department of Financial Services' toll-free helpline at(show number) or visit the Department's website at (show web address).

IMPORTANT: You have the right to remain in your home until you receive a court order telling you to leave theproperty. If a foreclosure action is filed against you in court, you still have the right to remain in the home until a courtorders you to leave. You legally remain the owner of and are responsible for the property until the property is sold by

33



you or by order of the court at the conclusion of any foreclosure proceedings. This notice is not an eviction notice, and

a foreclosure action has not yet been commenced against you. 1

1. [Eff. Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 1 above.]Notwithstanding any other provision of law, with regard to a high-cost home loan, as such term is defined in sectionsix-l of the banking law, a subprime home loan or a non-traditional home loan, at least ninety days before a lender ora mortgage loan servicer commences legal action against the borrower, including mortgage foreclosure, the lender ormortgage loan servicer shall give notice to the borrower(s) at the property address and any other address of record inat least fourteen-point type which shall include the following:

“YOU MAY BE AT RISK OF

FORECLOSURE. PLEASE READTHE FOLLOWING NOTICE CAREFULLY”

“As of ___, your home loan is ___ days and _______ dollars in default. Under New York State Law, we are requiredto send you this notice to inform you that you are at risk of losing your home. There may be options available to youto keep your home. This may include applying for a loan modification of your mortgage, or reinstating your loan bymaking the payment.

Attached to this notice is a list of government approved housing counseling agencies in your area which provide free orvery low-cost counseling. You can also call the NYS Office of the Attorney General's Homeowner Protection Program(HOPP) toll-free consumer hotline to be connected to free housing counseling services in your area at 1-855-HOME-456(1-855-466-3456), or visit their website at http://www.aghomehelp.com/. A statewide listing by county is also available athttp://www.dfs.ny.gov/consumer/mortg nys np counseling agencies.htm. Qualified free help is available; watch out forcompanies or people who charge a fee for these services.

Housing counselors from New York-based agencies listed on the website above are trained to help homeowners who arehaving problems making their mortgage payments and can help you find the best option for your situation. If you wish,you may also contact us directly at __________ and ask to discuss possible options.

While we cannot assure that a mutually agreeable resolution is possible, we encourage you to take immediate steps totry to achieve a resolution. The longer you wait, the fewer options you may have.

If you have not taken any actions to resolve this matter within 90 days from the date this notice was mailed, we maycommence legal action against you (or sooner if you cease to live in the dwelling as your primary residence.)

If you need further information, please call the New York State Department of Financial Services' toll-free helpline at

(show number) or visit the Department's website at (show web address)”. 2

IMPORTANT: You have the right to remain in your home until you receive a court order telling you to leave theproperty. If a foreclosure action is filed against you in court, you still have the right to remain in the home until a courtorders you to leave. You legally remain the owner of and are responsible for the property until the property is sold byyou or by order of the court at the conclusion of any foreclosure proceedings. This notice is not an eviction notice, and

a foreclosure action has not yet been commenced against you. 3

34



2. [Eff. until Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 2 below.] Suchnotice shall be sent by such lender, assignee (including purchasing investor) or mortgage loan servicer to the borrower,by registered or certified mail and also by first-class mail to the last known address of the borrower, and to the residencethat is the subject of the mortgage. Such notice shall be sent by the lender, assignee or mortgage loan servicer in a separateenvelope from any other mailing or notice. Notice is considered given as of the date it is mailed. The notice shall containa current list of at least five housing counseling agencies serving the county where the property is located from the mostrecent listing available from department of financial services. The list shall include the counseling agencies' last knownaddresses and telephone numbers. The department of financial services shall make available on its websites a listing, bycounty, of such agencies. The lender, assignee or mortgage loan servicer shall use such lists to meet the requirementsof this section.

2. [Eff. Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 2 above.] Suchnotice shall be sent by the lender or mortgage loan servicer to the borrower, by registered or certified mail and also byfirst-class mail to the last known address of the borrower, and to the residence which is the subject of the mortgage.Notice is considered given as of the date it is mailed. The notice shall contain a current list of United States departmentof housing and urban development approved housing counseling agencies, or other housing counseling agencies servingthe county where the property is located from the most recent listing available from the department of financial services.The list shall include the counseling agencies' last known addresses and telephone numbers. The department of financialservices shall make available a listing, by county, of such agencies which the lender or mortgage loan servicer may useto meet the requirements of this section.

3. The ninety day period specified in the notice contained in subdivision one of this section shall not apply, or shall ceaseto apply, if the borrower has filed for bankruptcy protection under federal law, or if the borrower no longer occupiesthe residence as the borrower's principal dwelling. Nothing herein shall relieve the lender, assignee or mortgage loanservicer of the obligation to send such notice, which notice shall be a condition precedent to commencing a foreclosureproceeding.

4. The notice and the ninety day period required by subdivision one of this section need only be provided once in a twelvemonth period to the same borrower in connection with the same loan and same delinquency. Should a borrower cure adelinquency but re-default in the same twelve month period, the lender shall provide a new notice pursuant to this section.

5. For any borrower known to have limited English proficiency, the notice required by subdivision one of this sectionshall be in the borrower's native language (or a language in which the borrower is proficient), provided that the languageis one of the six most common non-English languages spoken by individuals with limited English proficiency in the stateof New York, based on United States census data. The department of financial services shall post the notice required bysubdivision one of this section on its website in the six most common non-English languages spoken by individuals withlimited English proficiency in the state of New York, based on the United States census data.

6. [Eff. until Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 6 below.](a) “Home loan” means a loan, including an open-end credit plan, other than a reverse mortgage transaction, in which:

(i) The borrower is a natural person;

35



(ii) The debt is incurred by the borrower primarily for personal, family, or household purposes;

(iii) The loan is secured by a mortgage or deed of trust on real estate improved by a one to four family dwelling, or acondominium unit, in either case, used or occupied, or intended to be used or occupied wholly or partly, as the home orresidence of one or more persons and which is or will be occupied by the borrower as the borrower's principal dwelling;and

(iv) The property is located in this state.

(b) “Lender” means a mortgage banker as defined in paragraph (f) of subdivision one of section five hundred ninetyof the banking law or an exempt organization as defined in paragraph (e) of subdivision one of section five hundredninety of the banking law.

6. [Eff. Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a. See, also, subd. 6 above.] (a) “Annual percentage rate”means the annual percentage rate for the loan calculated according to the provisions of the Federal Truth-in-LendingAct (15 U.S.C. § 1601, et seq.), and the regulations promulgated thereunder by the federal reserve board (as said act andregulations are amended from time to time).

(b) “Home loan” means a home loan, including an open-end credit plan, other than a reverse mortgage transaction,in which:

(i) The principal amount of the loan at origination did not exceed the conforming loan size that was in existence at thetime of origination for a comparable dwelling as established by the federal national mortgage association;

(ii) The borrower is a natural person;

(iii) The debt is incurred by the borrower primarily for personal, family, or household purposes;

(iv) The loan is secured by a mortgage or deed of trust on real estate upon which there is located or there is to be locateda structure or structures intended principally for occupancy of from one to four families which is or will be occupied bythe borrower as the borrower's principal dwelling; and

(v) The property is located in this state.

(c) “Subprime home loan” for the purposes of this section, means a home loan consummated between January first, twothousand three and September first, two thousand eight in which the terms of the loan exceed the threshold as definedin paragraph (d) of this subdivision. A subprime home loan excludes a transaction to finance the initial construction ofa dwelling, a temporary or “bridge” loan with a term of twelve months or less, such as a loan to purchase a new dwellingwhere the borrower plans to sell a current dwelling within twelve months, or a home equity line of credit.

36



(d) “Threshold” means, for a first lien mortgage loan, the annual percentage rate of the home loan at consummationof the transaction exceeds three percentage points over the yield on treasury securities having comparable periods ofmaturity to the loan maturity measured as of the fifteenth day of the month in which the loan was consummated; or fora subordinate mortgage lien, the annual percentage rate of the home loan at consummation of the transaction equalsor exceeds five percentage points over the yield on treasury securities having comparable periods of maturity on thefifteenth day of the month in which the loan was consummated; as determined by the following rules: if the terms ofthe home loan offer any initial or introductory period, and the annual percentage rate is less than that which will applyafter the end of such initial or introductory period, then the annual percentage rate that shall be taken into account forpurposes of this section shall be the rate which applies after the initial or introductory period.

(e) “Non-traditional home loan” shall mean a payment option adjustable rate mortgage or an interest only loanconsummated between January first, two thousand three and September first, two thousand eight.

(f) For purposes of determining the threshold, the department of financial services shall publish on its website a listingof constant maturity yields for U.S. Treasury securities for each month between January first, two thousand three andSeptember first, two thousand eight, as published in the Federal Reserve Statistical Release on selected interest rates,commonly referred to as the H.15 release, in the following maturities, to the extent available in such release: six month,one year, two year, three year, five year, seven year, ten year, thirty year.

(g) “Lender” means a mortgage banker as defined in paragraph (f) of subdivision one of section five hundred ninetyof the banking law or an exempt organization as defined in paragraph (e) of subdivision one of section five hundredninety of the banking law.

7. The department of financial services shall prescribe the telephone number and web address to be included in the notice.

Credits(Added L.2008, c. 472, § 2, eff. Sept. 1, 2008. Amended L.2009, c. 507, § 1-a, eff. Jan. 14, 2010; L.2011, c. 62, pt. A, § 104,eff. Oct. 3, 2011; L.2012, c. 155, § 84, eff. July 18, 2012; L.2012, c. 155, § 85; L.2016, c. 73, pt. Q, §§ 6, 7, eff. Dec. 20, 2016.)

Footnotes1 So in original. (closing quotation marks should be bracketed.)

2 So in original. (closing quotation marks should be bracketed.)

3 So in original. (closing quotation marks inadvertently omitted.)



37

§ 1306. Filing with superintendent, NY RP ACT & PRO § 1306





§ 1306. Filing with superintendent

Effective: October 3, 2011Currentness

1. Each lender, assignee or mortgage loan servicer shall file with the superintendent of financial services (superintendent)within three business days of the mailing of the notice required by subdivision one of section thirteen hundred four ofthis article or subsection (f) of section 9-611 of the uniform commercial code the information required by subdivisiontwo of this section. Notwithstanding any other provision of the laws of this state, this filing shall be made electronicallyas provided for in subdivision three of this section. Any complaint served in a proceeding initiated pursuant to this articleshall contain, as a condition precedent to such proceeding, an affirmative allegation that at the time the proceeding iscommenced, the plaintiff has complied with the provisions of this section.

2. Each filing delivered to the superintendent shall be on such form as the superintendent shall prescribe, and shall includeat a minimum, the name, address, last known telephone number of the borrower, and the amount claimed as due andowing on the mortgage, and such other information as will enable the superintendent to ascertain the type of loan atissue. The superintendent may subsequently request such readily available information as may be reasonably necessaryto facilitate a review of whether the borrower might benefit from counseling or other foreclosure prevention services.

3. Within one hundred eighty days of the effective date of this section, or such later time as the superintendent maydetermine, the superintendent shall develop with the assistance of the commissioner of the division of housing andcommunity renewal, an electronic database that shall be capable of receiving all filings required by this section.

4. The information provided to the superintendent pursuant to this section shall not be subject to article six of thepublic officers law or paragraphs (a), (c) and (d) of subdivision one or subdivision six of section ninety-four of thepublic officers law. All such information shall be used by the superintendent exclusively for the purposes of monitoringon a statewide basis the extent of foreclosure filings within this state, to perform an analysis of loan types which werethe subject of a pre-foreclosure notice and directing as appropriate available public and private foreclosure preventionand counseling services to borrowers at risk of foreclosure. The superintendent may share information contained in thedatabase with housing counseling agencies designated by the division of housing and community renewal as well as withother state agencies with jurisdiction over housing, for the purpose of coordinating or securing help for borrowers atrisk of foreclosure.

5. The superintendent is hereby authorized to promulgate such rules and regulations as shall be necessary to implementthe purposes of this section.

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§ 1306. Filing with superintendent, NY RP ACT & PRO § 1306


Credits(Added L.2009, c. 507, § 5, eff. Feb. 13, 2010. Amended L.2011, c. 62, pt. A, § 104, eff. Oct. 3, 2011; L.2011, c. 182, §9, eff. July 20, 2011.)



39

Rule 4518. Business records, NY CPLR Rule 4518


McKinney's Consolidated Laws of New York AnnotatedCivil Practice Law and Rules (Refs & Annos)

Chapter Eight. Of the Consolidated LawsArticle 45. Evidence (Refs & Annos)

McKinney's CPLR Rule 4518

Rule 4518. Business records

Effective: August 15, 2007Currentness

(a) Generally. Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandumor record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction,occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regularcourse of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable timethereafter. An electronic record, as defined in section three hundred two of the state technology law, used or stored assuch a memorandum or record, shall be admissible in a tangible exhibit that is a true and accurate representation of suchelectronic record. The court may consider the method or manner by which the electronic record was stored, maintainedor retrieved in determining whether the exhibit is a true and accurate representation of such electronic record. All othercircumstances of the making of the memorandum or record, including lack of personal knowledge by the maker, may beproved to affect its weight, but they shall not affect its admissibility. The term business includes a business, profession,occupation and calling of every kind.

(b) Hospital bills. A hospital bill is admissible in evidence under this rule and is prima facie evidence of the facts contained,provided it bears a certification by the head of the hospital or by a responsible employee in the controller's or accountingoffice that the bill is correct, that each of the items was necessarily supplied and that the amount charged is reasonable.This subdivision shall not apply to any proceeding in a surrogate's court nor in any action instituted by or on behalf ofa hospital to recover payment for accommodations or supplies furnished or for services rendered by or in such hospital,except that in a proceeding pursuant to section one hundred eighty-nine of the lien law to determine the validity andextent of the lien of a hospital, such certified hospital bills are prima facie evidence of the fact of services and of thereasonableness of any charges which do not exceed the comparable charges made by the hospital in the care of workmen'scompensation patients.

(c) Other records. All records, writings and other things referred to in sections 2306 and 2307 are admissible in evidenceunder this rule and are prima facie evidence of the facts contained, provided they bear a certification or authentication bythe head of the hospital, laboratory, department or bureau of a municipal corporation or of the state, or by an employeedelegated for that purpose or by a qualified physician. Where a hospital record is in the custody of a warehouse, or“warehouseman” as that term is defined by paragraph (h) of subdivision one of section 7-102 of the uniform commercialcode, pursuant to a plan approved in writing by the state commissioner of health, admissibility under this subdivisionmay be established by a certification made by the manager of the warehouse that sets forth (i) the authority by whichthe record is held, including but not limited to a court order, order of the commissioner, or order or resolution of thegoverning body or official of the hospital, and (ii) that the record has been in the exclusive custody of such warehouseor warehousemen since its receipt from the hospital or, if another has had access to it, the name and address of suchperson and the date on which and the circumstances under which such access was had. Any warehouseman providinga certification as required by this subdivision shall have no liability for acts or omissions relating thereto, except for

40



intentional misconduct, and the warehouseman is authorized to assess and collect a reasonable charge for providing thecertification described by this subdivision.

(d) Any records or reports relating to the administration and analysis of a genetic marker or DNA test, including recordsor reports of the costs of such tests, administered pursuant to sections four hundred eighteen and five hundred thirty-two of the family court act or section one hundred eleven-k of the social services law are admissible in evidence underthis rule and are prima facie evidence of the facts contained therein provided they bear a certification or authenticationby the head of the hospital, laboratory, department or bureau of a municipal corporation or the state or by an employeedelegated for that purpose, or by a qualified physician. If such record or report relating to the administration and analysisof a genetic marker test or DNA test or tests administered pursuant to sections four hundred eighteen and five hundredthirty-two of the family court act or section one hundred eleven-k of the social services law indicates at least a ninety-five percent probability of paternity, the admission of such record or report shall create a rebuttable presumption ofpaternity, and shall, if unrebutted, establish the paternity of and liability for the support of a child pursuant to articlesfour and five of the family court act.

(e) Notwithstanding any other provision of law, a record or report relating to the administration and analysis of a geneticmarker test or DNA test certified in accordance with subdivision (d) of this rule and administered pursuant to sectionsfour hundred eighteen and five hundred thirty-two of the family court act or section one hundred eleven-k of the socialservices law is admissible in evidence under this rule without the need for foundation testimony or further proof ofauthenticity or accuracy unless objections to the record or report are made in writing no later than twenty days beforea hearing at which the record or report may be introduced into evidence or thirty days after receipt of the test results,whichever is earlier.

(f) Notwithstanding any other provision of law, records or reports of support payments and disbursements maintainedpursuant to title six-A of article three of the social services law by the office of temporary and disability assistance orthe fiscal agent under contract to the office for the provision of centralized collection and disbursement functions areadmissible in evidence under this rule, provided that they bear a certification by an official of a social services districtattesting to the accuracy of the content of the record or report of support payments and that in attesting to the accuracyof the record or report such official has received confirmation from the office of temporary and disability assistanceor the fiscal agent under contract to the office for the provision of centralized collection and disbursement functionspursuant to section one hundred eleven-h of the social services law that the record or report of support payments reflectsthe processing of all support payments in the possession of the office or the fiscal agent as of a specified date, and thatthe document is a record or report of support payments maintained pursuant to title six-A of article three of the socialservices law. If so certified, such record or report shall be admitted into evidence under this rule without the need foradditional foundation testimony. Such records shall be the basis for a permissive inference of the facts contained thereinunless the trier of fact finds good cause not to draw such inference.

(g) Pregnancy and childbirth costs. Any hospital bills or records relating to the costs of pregnancy or birth of a childfor whom proceedings to establish paternity, pursuant to sections four hundred eighteen and five hundred thirty-two ofthe family court act or section one hundred eleven-k of the social services law have been or are being undertaken, areadmissible in evidence under this rule and are prima facie evidence of the facts contained therein, provided they bear acertification or authentication by the head of the hospital, laboratory, department or bureau of a municipal corporationor the state or by an employee designated for that purpose, or by a qualified physician.

41



Credits(L.1962, c. 308. Amended Jud.Conf.1970 Proposal No. 2; L.1982, c. 695, § 3; L.1983, c. 311, § 1; L.1984, c. 792, § 3;L.1992, c. 381, § 1; L.1994, c. 170, § 350; L.1995, c. 81, § 236; L.1997, c. 398, §§ 87 to 89, eff. Nov. 11, 1997; L.2002, c.136, § 1, eff. July 23, 2002; L.2005, c. 741, § 1, eff. Oct. 18, 2005; L.2007, c. 601, § 10, eff. Aug. 15, 2007.)

McKinney's CPLR Rule 4518, NY CPLR Rule 4518Current through L.2017, chapters 1 to 6.


42

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS: FORECLOSURE RESOLUTION PART 1 ----------------------------------------------------------------------------X BANK OF AMERICA, NATIONAL ASSOCIATION,

Plaintiff,

-against-

BRENDA V. THOMPSON; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; LENOX HILL MEDICAL ANESTHESIOLOGY; MUNICIPAL CREDIT UNION; CONSOLIDATED DEVELOPMENT OF CANARSIE; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; EMPIRE PORTFOLIOS INC, “JOHN DOE #1” through “JOHN DOE #12,” the last twelve names being fictitious and unknown to the plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in the complaint,

Defendants.

----------------------------------------------------------------------------X

Index No. 505850/2014 Hon. Noach Dear

DEFENDANT’S MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND IN SUPPORT OF HER CROSS-

MOTION FOR SUMMARY JUDGMENT DISMISSING THE COMPLAINT

BROOKLYN LEGAL SERVICES

Catherine P. Isobe, Of Counsel 1360 Fulton Street, Suite 301 Brooklyn, New York 11216

(718) 233-6434 (voice) (718) 398-6414 (fax)

Attorneys for Defendant Brenda V. Thompson

43

TABLE OF CONTENTS PRELIMINARY STATEMENT ................................................................................................................... 1 STATEMENT OF FACTS ............................................................................................................................ 1 ARGUMENT ................................................................................................................................................ 5 I. Should the Court Decline to Dismiss this Action, Plaintiff’s Motion for Summary

Judgment Must Be Denied ............................................................................................................... 5 A. Summary Judgment Standard .................................................................................................. 5

B. Summary Judgment Must Be Denied Because Plaintiff Has Failed To Establish Several Elements of Its Case ................................................................................... 6

1. Plaintiff’s Affidavit of Merit Is By an Individual Without Personal

Knowledge of the Facts and Without Competency to Testify Based on a Review of Business Records ......................................................................................... 7

2. Plaintiff Failed to Establish Its Standing to Foreclose ................................................... 11

3. Plaintiff Failed to Establish Compliance With RPAPL §1304 ...................................... 13 a. RPAPL §1304 Applies to this Action Because the Subject Loan Is a

Home Loan as Defined by RPAPL §1304 ............................................................... 14 b. Plaintiff’s Own Submissions Demonstrate Its Failure to Comply

with RPAPL §1304. ................................................................................................. 15

4. Plaintiff Failed to Establish Compliance With RPAPL §1306 ...................................... 16

5. Plaintiff Failed to Establish Compliance With RPAPL §1303 ...................................... 18

C. The Court Should Not Strike Defendant’s Answer Or Dismiss Her Counterclaim for Attorney’s Fees ........................................................................................ 19

II. The Court Should Grant Summary Judgment to Defendant and Dismiss this

Action ............................................................................................................................................. 22

A. Defendant Has Established that RPAPL §1304 Applies and that Plaintiff Did Not Strictly Comply with RPAPL §1304 ...................................................................... 22

B. Defendant Has Established that RPAPL §1306 Applies and that Plaintiff

Did Not Strictly Comply with RPAPL §1306 ...................................................................... 24 III. The Court Should Order a Hearing to Determine Interest Tolling Under CPLR

3012-b and Attorney’s Fees Under RPL §282 ............................................................................... 24 CONCLUSION ........................................................................................................................................... 26

44

2

PRELIMINARY STATEMENT Defendant Brenda V. Thompson (“Defendant” or “Ms. Thompson”) respectfully

submits this memorandum in opposition to Plaintiff’s motion for summary judgment and

other relief and in support of her cross-motion for summary judgment dismissing this

action and. Plaintiff’s motion for summary judgment must be denied because Plaintiff

failed to establish compliance with New York Real Property Actions and Proceedings

Law (“RPAPL”) Sections1303, 1304, 1306 and CPLR §3012-b, and Plaintiff failed to

establish standing to foreclose. Ms. Thompson also raises numerous triable issues of fact

sufficient to preclude both summary judgment and the dismissal of her defenses and

counterclaim. Moreover, the Court should grant Ms. Thompson’s cross-motion for

summary judgment and dismiss this action because Ms. Thompson has established that

Plaintiff did not in fact comply with RPAPL §§ 1304 or 1306, both which are conditions

precedent to the maintenance of this action. In addition, the Court should award Ms.

Thompson attorney’s fees on this motion pursuant to RPL §282 and the Court should

order a hearing to determine whether and in what amount to toll interest due to Plaintiff’s

intentional violation of CPLR §3012-b and to determine the amount of attorney’s fees to

award Ms. Thompson’s counsel for the successful defense of this action.

STATEMENT OF FACTS

Background

Ms. Thompson lives with her husband Martin Duchene, her two adult daughters

and two grandchildren in her two-family home at 722A Logan Street, Brooklyn, NY

11208 (“the Subject Property”) (Affidavit of Brenda V. Thompson, dated June 28, 2016

(“Thompson Aff.”) ¶¶1-7, Exhs. 1-3). Ms. Thompson purchased the Subject Property in

45

3

1999 and has resided there ever since (Thompson Aff. ¶3). Ms. Thompson owns a

second, much smaller house at 150 Amboy Street (“Amboy Street Property”) in the

Brownsville section of Brooklyn in which she resided prior to purchasing the Subject

Property (Thompson Aff. ¶4). The Amboy Street Property is currently unoccupied due to

repair issues (Thompson Aff. ¶6).

In 2006, Ms. Thompson refinanced the Subject Property. She received a

misleading and predatory payment-option, negatively amortizing adjustable rate

mortgage in the amount of $360,000 (“the Mortgage”) issued by Countrywide Bank, A

Division of Treasury Bank, N.A. (“Countrywide”) with Mortgage Electronic Registration

Systems, Inc. (“MERS”) designated as the mortgagee of record. The promissory note

(“the Note”) secured by the Mortgage (together with the Note, the “Subject Loan”)

recites an initial annual interest rate of one percent, but that is an illusory rate because it

was only in effect for the first six weeks of the 30 year term of the Subject Loan

(Thompson Aff. Exh. 4).

Ms. Thompson lost her job in 2008 and she eventually fell behind on the

Mortgage (Thompson Aff. ¶¶15-16). On April 20, 2010, BAC Home Loans Servicing,

LP FKA Countrywide Home Loans Servicing, LP (“BAC”) filed an action, as purported

assignee of Countrywide, to foreclose on the Mortgage under index number 9759/2010,

(“2010 Foreclosure Action”) (Affirmation of Catherine P. Isobe, dated June 30, 2016

(“Isobe Aff.) Exh. I). BAC served papers in the 2010 Foreclosure Action to Ms.

Thompson at the Subject Property as her “Actual Place of Residence Within the State and

filed a Request for Judicial Intervention (RJI) in which it acknowledged that the action

46

4

involved a “subprime/high-cost/non-traditional” on an “owner-occupied principal

dwelling” (Isobe Aff. Exhs. J, K).

Ms. Thompson appeared at several mandatory foreclosure settlement conferences

in the 2010 Foreclosure Action, but no settlement was reached (Thompson Aff. ¶18;

Isobe Aff. Exh. L). According to court records BAC filed but later withdrew an ex parte

application for an order of reference in 2010 and then abandoned the 2010 Foreclosure

Action for several years until it obtained an order of discontinuance on March 21, 2014

(Isobe Aff. Exhs. L, M).

Procedural History of This Action

On June 25, 2014, Plaintiff BOA, as the purported holder of the Note and owner

of the Mortgage, commenced this residential foreclosure action against Ms. Thompson

(Isobe Aff. Exh. A ¶6). Ms. Thompson first became aware of the action when a process

server delivered papers to her daughter Niki Thompson at the Subject Property and she

received several copies of the same papers addressed to individuals unknown to Ms.

Thompson (Thompson Aff. ¶¶21-23).

Brooklyn Legal Services1 (“BLS”) assisted Ms. Thompson in preparing her pro se

Verified Answer which BLS served on Plaintiff’s counsel on August 14, 2014 and filed

with the Kings County Clerk on August 18, 2014 (Isobe Aff. Exh. C). In her Verified

Answer, Ms. Thompson asserted, among other defenses, BOA’s lack of standing to

foreclose and its failure to comply with statutory conditions precedent to this action

(Isobe Aff. Exh. D). Plaintiff filed its Verified Reply to Counterclaims on August 25,

2014 (but did not include a copy of this pleading with its motion for summary judgment)

1 Previously known as Bedford-Stuyvesant Community Legal Services.

47

5

(Isobe Aff. Exh. E). In violation Uniform Rule 202.12-a (b), Plaintiff did not file its RJI

until eighteen months after filing its proof of service of the Summons and Complaint

(Isobe Aff. Exh. E). On March 7, 2016, Plaintiff filed a non-compliant RJI without the

residential foreclosure addendum, misstating Ms. Thompson’s address despite being

informed of her correct address at the Subject Property upon receipt of her Verified

Answer (Isobe Aff. Exh. E).

Plaintiff now moves for summary judgment, which Ms. Thompson opposes for

multiple reasons. Ms. Thompson also cross-moves for summary judgment dismissing

this action because Plaintiff failed to comply with RPAPL §§1304 or 1306.

ARGUMENT

I. Should the Court Decline to Dismiss this Action, Plaintiff’s Motion for Summary Judgment Must Be Denied

A. Summary Judgment Standard

Summary judgment is appropriate only where a thorough examination of the

merits clearly demonstrates the absence of any triable issues of fact. E.g., Marine

Midland Bank, N.A. v. Dino & Artie’s Automatic Transmission Co., 168 A.D.2d 610, 610

(2d Dep’t 1990) (internal citations omitted). The party seeking summary judgment “must

make a prima facie showing of entitlement to judgment as a matter of law, tendering

sufficient evidence to eliminate any material issues of fact from the case.” Midfirst Bank

v. Agho, 121 A.D.3d 343, 347 (2d Dep’t 2014), citing Winegrad v. N.Y. Univ. Med.

Center, 64 N.Y.2d 851, 853 (1985). Without such a showing, summary judgment must

be denied. Id. at 348. Moreover, the summary judgment proponent must make this

showing by “tender of evidentiary proof in admissible form.” Friends of Animals v.

Associated Fur Mfrs., 46 N.Y.2d 1065, 1067 (1979) (emphasis supplied).

48

6

Assuming the summary judgment proponent has met its prima facie burden, the

opponent need only “show facts sufficient to require a trial of any issue of fact” to defeat

the motion. Friends of Animals, 46 N.Y.2d at 1067-1068. Summary judgment “should

not be granted where the facts are in dispute, where conflicting inferences may be drawn

from the evidence, or where there are issues of credibility” Baker v. D.J. Stapleton, Inc.,

43 A.D.3d 839, 839 (2d Dep’t 2007) (citation omitted).

B. Summary Judgment Must Be Denied Because Plaintiff Has Failed to Establish Several Elements of Its Case

Plaintiff has not adduced sufficient probative evidence to establish several

elements of its case, and has instead submitted evidence in support of its motion which

demonstrates the existence of disputed issues of material fact. In particular, Plaintiff has

not established that it owned or held the Note and Mortgage at commencement of this

action or that it complied with conditions precedent to foreclosure as required by RPAPL

§§1304, 1306 and 1303. In addition, Plaintiff has not complied with CPLR §3012-b.

Accordingly, summary judgment must be denied.

Each of plaintiff’s three failures to comply with a statutory condition precedent is

an independent basis for plaintiff’s motion for summary judgment to be denied and for

this action to be dismissed. Furthermore, Plaintiff’s failure to establish that it owned or

held the Note at commencement of this action provides a fourth basis to deny summary

judgment. Accordingly, for each of these four independent reasons, plaintiff’s motion for

summary judgment must be denied.

49

7

1. Plaintiff’s Affidavit of Merit Is by an Individual Without Personal Knowledge of the Facts and Without Competency to Testify Based on a Review of Business Records

A motion for summary judgment “shall be supported by affidavit.” CPLR

§3212(b). The affiant must have personal knowledge of the facts contained in the

affidavit, must recite all material facts and must show that there is no meritorious defense

to the cause of action for which judgment is sought. Id. On summary judgment, “[a]

conclusory affidavit or an affidavit made by one without personal knowledge of the facts

does not establish the proponent’s prima facie burden.” JMD Holding Corp. v. Congress

Fin. Corp., 4 N.Y.3d 373 at 384-385 (2005). See also Almonte v. 638 West 160 LLC, 29

N.Y.S.3d 178 (1st Dep’t 2016) (LLC Managing Member’s affidavit, which was not based

on personal knowledge, could not be considered in support of LLC’s summary judgment

motion); Currie v. Wilhouski, 93 A.D.3d 816 (2d Dep’t 2012) (affidavit of insurer’s

branch claims manager not based on personal knowledge was of no probative or

evidentiary significance on summary judgment).

In support of its motion, Plaintiff submits the affidavit of Jennifer Scott, dated

February 23, 2016 (“Scott Affidavit” or “Scott Aff.”),2 an “Authorized Signatory”

employed at Caliber Home Loans, Inc. (“Caliber”). Caliber is the servicer for U.S. Bank

Trust, N.A. as Trustee for LSF9 Master Participation Trust (“U.S. Bank Trust”) who is

the purported “assignee” of Plaintiff. Ms. Scott’s name and title are literally rubber

stamped onto the first and last pages of this pre-fabricated affidavit (Isobe Aff. Exh F).

Ms. Scott bases her authority to testify on her position as an employee of the loan

servicer Caliber (Isobe Aff. Exh. F, ¶1). Following the Scott Affidavit is a Limited 2 For ease of reference, the Scott Affidavit and the floating document which follows the Affidavit but which is not described or authenticated in the Scott Affidavit are annexed to these papers as Exhibit F to the Isobe Affirmation.

50

8

Power of Attorney authorizing “any officer appointed by the Board of Directors of

[Caliber]” to act as attorney in fact for U.S. Bank Trust with regard to certain trusts

(Isobe Aff. Exh. F). However, Ms. Scott’s affidavit does not reference the Limited

Power of Attorney, and Ms. Scott does not allege that she is an officer appointed by

Caliber’s Board of Directors to act as attorney in fact for U.S. Bank Trust. Certainly, the

term “Authorized Signatory” does not establish this as a matter of law. Furthermore,

neither the Power of Attorney nor Ms. Scott’s affidavit establish that the Subject

Mortgage is included in one of the “certain trusts” covered by the Power of Attorney.

Annexing the Limited Power of Attorney and other unidentified documents included with

Plaintiff’s motion (see Isobe Aff. Exh. G at Certificate of Merger) without any

“identification, explanation or proper evidentiary foundation, is inadequate.” Groupex

Financial Corporation v. Giromas Trading Corp., 22 Misc.3d 1124(A), 2009 WL

399987 (Sup. Ct Kings Co) at *4, citing Higen Assoc. v. Serge El. Co., 190 A.D.2d 712,

713 (2d Dep’t 1993); Citimortgage, Inc. v. Burshtein, 45 Misc.3d 1226(A), 2014

WL6980568 (Sup. Ct Kings Co). Accordingly, the Court should not consider this

document (or other unexplained, unauthenticated documents) on Plaintiff’s motion, and

Plaintiff’s failure to establish Ms. Scott’s relevant authority precludes the admissibility of

her Affidavit.

Even if Ms. Scott had established that she was duly appointed to act as U.S. Bank

Trust’s attorney in fact, under New York law, an attorney in fact may not execute a

principal’s affidavit based on the principal’s knowledge. Perosi v. LiGreci, 98 A.D.3d

230 (2d Dep’t 2012). As an agent, an attorney in fact has no authority to swear to the

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truth of allegations from the principal’s knowledge but which are “not personally known

to the agent” Cymbol v. Cymbol, 122 A.D.2d 771, 772 (2d Dep’t 1986).

Here, Ms. Scott avers no personal knowledge of or involvement with the

transactions and occurrences about which she testifies (Scott Aff. ¶¶1-17). Ms. Scott

states:

I have reviewed the statements set forth herein as against the records kept by CALIBER (sic) I have duly executed this affidavit based upon that review and upon my knowledge of the stated facts and circumstances and books and records maintained by CALIBER.

(Scott Aff. ¶2). This testimony clearly establishes that Ms. Scott’s familiarity with the

facts extends no farther than Caliber’s processes and records. Based on Plaintiff’s own

submissions, Caliber did not service the Mortgage until some point after May 8, 2016, the

date Ocwen Loan Servicing, LLC purportedly sent the RPAPL §1304 Notice to Ms.

Thompson (Isobe Aff. Exh. G). Ms. Scott, whose testimony is based entirely on a review

of Caliber’s records, cannot testify about any transactions or events occurring before the

date on which Caliber began servicing the Mortgage, a date which she has failed to

specify (Scott Aff. ¶¶1-3). Cf. Wells Fargo Bank, N.A. v. Jones, 2016 NY Slip Op 03838,

__A.D.3d __ (1st Dep’t May 17, 2016) (motion to substitute affidavit of merit and

amount due nunc pro tunc properly denied because affiant could not attest to facts in

question because they pre-dated assignment to plaintiff).

Further, Ms. Scott’s “review” of Caliber’s records appears to have been cursory at

best, and lacks the requisite thoroughness and care to establish summary judgment as a

matter of law. Ms. Scott alleges an inaccurate and contradictory chain of title for the

Subject Loan. First, Ms. Scott claims that the Note and Mortgage were assigned to

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MERS by an assignment of mortgage dated October 7, 2005 (Isobe Aff. Exh. F, ¶7).

This claim is false, because the assignment Ms. Scott refers to in paragraph 7 does not

pertain to the Mortgage but to the second lien on the Subject Property, a mortgage issued

by America’s Wholesale Lender in the amount of $45,000 (Isobe Aff. Exh. G, pp.2-3).

Second, Ms. Scott alleges that the Note and Mortgage were assigned to BAC as

memorialized by an assignment dated February 16, 2010 (Isobe Aff. Exh. F, ¶8). Ms.

Scott then skips forward to December 16, 2015—a date after commencement of this

action—when the Note and Mortgage were purportedly (and conveniently) assigned by

Ms. Scott’s employer Caliber, acting as attorney in fact for Bank of America, N.A., to

U.S. Bank Trust, for which Caliber services the loan (Isobe Aff. Exh. F, ¶9; Exh. G).

The reader of the Scott Affidavit is left to “connect the dots” as to how the

Subject Loan went from BAC to Bank of America, N.A. Annexed to the Scott Affidavit

as part of Exhibit C is a somewhat illegible document which purports to be a Certificate

of Merger of BAC into BOA. However, this document is not authenticated by anyone

with the personal knowledge to authenticate it, and the document is not even mentioned

or explained by Ms. Scott. Like the Limited Power of Attorney, this unidentified and

authenticated document cannot be considered in support of Plaintiff’s motion. Higen

Assoc. v. Serge El. Co., 190 A.D.2d 712, 713 (2d Dep’t 1993).

The Scott Affidavit fails to meet the actual knowledge standard of CPLR

§3212(b). See, e.g., Currie v. Wilhouski, 93 A.D.3d 816, 817 (2d Dep’t 2012). Even

applying the lesser evidentiary standard under the business records rule and even

accepting for the sake of argument the conflation of Plaintiff’s and Caliber’s business

records, the Scott Affidavit still falls short. Ms. Scott generally alleges that Caliber’s

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records were made at or near the time of the occurrence of the matters recorded as a

regular practice of Caliber (Isobe Aff. Exh. F ¶2). However, Ms. Scott fails to provide

details concerning what records she reviewed to establish each specific allegation in her

affidavit and some of her allegations are incorrect (Isobe Aff. Exh. F ¶¶7-11). In

addition, the Scott Affidavit cites to the Complaint, verified only by Plaintiff’s counsel,

as proof of her allegations concerning the date of default and the acceleration of the

Mortgage (Isobe Aff. Exh. F ¶¶12-13). Therefore, the Scott Affidavit is not admissible

under the business records exception to the hearsay rule. Vermont Commissioner of

Banking and Insurance v. Welbilt Corp., 133 A.D.2d 396, 397 (2d Dep’t 1987)

(wholesale admission of files’ contents not permitted where proponent had not laid a

foundation for the admission of each individual document under CPLR § 4518).

2. Plaintiff Failed to Establish Its Standing to Foreclose

“Standing to sue requires an interest in the claim at issue in the lawsuit that the

law will recognize as a sufficient predicate for determining the issue at the litigant’s

request. Without. . . standing, a party lacks authority to sue.” Caprer v. Nussbaum, 36

A.D.3d 176, 182 (2d Dep’t 2006) (internal citations and punctuation omitted). Where, as

here, the issue of standing is raised by a defendant,3 “plaintiff must prove its standing if it

is to be entitled to relief.” U.S. Bank., N.A. v. Paulsen, 125 A.D.3d 909, 910 (2d Dep’t

2015). To establish standing to foreclose, Plaintiff must establish, as a matter of law, that

it was either the holder or assignee of the Note at the commencement of this action.

Plaintiff has utterly failed to establish such status.

3 See Ms. Thompson’s Verified Answer (Isobe Aff. Exh. D, p.1).

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The New York Uniform Commercial Code (UCC) governs the determination of

who is a “holder” of an instrument such as the note at issue herein. Slutsky v. Blooming

Grove Inn, 147 A.D.2d 208, 211-212 (2d Dep’t 1989). Indeed, Plaintiff’s counsel

acknowledges the applicability of the UCC in arguing for Plaintiff’s purported standing

to enforce the Note (Attorney Affirmation in Support by Samantha Sandler, Esq. dated

March 7, 2016 (“Sandler Aff.”), ¶37). An instrument “payable to order,” such as the

Note in this case which at origination was payable to Countrywide, is negotiated “by

delivery with any necessary indorsement.” UCC §3-202(1).

Plaintiff’s Complaint is verified by counsel and thus inadmissible as evidence on

its motion for summary judgment. Plaintiff’s only sworn allegations regarding its

purported acquisition of the Note (and indeed of its standing to foreclose) are contained

in the Scott Affidavit:

BANK OF AMERICA, NATIONAL ASSOCIATION, directly or through its agent/custodian, had possession of the original Note and was the owner of the Note and Assignee of the Mortgage prior to commencement of this action. Thereafter the Note was transferred to U.S. BANK TRUST, N.A. AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST.

(Isobe Aff. Exh. F, ¶10) (italics supplied). Ms. Scott alleges no familiarity with the

records of BOA or its unspecified “agent/custodian,” she gives no date when BOA or its

agent/custodian received the original Note, and she does not even specify which entity

actually had possession of the Note prior to commencement of this action (Isobe Aff.

Exh. F ¶¶1-3, 9-11).

These allegations lack the factual specificity required on summary judgment to

establish Plaintiff’s possession of the properly endorsed, original Note at commencement

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of this action. U.S. Bank, N.A. v. Weinman, 123 A.D.3d 1108, 1109 (2d Dep’t 2014);

Homecomings Fin., LLC v. Guldi, 108 A.D.3d 506, 508-509 (2d Dep’t 2013); Deutsche

Bank Nat’l Trust Co. v. Haller, 100 A.D.3d 680, 682 (2d Dep’t 2012) citing HSBC Bank

USA v. Hernandez, 92 A.D.3d 843, 844 (2d Dep’t 2012) (“The affidavit from the

plaintiff's servicing agent did not give any factual details of a physical delivery of the

note and, thus, failed to establish that the plaintiff had physical possession of the note

prior to commencing this action”)

Plaintiff’s lack of evidence that it possessed the Note containing the endorsement

in blank, at a date certain prior to commencement of this action, with details of the

physical delivery, prevents Plaintiff from establishing its status as holder of the Note.

Therefore Plaintiff has not established its standing to enforce the Subject Loan. U.S.

Bank, Nat. Ass’n. v. Faruque, 120 A.D.3d 575, 577 (2d Dep’t 2014) (affidavit without

factual details of physical delivery of note did not establish possession); see also HSBC

Bank, USA v. Hernandez, 92 A.D.3d 843, 844 (2d Dep’t 2012) (collecting cases).

3. Plaintiff Failed to Establish Compliance with RPAPL §1304 The law is clear that where a foreclosure Plaintiff fails to show it met conditions

precedent to foreclosure, such as compliance with the notice provisions of RPAPL §1304,

summary judgment must be denied. Aurora Loan Services, LLC v. Weisblum, 85 A.D.3d

95 (2d Dep’t 2011). RPAPL §1304 requires a lender to serve a pre-foreclosure notice

upon the borrower of a home loan at least 90 days before commencing an action to

foreclose. The RPAPL §1304 Notice must state the number of days the borrower is in

default on payment and the amount of money needed to cure the default, and provide

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contact information for five housing counseling agencies in the borrower’s area as well as

contact information for the lender or loan servicer.

Plaintiff argues somewhat implausibly that it had no obligation to serve a §1304

Notice because the Subject Loan is not a home loan but that it nevertheless did serve a

§1304 Notice on Ms. Thompson. In fact, the opposite is true on both counts. Ms.

Thompson’s loan is unequivocally a home loan and therefore she was clearly entitled to

receipt of a §1304 Notice (Thompson Aff. ¶¶3-7 and Exhs. 1-3). However, Ms.

Thompson did not receive an RPAPL §1304 Notice at any time prior to the

commencement of this action. Even if the Court credits the RPAPL §1304 Notice that

Plaintiff claims was sent, the Notice is defective on its face for being dated less than

ninety days prior to the commencement of this case.

a. RPAPL§1304 Applies to this Action Because the Subject Loan Is a Home Loan as Defined by RPAPL §1304

As established by Ms. Thompson’s Affidavit and its supporting exhibits, as well

as the exhibits to the Isobe Affirmation, the subject loan is a “home loan” and thus

RPAPL §1304 applies to this action. The borrower Ms. Thompson is a natural person.

The loan was taken primarily for household purposes (refinance of the underlying

mortgage on the Subject Property) (Thompson Aff. ¶¶12). The property to be foreclosed

is a one to four family home occupied by the borrower as her principal residence and the

property is within the state (Thompson Aff. ¶¶3-7 and Exhs. 1-3).

Plaintiff claims but does not substantiate that the subject loan is not a home loan

because Ms. Thompson does not reside in the Subject Property. However, the claim is

made only by Plaintiff’s attorneys and is unsupported by any credible evidence. In fact,

Plaintiff’s own purported evidence contradicts its own claim of Ms. Thompson’s non-

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residence. Specifically, in making its claim that it did serve Ms. Thompson with an

RPAPL §1304 Notice, Plaintiff attaches a notice that is addressed to Ms. Thompson at

the Subject Property. There is no credible explanation for why the RPAPL §1304 Notice

would be served on Ms. Thompson at the Subject Property if Plaintiff (or its

predecessors) truly believed she did not reside there. On the other hand, Ms. Thompson

establishes in her affidavit that she resides in the property, and she supports her

statements with credible evidence. Plaintiff therefore cannot possibly establish that

RPAPL§1304 does not apply in this case.

b. Plaintiff’s Own Submissions Demonstrate its Failure to Comply with RPAPL§1304

Ms. Thompson did not receive Plaintiff’s purported RPAPL §1304 Notice

(Thompson Aff. ¶26; Isobe Aff. Exh. D p. 1). Ms. Scott nevertheless claims in her

affidavit that “Defendant was sent, via certified and first class mail, the requisite 90-Day

Pre-Foreclosure Notice pursuant to RPAPL §1304 …” (Scott Affidavit ¶15). As

described more comprehensively in Section I. B. 1 above, Ms. Scott’s claim is

unsupported and, in fact, unsupportable by her. Her employer, Caliber, took over

servicing of Ms. Thompson’s loan after this notice had allegedly been sent by a different

servicer, and therefore Ms. Scott has no personal knowledge of the mailing of the notice

and no capacity to lay a proper foundation for the admission of testimony based on a

review of business records. Wells Fargo v. Tessler, 50 Misc.3d 1224(A), 2016 WL

818834 at *8 (Sup. Ct Kings Co); Ocwen Loan Servicing, LLC v. Dusenberry, 2016 NY

Slip Op 50252 (U), 2016 WL 1380856 at *3-4 (Sup. Ct Queens Co); Wells Fargo Bank,

N.A. v. Burke, 125 A.D.3d, 765, 767 (2d Dep’t 2015); Bank of New York Mellon v.

Aquino, 131 A.D.3d 1186, 1187-1187 (2d Dep’t 2015); Deutsche Bank Natl. Trust Co. v.

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Spanos, 102 A.D.3d 909, 910-911 (2d Dep’t 2013); See, generally, Aurora Loan

Services, LLC v. Weisblum, 85 A.D.3d 95, 106 (2d Dep’t 2011). Accordingly, Ms.

Thompson’s sworn statements concerning her non-receipt of the RPAPL §1304 Notice

are uncontradicted.

Even assuming that the purported RPAPL §1304 Notice annexed to the Scott

Affidavit was sent, it is defective on its face. The purported notice appears to have been

issued by Ocwen Loan Servicing, LLC (not Caliber), on May 8, 2014 and is addressed to

Ms. Thompson at the Subject Property (Isobe Aff. Exh. H). If Ocwen (or Plainitff)

believed Ms. Thompson resided at the subject property, the proffered notice is facially

defective, since this action was commenced on June 25, 2014, just 48 days after the date

on the notice. RPAPL §1304 (1). In the alternative, if Ocwen did not believe that Ms.

Thompson resided at the Subject Property, the notice is defective because Plaintiff did

not send the notice to whatever other address Plaintiff considered to be Ms. Thompson’s

“last known address.” RPAPL §1304(2), (3). M&T Bank v. Farrell, 2016 NY Slip Op

31010 (U), 2016 WL 3181917 at *6-8 (Sup. Ct Broome Co) (90 day period from sending

of RPAPL §1304 Notice to commencement of foreclosure may be shortened if borrower

no longer occupies premises; RPAPL §1304 Notice must be sent to borrower who no

longer occupies premises at premises and at last known address). Either way, the notice

is defective, and Plaintiff has failed to establish a condition precedent to this action.

4. Plaintiff Failed to Establish Compliance with RPAPL §1306 Plaintiff failed to comply with the pleading and filing requirements which

constitute compliance with RPAPL §1306. Effective February 13, 2010, RPAPL §1306

requires a foreclosing lender to file with the Department of Financial Services certain

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information regarding the borrower and the loan within three business days of mailing a

notice to a borrower under RPAPL §1304 (where such notice is required). RPAPL

§1306(1) provides that any complaint in a proceeding initiated pursuant to Article 13 of

the RPAPL shall contain an affirmative allegation that the plaintiff has complied with

RPAPL §1306 if applicable. Since this case was commenced on June 25, 2014 and

RPAPL §1304 applies, RPAPL §1306 also applies.

Where RPAPL §1306 applies, strict compliance is a condition precedent to

foreclosure. TD Bank, N.A. v Leroy, 121 A.D.3d 1256, 125901260 (3d Dep’t 2014);

JPMorgan Chase Bank, Nat. Ass’n v. Plaskett, 45 Misc.3d 531, 535-536 (Sup. Ct Kings

Co. 2014); Vanderbilt Mtge. & Fin., Inc. v. Davis, 2013 N.Y. Slip Op 32117(U) at *6

(Sup. Ct Suffolk Co). Here, Plaintiff did not plead compliance with RPAPL §1306 in its

Complaint at all, which is in itself fatal to Plaintiff’s motion for summary judgment

(Isobe Aff. Exh. A). U.S. Bank Nat. Ass’n v. Lampley, 46 Misc.3d 630, 634-635 (Sup. Ct

Kings Co 2014) (compliance with RPAPL §1306 must be sworn to with specificity). The

Scott Affidavit likewise failed to allege compliance with RPAPL §1306 (Isobe Aff. Exh.

F). An unidentified, unauthenticated Proof of Filing Statement is appended to the end of

Exhibit F to the Scott Affidavit but is inadequate to establish any facts on summary

judgment just as are the other miscellaneous unauthenticated documents that Plaintiff has

submitted with its motion. Groupex Financial Corporation v. Giromas Trading Corp., 22

Misc.3d 1124(A), 2009 WL 399987 (Sup Ct Kings Co) at *4, citing Higen Assoc. v.

Serge El. Co., 190 A.D.2d 712, 713 (2d Dep’t 1993); Citimortgage, Inc. v. Burshtein, 45

Misc.3d 1226(A), 2014 WL6980568 (Sup Ct Kings Co).

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5. Plaintiff Failed to Establish Compliance with RPAPL §1303

Plaintiff failed to establish that a statutorily compliant version of the required

Home Equity Theft Protection Act (“HETPA”) Notice, known as the RPAPL §1303

Notice, was served on Ms. Thompson. HETPA requires the Plaintiff in a residential

mortgage foreclosure to deliver to the homeowner a statutory-specific notice with the

summons and complaint. RPAPL §1303 (1). In First Nat. Bank of Chicago v. Silver, the

Second Department recited the requirements of RPAPL §1303(2):

The notice required by this section shall be delivered with the summons and complaint to commence a foreclosure action. The notice required by this section shall be in bold, fourteen-point type and shall be printed on colored paper that is other than the color of the summons and complaint, and the title of the notice shall be in bold, twenty-point type. The notice shall be on its own page.

73 A.D.3d 162, 165-166 (emphasis supplied). The Court also held that the foreclosing

bank has the burden of proving compliance with RPAPL § 1303. Id.

Here, Ms. Thompson was never served with her copy of the RPAPL §1303 Notice

(Thompson Aff. ¶23). Plaintiff’s specious affidavit of service of the RPAPL §1303

Notice upon Ms. Thompson was made by a thoroughly discredited process server (Alan

S. Feldman)4 and fails to attach a copy of the purported notice (Isobe Aff. Exh. B). The

Summons and Complaint did not attach a copy of the purported RPAPL §1303 Notice,

and Plaintiff’s motion for summary judgment also omitted a copy of the purported notice

(Isobe Aff. Exh. A; see, generally, Plaintiff’s motion). Thus the record is utterly devoid

of a copy of the purported notice, and there is no evidence that Plaintiff generated and

served Ms. Thompson a notice that complied with the requirements of RPAPL §1303. 4 See Section III. A below for further details concerning the findings of the New York City Department of Consumer Affairs dated February 22, 2016 in its denial of Mr. Feldman’s application to renew his process server license.

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Although RPAPL §1303 does not expressly prescribe the means for establishing

compliance and no appellate court has yet reviewed the issue, the vast majority of trial

courts that have addressed compliance in instances where service of the notice was in

doubt have unsurprisingly required the inclusion of a copy of the purported notice. A

number of lower courts have enunciated the requirement, including several recent

decisions emanating from Kings County:

Here the plaintiff has annexed affidavits of service attesting to service of the summons, complaint and RPAPL 1303 notice on the defendants. However, plaintiff did not annex a copy of the RPAPL 1303 notice that was purportedly sent to the defendants. Accordingly, the plaintiff did not provide a sufficient basis upon which the court may conclude as a matter of law that the plaintiff has complied with the statute.

Chase Home Finance, LLC v. Silver, 47 Misc.3d 1203(A), 2015 WL 1442418 at *4 (Sup.

Ct Kings Co 2015), citing Countrywide Loans v. Taylor, 17 Misc.3d 595 (Sup. Ct Suffolk

Co 2011); Wells Fargo Bank, N.A. v. Sylvester, 2015 WL 1442408 at *3 (Sup. Ct Kings

Co) (same). See, also, First United Mortg. Banking Corp. v. Valdivieso, 45 Misc.3d

1216(A), 2014 WL 5897720 at *3 (Sup. Ct Kings Co); Cit Group/Consumer Finance,

Inc. v. Platt, 33 Misc.3d 1231(A), 2011 WL 6118534 at *4, (Sup Ct Queens Co); Wells

Fargo Bank, N.A. v. Barrett, 33 Misc.3d 1207(A), 2011 WL 4838765 at *3 (Sup. Ct

Queens Co).

C. The Court Should Not Strike Defendant’s Answer or Dismiss Her Counterclaim for Attorney’s Fees

CPLR § 2214(a) requires that a notice of motion specify the relief demanded and

the grounds therefor. Plaintiff’s notice of motion does not request that Ms. Thompson’s

Answer be stricken, and therefore, Plaintiff has not technically demanded this particular

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relief. However, Plaintiff’s proposed order and Attorney Affirmation explicitly mention

the striking of Ms. Thompson’s Answer and certain of her defenses, although Plaintiff

provides no legal authority or factual basis for this Court to grant the extreme relief of

striking Ms. Thompson’s Answer, other than the statements in Plaintiff’s Attorney

Affirmation concluding that each of Ms. Thompson’s individual defenses is “meritless.”

Plaintiff’s request that the Court strike Ms. Thompson’s Answer implies that a

foreclosure defendant’s failure to hand over the keys to her property upon receipt of a

summons and complaint constitutes some form of misconduct. This is a preposterous and

galling proposition and, of course, Plaintiff gives no authority for it. However, to the

extent that Plaintiff may seek to have the Court strike Ms. Thompson’s answer as a

sanction, it is certainly not warranted. Stone v. Zinoukhova, 119 A.D.3d 928, 929-930 (2d

Dep’t 2014) (drastic remedy of striking an answer pursuant to CPLR § 3126 for failure to

comply with discovery demands and orders not appropriate unless conduct is clearly

willful and contumacious); Guiliano v. 666 Old Country Road, LLC, 100 A.D.3d 960,

961 (2d Dep’t 2012) (intentional or negligent spoliation of evidence did not warrant

striking of answer).

Nor should the Court strike Ms. Thompson’s timely asserted counterclaim for

attorney’s fees. Real Property Law § 282 (“RPL § 282”) provides as follows, in relevant

part:

Whenever a covenant contained in a mortgage on residential real property shall provide that in any action or proceeding to foreclose the mortgage that the mortgagee may recover attorneys' fees and/or expenses incurred as the result of the failure of the mortgagor to perform any covenant or agreement contained in such mortgage, or that amounts paid by the mortgagee therefor shall be paid by the mortgagor as additional payment, there shall be

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implied in such mortgage a covenant by the mortgagee to pay to the mortgagor the reasonable attorneys' fees and/or expenses incurred by the mortgagor as the result of the failure of the mortgagee to perform any covenant or agreement on its part to be performed under the mortgage or in the successful defense of any action or proceeding commenced by the mortgagee against the mortgagor arising out of the contract . . . .

RPL § 282(1) (emphasis supplied). The Mortgage provides, at Section 9:

If (a) I do not keep my promises and agreements made in this Security Instrument … then Lender may do and pay for whatever is reasonable and appropriate to protect Lender’s interest in the Property and Lender’s rights under this Security Instrument. Lender’s actions may include, but are not limited to: … (d) appearing in court; and (e) paying reasonable attorneys’ fees to protect its interest in the Property and/or rights under this Security Instrument … I will pay to Lender any amounts, with interest, which Lender spends under this Section 9.

(Thompson Aff. Exh. 4 p. 7, ¶9). Section 9 of the mortgage includes a covenant for Ms.

Thompson to pay attorney’s fees incurred by her purported lender in this action. Ms.

Thompson has retained counsel to represent her in this action. Thus Ms. Thompson has

met all the conditions required by RPL §282 and is subject only to the Court’s ultimate

decision as to whether she has mounted a successful defense. Even if the Court does not

grant Ms. Thompson summary judgment dismissing the action on her cross-motion, it is

nonetheless premature to strike her counterclaim for attorney’s fees until the action is

disposed.

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II. The Court Should Grant Summary Judgment to Defendant and Dismiss This Action

A. Defendant Has Established That RPAPL§1304 Applies and that

Plaintiff Failed to Comply with RPAPL §1304 Ms. Thompson has established, as a matter of law, that she lives at the Subject

Property as her primary residence, and that the Subject Loan is in fact a ‘home loan” as

defined by RPAPL §1304 (Thompson Aff. ¶¶3-8 and Exhs. 1-3; Isobe Aff. Exhs. D, F, J,

K). Plaintiff’s only evidence submitted concerning this fact are two affidavits of service

by Plaintiff’s process server, Alan S. Feldman. The first affidavit alleges service of the

Summons and Complaint on Ms. Thompson by delivery to a person who allegedly

identified herself as Ms. Thompson’s daughter, Kisha Thompson, at the Amboy Street

Property (Isobe Aff. Exh. B). This affidavit alleges, in boilerplate fashion, “[t]hat person

was also asked by deponent whether said premises was the defendant’s dwelling

place/usual place of abode and the reply was affirmative.” (Isobe Aff. Exh. B). This

statement is hearsay and thus it is not probative on the issue of Ms. Thompson’s primary

residence.

Plaintiff submits two additional hearsay affidavits by Mr. Feldman concerning

statements allegedly made by un-named individuals when Mr. Feldman attempted

delivery of a Debt Validation letter at Amboy Street and at the Subject Property (Isobe

Aff. Exh. B). The statements in these affidavits, dated April 22, 2014 and May 23, 2014,

but not filed until March 7, 2016, not only lack probity, they are inadmissible. In any

event, Ms. Thompson testifies that the Amboy Street Property has been vacant for several

years and that no person matching the description of the person Mr. Feldman supposedly

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spoke to when he allegedly attempted delivery of the Debt Validation Letter resides at the

Subject Property (Thompson Aff. ¶¶6-8; Isobe Aff. Exh. B).

Ms. Thompson’s detailed affidavit and supporting documents establish that her

primary residence is the Subject Property (Thompson Aff. ¶¶3-8 and Exhs. 1-3; Isobe

Aff. Exhs. D, F, J, K). Further, Kisha Thompson testifies that she lives at the Subject

Property and not at the Amboy Street Property and she denies ever receiving any

foreclosure papers from, or conversing with, process server Alan S. Feldman or indeed

any other process server (Affidavit of Kisha Thompson, dated June 28, 2016 (“Kisha

Thompson Aff.”) ¶¶3-7). In addition, Mr. Feldman’s physical description of Kisha

Thompson underestimates her weight by 75 pounds (Isobe Aff. Exh. B; Kisha Thompson

Aff. ¶¶8-9).

Moreover, the process server, Alan S. Feldman, has exhibited a pattern and

practice of swearing to false affidavits and misleading the courts. Therefore his

unsupported testimony is incredible as a matter of law, or, at a minimum, insufficiently

credible to contradict the sworn testimony of Ms. Thompson and her daughter Kisha

Thompson. Based on at least 25 instances of “sewer service” by Mr. Feldman

documented by multiple courts over an extended period of time, on February 22, 2016,

the New York City Department of Consumer Affairs rejected Mr. Feldman’s application

to renew his process server license, determining that he is “not fit to be licensed, pursuant

to New York City Administrative Code (“Code”) §20-101 due to [his] failure to maintain

standards of integrity, honesty and fair dealing …” (Isobe Aff. Exh. N, New York City

Department of Consumer Affairs Denial of Application No. 167-2016-RPSI5 (redacted)).

5 Obtained via the online records of the New York City Department of Consumer Affairs at: http://www1.nyc.gov/assets/dca/downloads/pdf/businesses/DenialLetter-Alan-Feldman.pdf

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Defendant respectfully requests that the Court take judicial notice of the records of the

New York City Department of Consumer Affairs. See, Headley v. New York City Transit

Authority, 100 A.D.3d 700, 701 (2d Dep’t 2012).

Mr. Feldman’s repeated false testimony, for profit, is ample reason for this Court

to refuse to credit or believe his testimony in this case. Washington Mutual Bank v. Holt,

113 A.D.3d 755, 756-757 (2d Dep’t 2014). Under the maxim of falsus in uno, falsus in

omnibus and in these particular circumstances, the Court should afford Plaintiff’s

affidavits of service by Alan S. Feldman no credit whatsoever and certainly not sufficient

credit to create an issue of fact.

B. Defendant Has Established That RPAPL§1306 Applies and that Plaintiff Failed to Comply with RPAPL §1306

Because Ms. Thompson has established RPAPL §1304 applies in this action, i.e.,

that Plaintiff was required to send her a 90-day pre-foreclosure notice, the pleading and

filing requirements of RPAPL §1306, which are a condition precedent to this action, also

apply. RPAPL §1306(1). Plaintiff failed to plead or allege compliance with RPAPL

§1306 or to submit any admissible evidence of purported compliance with the statute

(Isobe Aff. Exhs. A, F) and accordingly this action must be dismissed. TD Bank, N.A. v

Leroy, 121 A.D.3d 1256, 1259-1260 (3d Dep’t 2014) (complaint dismissed where

Plaintiff admitted it did not strictly comply with RPAPL §1306).

III. The Court Should Order a Hearing to Determine Interest Tolling Under CPLR § 3012-b and Attorney’s Fees Under RPL §282

CPLR §3012-b requires the plaintiff, in any residential foreclosure involving a

home loan as defined in RPAPL §1304, to file with the complaint an affidavit:

signed by the attorney for the plaintiff, certifying that the attorney has reviewed the facts of the case and that, based

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on consultation with representatives of the plaintiff identified in the certificate and the attorney's review of pertinent documents, including the mortgage, security agreement and note or bond underlying the mortgage executed by defendant and all instruments of assignment, if any, and any other instrument of indebtedness including any modification, extension, and consolidation, to the best of such attorney's knowledge, information and belief there is a reasonable basis for the commencement of such action and that the plaintiff is currently the creditor entitled to enforce rights under such documents.

CPLR §3012-b(a). Here Plaintiff, in contending that the Subject Loan is not a home loan,

has admittedly failed to submit an affirmation as required by CPLR §3012-b.

CPLR §3012-b provides that if a plaintiff “wilfully fails to provide copies of the

papers and document as required by Subdivision (a)” and the court finds that such

documents “ought to have been provided” the court may deny “the accrual of any

interest, costs, attorneys’ fees or other fees, relating to the mortgage debt” CPLR §3012-

b(e). Since Defendant has established the Subject Loan is a home loan, Plaintiff should

have filed a CPLR §3012-b affidavit with the Complaint, which Plaintiff has admittedly

and willfully failed to do. Accordingly, Ms. Thompson requests that the Court order a

hearing, on notice to the parties, at which the Court may determine the amount of interest

and other fees to be tolled on the Subject Mortgage on account of Plaintiff’s willful

failure to comply with CPLR §3012(b).

Because RPL §282 applies in this action and Ms. Thompson asserted a

counterclaim under that statute, Ms. Thompson likewise requests a hearing to determine

the amount of attorney’s fees to be awarded to Brooklyn Legal Services in its successful

defense of this action.

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CONCLUSION

Wherefore, for all the foregoing reasons, the Court should deny Plaintiff’s motion

for summary judgment, grant Ms. Thompson’s motion for summary judgment dismissing

this action, order a hearing to determine whether and in what amount to toll interest

pursuant to CPLR §§3012-b and to determine the amount of attorney’s fees payable to

Ms. Thompson’s attorneys Brooklyn Legal Services on this motion under to RPL §282

and award Ms. Thompson such other and further relief as the Court deems just and

proper.

Dated: Brooklyn, New York June 30, 2016

Brooklyn Legal Services

/s/ ______________________________ Catherine P. Isobe 1360 Fulton Street, Suite 301 Brooklyn, New York 11216 (718) 233-6434 [email protected] Attorneys for Defendant Brenda V. Thompson

To: Samantha Sandler, Esq. RAS Boriskin, LLC 900 Merchants Concourse Westbury, NY 11590 Attorneys for Plaintiff (By NYSCEF)

69

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS: FORECLOSURE RESOLUTION PART 1 ----------------------------------------------------------------------------X BANK OF AMERICA, NATIONAL ASSOCIATION,

Plaintiff,

-against-

BRENDA V. THOMPSON; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; LENOX HILL MEDICAL ANESTHESIOLOGY; MUNICIPAL CREDIT UNION; CONSOLIDATED DEVELOPMENT OF CANARSIE; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; EMPIRE PORTFOLIOS INC, “JOHN DOE #1” through “JOHN DOE #12,” the last twelve names being fictitious and unknown to the plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in the complaint,

Defendants.

----------------------------------------------------------------------------X

Index No. 505850/2014 Hon. Noach Dear

DEFENDANT’S REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF HER CROSS-MOTION FOR SUMMARY JUDGMENT DISMISSING THE COMPLAINT AND IN FURTHER OPPOSITION TO PLAINTIFF’S MOTION

FOR SUMMARY JUDGMENT

BROOKLYN LEGAL SERVICES

Catherine P. Isobe, Of Counsel 1360 Fulton Street, Suite 301 Brooklyn, New York 11216

(718) 233-6434 (voice) (718) 398-6414 (fax)

Attorneys for Defendant Brenda V. Thompson

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TABLE OF CONTENTS PRELIMINARY STATEMENT .....................................................................................................1 ARGUMENT ...................................................................................................................................1 I. Plaintiff’s Opposition and Reply Mischaracterizes Ms. Thompson’s

Grounds for Summary Judgment and Repeatedly Misstates the Record .............................1

A. Ms. Thompson’s Motion for Summary Judgment Is Not a Pre-Answer Motion to Dismiss .........................................................................................1

B. Plaintiff’s Opposition to the Cross-Motion Misstates the Record and

Mischaracterizes Ms. Thompson’s Grounds for summary Judgment ........................2

II. Ms. Thompson Has Established that RPAPL §1304 Applies and that Plaintiff Failed To Strictly Comply with RPAPL §1304 .....................................................5

A. Ms. Thompson’s Loan Is a “Home Loan” Under RPAPL §1304...............................5

B. Plaintiff Failed To Raise a Triable Issue of Fact Concerning Ms.

Thompson’s Place of Residence .................................................................................7

C. Plaintiff’s Purported RPAPL §1304 Notice Is Deficient as a Matter of Law .........................................................................................................................9

III. Ms. Thompson Has Established that RPAPL §1306 Applies and that Plaintiff Failed To Strictly Comply with RPAPL §1306 ...................................................10

IV. Plaintiff’s New Evidence in Support of Its Summary Judgment Motion

Submitted for the First Time on Reply Is Inadmissible and Should Not Be Considered by the Court ....................................................................................................11

CONCLUSION .............................................................................................................................. 12

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PRELIMINARY STATEMENT

Defendant Brenda V. Thompson (“Defendant” or “Ms. Thompson”) respectfully

submits this memorandum in further support of her cross-motion for summary judgment

dismissing this action and in further opposition to Plaintiff’s motion for summary

judgment. The Court should grant Ms. Thompson’s cross-motion for summary judgment

and dismiss this action because Ms. Thompson has established as a matter of law that

Plaintiff did not strictly comply with RPAPL §§1304 or 1306, both which are conditions

precedent to the maintenance of this action. Plaintiff failed to raise a triable issue of fact

concerning its compliance with these statutes. In addition, Plaintiff’s summary judgment

motion must be denied, notwithstanding the new evidence Plaintiff submitted on reply.

ARGUMENT

I. Plaintiff’s Opposition and Reply Mischaracterizes Ms. Thompson’s Grounds for Summary Judgment and Repeatedly Misstates the Record

A. Ms. Thompson’s Motion for Summary Judgment Is Not a Pre-Answer Motion to Dismiss Plaintiff’s Attorney Affirmation in Opposition to Defendants’ (sic) Cross-Motion

and in Further Support of Plaintiff’s Motion, dated August 9, 2016 (“Plaintiff’s

Opposition and Reply”) includes a section entitled “Standard of Law for Dismissal” at

pages six through seven. This section recites the standard for a pre-answer motion to

dismiss under CPLR §3211, but does not specifically mention Ms. Thompson’s cross-

motion.

To the extent that Plaintiff argues Ms. Thompson’s cross-motion for summary

judgment is subject to the standard on a pre-answer motion to dismiss, i.e., that she was

required to move within her time to respond to the complaint and that all facts alleged in

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the complaint must be presumed true, this argument fails. Ms. Thompson’s motion for

summary judgment is subject to the applicable standard under CPLR §3212 and the

relevant case law. A party seeking summary judgment must demonstrate that “the cause

of action or defense shall be established sufficiently to warrant the court as a matter of

law in directing judgment” in the movant’s favor. CPLR §3212(b).

“The proponent of a summary judgment motion must make a prima facie

showing of entitlement to judgment as a matter of law, tendering sufficient evidence to

demonstrate the absence of any material issues of fact.” Alvarez v. Prospect Hosp., 68

N.Y.2d 320, 324 (1986). If the moving party meets this burden, the burden then shifts to

the non-moving party to “establish the existence of material issues of fact which require a

trial of the action.” Vega v Restani Constr. Corp., 18 N.Y.3d 499, 503 (2012). The non-

movant must tender admissible evidence of these material issues of disputed fact, but may

be excused from the strict requirements of admissibility if an acceptable excuse is given.

Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980).

Ms. Thompson has established the merit of her affirmative defenses as a matter of

law under RPAPL §1304 and 1306. Thus the burden has shifted to Plaintiff to establish

the existence of material issues of disputed fact. Plaintiff has not met its burden and the

Court should accordingly award summary judgment to Ms. Thompson.

B. Plaintiff’s Opposition and Reply Repeatedly Misstates the Record

Plaintiff’s Opposition and Reply is replete with inaccurate characterizations of the

record before the Court, most of which pertain to statements and admissions Plaintiff

attributes to Ms. Thompson but which she never made. Not surprisingly, Plaintiff fails to

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cite to any specific pages or paragraphs in support of these contentions because the

alleged statements do not exist.

Plaintiff’s first misstatement of the record occurs at paragraph 65 of Plaintiff’s

Opposition and Reply, in which counsel affirms, under penalty of perjury, “Defendant’s

affidavit alleges that she was not properly served in that she did not reside at the property

were (sic) service was effectuated pursuant to CPLR 308(2).” In fact, Ms. Thompson

alleges no such thing. As stated in her affidavit, Ms. Thompson received a copy of the

summons and complaint from her daughter Nikki Thompson, to whom it had been

delivered at 722A Logan Street, Brooklyn, NY (Ms. Thompson’s home and the subject of

this action) by Plaintiff’s process server (see Affidavit of Brenda V. Thompson, dated

June 28, 2016 (“Thompson Affidavit”) at ¶21, annexed to Ms. Thompson’s cross-

motion). Having received the summons and complaint in time to defend the action, Ms.

Thompson elected not to dispute personal jurisdiction in her answer (Verified Answer of

Brenda V. Thompson dated August 14, 2014 (Thompson Answer”) Exh. C to cross-

motion). Nor does she dispute service of process in opposition to Plaintiff’s motion or in

support of her cross-motion (see, generally, Thompson Affidavit).

After falsely alleging that Ms. Thompson disputed personal jurisdiction, Plaintiff

points out with great emphasis that this (fictional) defense was asserted too late

(Plaintiff’s Opposition and Reply ¶¶66-68). Plaintiff next conflates a legal waiver of a

defense with a factual admission by Ms. Thompson that she does not reside at 722A

Logan Street (Plaintiff’s Opposition and Reply ¶¶69-70). Ms. Thompson made no such

admission. She explicitly swore to her place of residence in her answer and her affidavit

in support of the cross-motion. Ms. Thompson corroborated these assertions with

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documentary evidence of her residence at 722A Logan Street (Thompson Answer;

Thompson Affidavit ¶¶3-7 and Exhs. 1-3).

Next, in an attempt to attack Ms. Thompson’s credibility, Plaintiff’s counsel

falsely alleges, “While Defendant claims that she does not reside at the address where

service was effectuated, Defendant wholly fails to explain how she obtained the

Summons and Complaint, consulted with counsel and executed an Answer to Plaintiff’s

Complaint and interposed Counterclaims all within one (1) month of being served.”

(Plaintiff’s Opposition and Reply ¶81). In fact, Ms. Thompson did explain in her

affidavit that she got the summons and complaint from her daughter Nikki after a process

server delivered a copy to Nikki at Ms. Thompson’s home (Thompson Affidavit ¶21).

Plaintiff’s own affidavits of service state that copies of the summons and

complaint were delivered to Nikki Thompson at Ms. Thompson’s home before other

copies were purportedly delivered to Ms. Thompson’s other property at 150 Amboy

Street (“Amboy Street Property”) (Exh. G to Plaintiff’s Motion). Plaintiff studiously

ignores its own submissions in an attempt to convince the Court that Ms. Thompson

could only have received those copies of the summons and complaint allegedly delivered

to the Amboy Street Property. Plaintiff implies that Ms. Thompson’s timely response to

the complaint was improbable (Plaintiff’s Opposition and Reply ¶81). But there is

nothing miraculous about Ms. Thompson receiving a copy of foreclosure papers which

were delivered to her home. The fact that Ms. Thompson promptly sought and received

legal assistance with her pro-se answer is likewise no superhuman feat.

Lastly, Plaintiff’s counsel falsely alleges that “[w]hen served with Plaintiff’s Debt

Validation letter at 150 Amboy Street, Brooklyn, NY 11212 on May 23, 2014, Defendant

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confirmed that she resided at the referenced address.” (Plaintiff’s Opposition and Reply

¶87) (emphasis supplied). In yet another misstatement of the record, Plaintiff

conveniently ignores that its process server does not allege that he spoke with or gave any

papers to Brenda V. Thompson, he merely alleges he delivered a “Debt Validation Letter

to a “Mrs. Thompson” who did not identify her relationship to Brenda V. Thompson.

(Exh. J to Plaintiff’s Motion). This Court should not countenance these material

misrepresentations by counsel of the contents of papers submitted on Plaintiff’s motion

and Defendant’s cross-motion.

II. Ms. Thompson Has Established That RPAPL§1304 Applies and that Plaintiff Failed to Strictly Comply with RPAPL §1304

Ms. Thompson has established, as a matter of law, that RPAPL §1304 applies in

this case and that Plaintiff was therefore required to provide a statutorily compliant notice

including a list of approved housing counseling agencies at least 90 days before

commencing this action. In response, Plaintiff has failed to raise a triable issue of fact

and this action must therefore be dismissed.

A. Ms. Thompson’s Loan Is A “Home Loan” Under RPAPL §1304

RPAPL §1304(5)(a) defines a home loan requiring the provision of an RPAPL

§1304 Notice as one in which the real estate is “used or occupied, or intended to be used

or occupied wholly or partly, as the home or residence of one or more persons and which

is or will be occupied by the borrower as the borrower’s principal dwelling.” The statute

is not limited borrowers who occupy their property at commencement of foreclosure:

Had the Legislature intended that plaintiffs need not comply with RPAPL §1304 if the borrower did not currently reside at the subject premises, it would not have instructed, inter alia, that the notice be sent to the “last known address of the borrower” (RPAPL § 1304 [2]), or

76

http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000130&cite=NYRAS1304&originatingDoc=I69945a408ad711e595f799cc3c3ba45b&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.UserEnteredCitation)

http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000130&cite=NYRAS1304&originatingDoc=I69945a408ad711e595f799cc3c3ba45b&refType=SP&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.UserEnteredCitation)#co_pp_57e60000f6d46

6

that the 90-day waiting period before commencing a foreclosure action would not apply or would cease to apply if the borrower no longer occupied the premises as his or her principal dwelling (RPAPL § 1304 [3]).

Wells Fargo Bank, N.A. v. Banks, 2015 WL7070063 at *2 (Sup. Ct. Qns. Cty.) (citation

omitted). C.f. M & T Bank v. Farrell, 2016 WL3181917 at *4 (Sup. Ct. Broome Cty.);

Onewest Bank, FSB v. Greenhut, 36 Misc.3d 1205(a) (Sup. Ct. West. Cty. 2012).

Further, a plaintiff’s or its process server’s conclusions about a borrower’s place of

residence cannot serve to establish that a loan is not a home loan:

The Court, likewise, will not rely on conclusory statements by the plaintiff or plaintiff's process server that the homeowner defendant does not reside at the subject premises and, therefore, is not entitled to a settlement conference. Pursuant to RPAPL §1304(5)(b)(iv), the definition of a particular “home loan” that may qualify for a mandatory settlement conference, includes one in which the premises “is or will be occupied by the borrower as the borrower's principal dwelling” (emphasis supplied). Therefore, a mere statement from a process server or plaintiff's counsel that states, for example, that the defendant resides or was served with process at an address other than the mortgaged premises, is not dispositive on the residency issue…

Butler Capital Corporation v. Cannistra, 26 Misc.3d 598, 604-605 (Sup. Ct. Suff. Cty.

2009) (additional emphasis supplied). Thus Plaintiff’s assertion that, “the subject loan is

not a home loan, as defined by RPAPL §1304, as the Defendant does not reside at the

Subject Premises” (Plaintiff’s Opposition and Reply ¶86) is not only factually incorrect

(because Ms. Thompson does reside at the “Subject Premises”), it is legally incorrect as

well. Plaintiff’s false allegation that Ms. Thompson did not reside in her home when this

action began, even if true, is no excuse for Plaintiff to skirt its obligation to strictly

comply with RPAPL §1304.

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https://1.next.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000130&cite=NYRAS1304&originatingDoc=I52b96cbdd44111dea82ab9f4ee295c21&refType=LQ&originationContext=document&transitionType=DocumentItem&contextData=(sc.DocLink)

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B. Plaintiff Failed to Raise a Triable Issue of Fact Concerning Ms. Thompson’s Place of Residence

In support of her cross-motion, Ms. Thompson has established, as a matter of law,

that she lives in her home at 722A Logan Street, Brooklyn New York and that this loan is

in fact a “home loan” as defined by RPAPL §1304. Ms. Thompson has submitted

admissible and uncontroverted evidence of her residence at 722A Logan Street through

her sworn testimony, corroborated with documentary evidence of her home address.

(Thompson Affidavit ¶¶3-8 and Exhs. 1-3). Ms. Thompson also submitted the affidavit

of her daughter Kisha Thompson, who specifically and emphatically denied making the

statements attributed to her in a boilerplate affidavit of service (Affidavit of Kisha

Thompson, dated June 28, 2016 (“Kisha Thompson Affidavit”)).1

Plaintiff’s only “evidence” to support its contention that Ms. Thompson does not

reside at 722A Logan Street is a series of hearsay statements within boilerplate affidavits

of service by Plaintiff’s discredited process server, Alan S. Feldman2 (“Feldman”), in

which he was allegedly advised by others that Ms. Thompson does not live at 722A

Logan Street. (Exhs. G, J to Plaintiff’s Motion). It is well settled that “[t]he proponent of

hearsay evidence must establish the applicability of a hearsay rule exception.” Tyrrell v.

Wal-Mart Stores, Inc., 97 N.Y.2d 650, 652 (2001) (internal citation omitted). Even under

an exception to the hearsay rule, the proponent of a hearsay statement must establish its

reliability. Nucci ex. rel. Nucci v. Proper, 95 N.Y.2d 597, 602 (2001). Hearsay 1 The veracity of Feldman’s affidavit of service is further undermined by the fact that his physical description of Kisha Thompson underestimates her weight by 75 pounds (Kisha Thompson Affidavit ¶¶8-9 and Exh. G to Plaintiff’s Motion). 2 Based on at least 25 instances of “sewer service” by Mr. Feldman over an extended period of time, on February 22, 2016, the New York City Department of Consumer Affairs (“DCA”) rejected Mr. Feldman’s application to renew his process server license, determining that he is “not fit to be licensed, pursuant to New York City Administrative Code (“Code”) §20-101 due to [his] failure to maintain standards of integrity, honesty and fair dealing …” (Isobe Aff. Exh. N). Available at DCA website at: http://www1.nyc.gov/assets/dca/downloads/pdf/businesses/DenialLetter-Alan-Feldman.pdf.

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statements where the speaker is not even identified, such as Feldman’s allegations that

unnamed “family members” told him that Ms. Thompson does not reside in her home, are

inherently unreliable. Country-Wide Insurance Company v. Henderson, 50 A.D.3d 789,

790 (2d Dep’t 2008) (affidavit describing unidentified investigators’ efforts to locate

insured were inadmissible to establish such efforts).

By themselves, Feldman’s hearsay affidavits cannot contradict Ms. Thompson’s

testimony as to her residence and Kisha Thompson’s detailed affidavit denying the truth

of the statements Feldman attributes to her (Thompson Affidavit ¶¶3-8 and Exhs. 1-3;

Kisha Thompson Affidavit ¶¶4-7). Wynne v. Diaz, 102 A.D.3d 862, 864 (2d Dep’t 2013)

(hearsay accident report alone was ineffective to contradict defendant’s testimony and

thus no triable issue of fact existed to prevent summary judgment dismissing the

complaint). Based on Plaintiff’s utter failure to even attempt to bring Feldman’s hearsay

statements under any exception to the hearsay rule, combined with Feldman’s established

propensity to lie under oath, the Court should disregard Plaintiff’s unsupported

contention that Ms. Thompson does not reside in her home (Plaintiff’s Opposition and

Reply ¶¶71, 86-87).

Plaintiff also misconstrues RPAPL §1304’s requirements concerning where the

RPAPL §1304 Notice must be sent. (Plaintiff’s Opposition and Reply ¶94). In fact,

RPAPL §1304(2) states:

Such notice shall be sent by such lender, assignee or mortgage loan servicer to the borrower, by registered or certified mail and also by first-class mail to the last known address of the borrower, and if different, to the residence that is the subject of the mortgage.

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(emphasis supplied). As construed by the courts, this means that if a borrower no longer

resides at the mortgaged premises, the lender must send an RPAPL §1304 Notice to the

mortgaged premises and the borrower’s last known address. Only then may the lender

may shorten the 90 day waiting period. 2016 WL3181917 at *4; 2015 WL7070063 at *2.

Assuming the truth of the allegations in Feldman’s May 28, 2014 affidavits of

service of the Debt Validation Letter, Plaintiff would have been put on notice that Ms.

Thompson no longer resided at 722A Logan Street and thus is would have become

incumbent upon Plaintiff to serve an RPAPL §1304 Notice where Plaintiff then “knew”

Ms. Thompson to reside—150 Amboy Street (Exh. J to Plaintiff’s Motion). Admittedly

Plaintiff did not serve any RPAPL §1304 Notice to 150 Amboy Street and thus Plaintiff

did not strictly comply with RPAPL §1304 (Plaintiff’s Opposition and Reply pp. 3-4, 16-

19).

C. Plaintiff’s Purported RPAPL §1304 Notice is Deficient as a Matter of Law

Assuming for the sake of argument that Plaintiff sent its purported RPAPL §1304

Notice to Ms. Thompson at the mortgaged premises on May 8, 2014, the notice itself is

deficient because this action was commenced on June 25, 2014, just 48 days after the

date of the notice, instead of the 90 day required by the statute. RPAPL §1304 (1).

(Exhs. D, F to Plaintiff’s Motion). In opposition to Ms. Thompson’s cross-motion,

Plaintiff fails to rebut her argument that this action was commenced too soon after the

purported mailing of the RPAPL §1304 Notice. (Plaintiff’s Opposition and Reply pp. 3-4,

16-19). C.f. Hudson City Savings Bank v. DePasquale, 113 A.D.3d 595, 596 (2d Dep’t

2014) (where plaintiff submitted RPAPL §1304 Notice with a factual inaccuracy,

plaintiff’s failure to show, prima facie, strict compliance with RPAPL §1304 became

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defendant’s prima facie showing of entitlement to summary judgment dismissing

complaint). Because Plaintiff’s RPAPL §1304 Notice was admittedly served less than 90

days before this action was commenced, the Court should grant Ms. Thompson’s cross-

motion for summary judgment.

III. Ms. Thompson Has Established That RPAPL§1306 Applies and that Plaintiff Failed to Strictly Comply with RPAPL §1306

In opposition to Ms. Thompson’s cross-motion for summary judgment, Plaintiff

contends that “merely alleging compliance with RPAPL §1306 is sufficient to satisfy the

requirements of RPAPL §1306 as it pertains to the commencement of a Foreclosure

Action.” (Plaintiff’s Opposition and Reply ¶105). This argument ignores both the extant

case law interpreting the pleading requirement in RPAPL §1306 and the generally

applicable pleading requirements codified at CPLR §3013. U.S. Bank, National

Association v. Lampley, 46 Misc.3d 630, 634-635 (Sup. Ct. Kings Cty. 2014) (conclusory

statement of compliance with RPAPL §1306 in compliant was insufficient because it did

not allege any facts concerning such compliance); Greschler v. Greschler, 71 A.D.2d

322, 325 (2d Dep’t 1979) (“a complaint is not acceptable if it is drawn as though it had

been copied verbatim form a standard form book.”).

Plaintiff also contends, without any supporting authority, that Defendant, “is not

an intended beneficiary of the statute” and that, “Defendants (sic) do not have standing to

challenge Plaintiff’s compliance therewith.” (Plaintiff’s Opposition and Reply ¶112).

Nothing could be further from the truth about the purpose of RPAPL §1306. In fact, The

Foreclosure Prevention and Responsible Lending Act, Laws of New York, 2008, Chapter

472 of 2008, which instituted broad reforms to address the foreclosure crisis and other

laws governing foreclosure actions on home loans were amended by the Laws of New

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York, 2009, Chapter 507, of which RPAPL §1306 was a part. The Senate’s statement in

support explains the bill’s purpose:

This bill would build upon the reforms enacted in the 2008 legislation. In particular, this bill would: (1) allow a larger population of distressed homeowners to benefit from consumer protection laws and foreclosure prevention opportunities currently available only to borrowers of “high-cost,” “sub-prime,” and “non-traditional” home loans: (2) establish certain requirements for plaintiffs in foreclosure actions to maintain the foreclosed property; (3) establish protections for tenants residing in foreclosed properties; and (4) enhance consumer protection provisions to prevent distressed homeowners from falling prey to rescue scams.

N.Y. State S., Memo. In Support of Legis., S. 66007, 2009 Leg., 20th Extraordinary Sess.

(2009). The court should give no credence to Plaintiff’s disingenuous characterization of

this remedial legislation. It was explicitly intended to benefit homeowners like Ms.

Thompson.

IV. Plaintiff’s New Evidence in Support of Its Summary Judgment Motion Submitted for the First Time on Reply Is Inadmissible and Should Not Be Considered by the Court

On reply, Plaintiff submitted a new piece of evidence, a documents entitled

“Bailee Letter Agreement” attached to Plaintiff’s Opposition and Reply under Exhibit tab

L. (“Bailee Letter”). Plaintiff’s current counsel alleges (without providing an exhibit

letter) that the Bailee Letter “evidences that prior counsel for Plaintiff was physically

holding the Note in its possession as bailee for Plaintiff just prior to commencement of

the action.” (Plaintiff’s Opposition and Reply ¶47). The Bailee Letter was purportedly

issued by Bank of America, N.A. and signed to indicate receipt by a clerk at “Frenkle

(sic) Lambert Weiss LLP” a law firm which has not appeared in this action. Plaintiff has

set forth no basis for the admissibility of the Bailee Letter, which is covered by the

hearsay rule. CPLR §4518(a). C.f. Toth v. Carver Street Associates, 191 A.D2d 631, (2d

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Dep’t 1993) (letters from plaintiff’s attorney constituted inadmissible hearsay); Matter of

Rathbone, 111 A.D.2d 335, (2d Dep’t 1985) (letters from executors of decedent’s estate

admitted into evidence as business records under exception to hearsay rule).

Even if the Bailee Agreement Letter were somehow admissible, the Court should

still decline to consider it as part of Plaintiff’s prima facie case for summary judgment

because it violates the general proscription against the inclusion of such new evidence on

reply. Arriola v. City of New York, 128 A.D.3d 747, 749 (2d Dep’t 2015); Eleventh

Avenue Realty, LLC v. 6014 AH, LLC, 114 A.D.3d 661, 662 (2d Dep’t 2014). The Court

should therefore disregard the document and any contentions pertaining to it.

CONCLUSION


for summary judgment, grant Ms. Thompson’s cross-motion for summary judgment and

award Ms. Thompson such other and further relief as the Court deems just and proper.

Dated: Brooklyn, New York September 19, 2016


/s/ ______________________________ Catherine P. Isobe 1360 Fulton Street, Suite 301 Brooklyn, New York 11216 (718) 233-6434 [email protected] Attorneys for Defendant Brenda V. Thompson

To: Samantha Sandler, Esq. Jason Creech, Esq. RAS Boriskin, LLC 900 Merchants Concourse Westbury, NY 11590 Attorneys for Plaintiff (By NYSCEF)

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FILED: KINGS COUNTY CLERK 01/12/2017 INDEX NO. 505850/2014

NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/17/2017

1 of 284

2 of 285

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS: FRP1 ------------------------------------------------------------------------X U.S. BANK, NATIONAL ASSOCIATION, AS SUCCESSOR TRUSTEE TO BANK OF AMERICA, N.A. AS SUCCESSOR TRUSTEE TO LASALLE Index No. 507500/2013 BANK, N.A., AS TRUSTEE FOR THE FIRST FRANKLIN MORTGAGE LOAN TRUST, MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-H1, Hon. Noach Dear

Plaintiff, -vs-

MERLENE CRICK; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY PARKING VIOLATIONS BUREAU; NEW YORK CITY TRANSIT ADJUDICATION BUREAU; and “JOHN DOE” and “MARY DOE,” (Said names being fictitious, it being the intention of Plaintiff to designate any and all occupants, tenants, persons or corporations, if any, having or claiming an interest in, or lien upon, the premises being foreclosed herein), Defendant(s). --------------------------------------------------------------------------X

DEFENDANT MERLENE CRICK’S MEMORANDUM OF LAW IN OPPOSITION TO

PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

BROOKLYN LEGAL SERVICES Catherine P. Isobe, Of Counsel

1360 Fulton Street, Suite 301 Brooklyn, New York 11216

(718) 636-1155 (voice) (718) 398-6414 (fax)

Attorneys for Defendant Merlene Crick

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TABLE OF CONTENTS PRELIMINARY STATEMENT .....................................................................................................1 STATEMENT OF FACTS .......................................................................................................... 1-5 ARGUMENT ............................................................................................................................. 5-25

I. Summary Judgment Standard ................................................................................................5

II. Plaintiff Failed to Establish the Elements of Its Case ..................................................... 6-18

A. Plaintiff’s Affidavit in Support of Its Motion Is by an Individual Without Personal Knowledge of the Facts Alleged or Competency To Testify Based on a Review of Business Records ....................................................................................................... 6-9

B. Summary Judgment Should Be Denied Because Plaintiff Failed to Establish Strict Compliance with RPAPL §§1304 and 1303 ............................................................ 9-13 1. Plaintiff Failed to Establish Strict Compliance with RPAPL § 1304 ................ 9-11

2. Plaintiff Failed to Establish Strict Compliance with RPAPL § 1303 .............. 11-13

C. Plaintiff Has Not Established Standing to Foreclose ............................................ 13-18

1. Plaintiff Failed Allege Possession of the Note at Commencement ................. 14-16

2. Plaintiff Failed to Establish It Held the Note and Mortgage at Commencement by

Virtue of Written Assignment .......................................................................... 17-18

III. Plaintiff Failed to Establish a Basis on which the Court Could Strike Ms. Crick’s Amended Answer and Counterclaims ................................................................... 18-25

A. Plaintiff’s Notice of Motion Is Defective .............................................................. 18-19

B. Plaintiff Alleged no Facts to Justify Striking Ms. Crick’s Amended Answer and Counterclaims ........................................................................................................ 19-25 1. There Is no Basis to Strike Ms. Crick’s Unconscionability Defense ............... 21-23

2. Ms. Crick’s Truth in Lending Act Claim Is Not Barred by the Statute of

Limitations and Should Not Be Stricken ...............................................................23

3. Ms. Crick’s Counterclaim for Attorneys’ Fees Should Not Be Stricken ......... 23-25

CONCLUSION ..............................................................................................................................25

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PRELIMINARY STATEMENT

Defendant Merlene Crick (“Defendant” or “Ms. Crick”) respectfully submits this

memorandum in opposition to Plaintiff’s motion for summary judgment. Plaintiff U.S.

Bank, National Association (“Plaintiff” or “U.S. Bank”) has failed to establish, among

other elements required on this motion, its standing to foreclose and its compliance with

the applicable predicate notice and filing requirements under the Real Property Actions

and Proceedings Law (“RPAPL”) §§1304 and 1303. Moreover, Ms. Crick raises

numerous triable issues of fact sufficient to preclude summary judgment.

STATEMENT OF FACTS

The Subject Loan

Merlene Crick is a 61 year old babysitter from Barbados. She attended primary

and secondary school in Barbados but did not receive a high school diploma. While in

Barbados, Ms. Crick worked as a seamstress and grew vegetables. Ms. Crick came to the

United States in or about 1990. She supported herself working long hours as a babysitter

and she became a U.S. Citizen in April, 2011. (Affidavit of Merlene Crick, dated August

2, 2016 (“Crick Aff.”) at ¶¶4-7).

Ms. Crick purchased her three-family home at 34 Troy Avenue, Brooklyn, New

York in 2007, and she has lived there continuously since. Ms. Crick’s two daughters and

their children currently live with her (Crick Aff. ¶2). Prior to purchasing her home, Ms.

Crick had never owned a home or borrowed money from a bank (Crick Aff. ¶12).

When she purchased the home, Ms. Crick was earning approximately $20,000 per

year as a babysitter (Crick Aff. ¶¶7, 10). An unsophisticated first-time home-buyer with

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little education, Ms. Crick was duped into purchasing the home by a “one stop shop”1

operation that “flipped” the property shortly after purchasing it by selling it to Ms. Crick

at an inflated price (Affidavit of Catherine P. Isobe, dated August 5, 2016 (“Isobe Aff.”)

¶¶8-12 and Exh. A; Crick Aff. ¶¶4-12). Ms. Crick spent her entire life savings on the

down payment (Crick Aff. ¶13). She paid an inflated price for a seriously flawed house

and in the process she was sold an unaffordable, predatory, adjustable rate, interest only

$646,000 mortgage loan (“Subject Loan”) issued by First Franklin Financial Corp. (“First

Franklin”), with a floor of 9.4 percent annual interest and a cap of 15.45 percent (Crick

Aff. ¶¶4-31 and Exhs. 1-3). When Ms. Crick protested at the closing that the mortgage

was unaffordable to her, the mortgage broker assuaged her with promises that the

monthly payment would be reduced in just a few months (Crick Aff. ¶¶15-16).

Ms. Crick’s home was egregiously overvalued and her income was inflated by the

mortgage broker or other individual who prepared her loan application. (Crick Aff. ¶¶10-

11 and Exhs. 1, 3). Ms. Crick’s HUD-1 settlement statement shows that the mortgage

broker received over $26,000, or almost four percentage points of the loan amount, as

fees. Included in these fees was a $12,920 yield spread premium paid by the lender for

upselling Ms. Crick into a high interest, non-amortizing loan (Crick Aff. Exh. 2). Ms.

Crick, with help from relatives, was able to make only two or three payments on the

mortgage before she fell into arrears, leading to the filing of two separate foreclosure

actions (Crick Aff. ¶24, 32, 35, 37). 1 One stop shops “specialize in fixing up and selling houses bought through distress sales and foreclosure auctions, then offer buyers the services they need to purchase these houses. That includes finding mortgage lenders, appraisers and even lawyers to represent them at the closing.” Alex Ulam, Taking One-Stop Shops to Court: Lawsuits Allege Mortgage Businesses Practice Racial Targeting and Fraud, The Real Deal (June 2, 2008) http://therealdeal.com/issues_articles/taking-one-stop-shops-to-court/ See also, Where Credit is Due: Bringing Equity to Credit and Housing After the Market Meltdown (Rogers, Christy & Powell, John A. eds., University Press of America, Inc., 2013) Ch. 8, p. 188.

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http://therealdeal.com/issues_articles/taking-one-stop-shops-to-court/

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History of Previous Foreclosure Action

On March 28, 2008, LaSalle Bank National Association as Trustee for Merrill

Lynch First Franklin Mortgage Loan Trust 2007-H, Mortgage Loan Asset-Backed

Certificates, Series 2007-H (“LaSalle Bank”), commenced a foreclosure against Ms.

Crick under index number 10321/2008 (“2008 Foreclosure Action”). La Salle Bank then

waited almost a year before filing a Request for Judicial Intervention and application for

an order of reference on March 2, 2009 (Isobe Aff. Exh. C).

On June 3, 2009, Ms. Crick, through counsel, filed a petition for Chapter 7

bankruptcy in the U.S. Bankruptcy Court for the Eastern District of New York, thus

triggering a stay of the 2008 Foreclosure Action (Crick Aff. ¶¶33-34; Isobe Aff. Exh. D).

The Chapter 7 Trustee, Robert J. Musso, declined to direct the sale of Ms. Crick’s home

and issued a report of no distribution on August 24, 2009 (Isobe Aff. Exh. D, pp. 1, 3-4).

The Bankruptcy Court issued an order discharging debtor on September 10, 2009 and the

case was closed on October 6, 2009 (Isobe Aff. Exh. D, p. 3).

By Order dated September 9, 2011, this Court dismissed the 2008 Foreclosure for

LaSalle Bank’s failure to submit the attorney affirmation required under Administrative

Order 548/10 of the Chief Administrative Judge of New York State (superceded by A/O

431/11) (Isobe Aff. Exh. F). Some four months after the dismissal of the 2008

Foreclosure Action—on January 13, 2012—Davidson Fink, LLP (“Davidson Fink”)

substituted in as new counsel for LaSalle Bank. Davidson Fink did not move to vacate

the dismissal but inexplicably filed a voluntary discontinuance of the already-dismissed

action (Isobe Aff. Exhs. C, F, H).

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Procedural History of this Action

On or about November 27, 2013, more than two years after the 2008 Foreclosure

Action was dismissed, U.S. Bank commenced this second foreclosure action against Ms.

Crick. In or about early December, 2013, Ms. Crick received papers including a “Help

for Homeowners in Foreclosure” (RPAPL §1303) notice, a “Notice of Commencement of

Case Subject to Mandatory Electronic Filing,”2 and the Summons and Complaint with

exhibits. (Crick Aff. Exh. 4). Plaintiff filed a one-page Affidavit of Service of these

documents on Ms. Crick on December 23, 2013 (Isobe Aff. Exh. J). Ms. Crick’s pro-se

Notice of No Consent to Electronic Service and Filing and Verified Answer were served

on Plaintiff’s counsel on December 23, 2013 and filed with the Kings County Clerk on

December 24, 2013 (Isobe Aff. Exhs. I, K).

This case was conferenced in the Mandatory Foreclosure Settlement Conference

Part and in Part 52, but no settlement was reached (Isobe Aff. Exh. I). In support of its

first motion for summary judgment filed on September 26, 2014, Plaintiff submitted the

affidavit of Michael Rosas, a Vice President of Nationstar Mortgage LLC (Isobe Aff.

Exh. L). Ms. Crick, now appearing by counsel, opposed Plaintiff’s motion and cross-

moved to amend her pro-se Answer. By Order dated January 23, 2015, the Court denied

Plaintiff’s motion and granted Ms. Crick’s cross-motion (Isobe Aff. Exh. M). Ms.

Crick’s counsel then served and filed Ms. Crick’s Amended Verified Answer dated

February 2, 2015, asserting six defenses (lack of standing; unconscionability; failure to

comply with RPAPL §§1304, 1306 and 1303 and failure to comply with CPLR §3012-b).

The amended answer also asserted counterclaims for violation of CPLR §3012-b;

2 Pursuant to Administrative Order 222/13 of the Chief Administrative Judge of the Courts, this case is subject to voluntary e-filing and not mandatory e-filing as Plaintiff stated in its notice to Ms. Crick.

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violations of the Truth in Lending Act and the Real Estate Settlement Procedures Act;

and a claim for attorney’s fees under RPL §282) (Isobe Aff. Exh. N). On or about April

14, 2016, Plaintiff served this second motion for summary judgment,3 which Ms. Crick

opposes a second time for the reasons enumerated below.

ARGUMENT

I. Summary Judgment Standard

Summary judgment is appropriate only where a thorough examination of the merits

clearly demonstrates the absence of any triable issues of fact. E.g., Marine Midland Bank,

N.A. v. Dino & Artie’s Automatic Transmission Co., 168 A.D.2d 610, 610 (2d Dep’t 1990)

(internal citations omitted). The party seeking summary judgment “must make a prima facie

showing of entitlement to judgment as a matter of law, tendering sufficient evidence to

eliminate any material issues of fact from the case.” Midfirst Bank v. Agho, 991 N.Y.S.2d

623, 627 (2d Dep’t 2014), citing Winegrad v. N.Y. Univ. Med. Center, 64 N.Y.2d 851, 853

(1985). Without such a showing, summary judgment must be denied. Id. at 853. Moreover,

the summary judgment proponent must make this showing by “tender of evidentiary proof in

admissible form.” Friends of Animals v. Associated Fur Mfrs., 46 N.Y.2d 1065, 1067 (1979)

(emphasis supplied).

Assuming the summary judgment proponent has met its prima facie burden, the

opponent need only “show facts sufficient to require a trial of any issue of fact” to defeat the

motion. Friends of Animals, 46 N.Y.2d at 1067-1068. Summary judgment “should not be

granted where the facts are in dispute, where conflicting inferences may be drawn from the

evidence, or where there are issues of credibility” Baker v. D.J. Stapleton, Inc., 43 A.D.3d

839, 839 (2d Dep’t 2007) (citation omitted).

3 On June 16, 2016, Plaintiff served a corrected version of the motion at the Court’s direction.

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II. Plaintiff Failed to Establish the Elements of its Case

Plaintiff has not adduced sufficient probative evidence to establish several elements

of its case, and has instead submitted evidence in support of its motion which demonstrates

the existence of disputed issues of material fact. In particular, Plaintiff has not established

that it owned or held the note and mortgage at commencement of this action or that it

complied with conditions precedent to foreclosure codified in the Real Property Actions

and Proceedings Law (“RPAPL”) §§1304 and 1303. Plaintiff has thus failed to make out

its prima facie case and is not entitled to summary judgment.

A. Plaintiff’s Affidavit in Support of its Motion is by an Individual Without Personal Knowledge of the Facts Alleged or Competency to Testify Based on a Review of Business Records

A motion for summary judgment “shall be supported by affidavit.” CPLR

§3212(b). The affiant must have personal knowledge of the facts contained in the

affidavit, must recite all material facts and must show that there is no meritorious defense

to the cause of action for which judgment is sought. Id. On summary judgment, “[a]

conclusory affidavit or an affidavit made by one without personal knowledge of the facts

does not establish the proponent’s prima facie burden.” JMD Holding Corp. v. Congress

Fin. Corp., 4 N.Y.3d 373, 384-385 (2005). See Almonte v. 638 West 160 LLC, 29

N.Y.S.3d 178 (1st Dep’t 2016) (LLC Managing Member’s affidavit, which was not based

on personal knowledge, could not be considered in support of LLC’s summary judgment

motion); Currie v. Wilhouski, 93 A.D.3d 816 (2d Dep’t 2012) (affidavit of insurer’s

branch claims manager not based on personal knowledge was of no probative or

evidentiary significance on summary judgment).

In support of its motion, Plaintiff submits an affidavit dated January 19, 2016 by

Frank Rosas, a Vice President at Nationstar Mortgage LLC (“Nationstar”) as servicer of

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the Loan (“Rosas Affidavit” (annexed to Isobe Aff. at Exhibit O)). In typical “robo-

signer” fashion, Mr. Rosas’ name and title are literally rubber stamped onto the first and

last pages of this boilerplate affidavit (Isobe Aff. Exh. O).

Mr. Rosas asserts “personal knowledge of the facts contained in this Affidavit by

virtue of my position at Nationstar, my familiarity with Nationstar’s processes and based

upon my review and analysis of the relevant business records of Nationstar referenced

and attached herein.” (Isobe Aff. Exh O ¶1). But key facts material to Plaintiff’s

summary judgment took place before Nationstar became the servicer of the loan, about

which Mr. Rosas lacks any personal knowledge. As revealed by Plaintiff’s own exhibits

and documents filed by Plaintiff’s purported predecessor in interest with the Bankruptcy

Court, the loan has been serviced by at least three different servicers prior to Nationstar

(Isobe Aff. Exhs. E, R). Bank of America ostensibly serviced the loan until at least June

24, 2013 (Isobe Aff. Exh. R). Thus Mr. Rosas lacks any personal knowledge of

transactions concerning the loan prior to June 24, 2013. His affidavit makes clear that

any familiarity with the facts extends no farther than Nationstar’s processes and records.

Mr. Rosas halfheartedly attempts to bootstrap the processes and records of Bank

of America into the realm of his knowledge (Isobe Aff. Exh. O ¶1), but he cannot and

does not testify as to the policies, practices or procedures of Bank of America (or indeed

any entity except Nationstar) and thus lays no foundation whatsoever for the introduction

of records not generated by Nationstar. C.f. Wells Fargo Bank, N.A. v. Jones, 139

A.D.3d 520, 521-522 (1st Dep’t 2016) (motion to substitute affidavit of merit and amount

due nunc pro tunc properly denied because affiant could not attest to facts in question

because they pre-dated loan’s assignment to plaintiff); Lodato v. Greyhawk North

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America, LLC, 39 A.D.3d 494, 496 (2d Dep’t 2007) (recipient of documents not made in

recipient’s regular course of business cannot lay a foundation for testimony based on

such documents). See also People v. Cratsley, 86 N.Y. 2d 81, 90 (1995).

The Rosas Affidavit regurgitates a lengthy chain of title (four transfers) for the

subject mortgage as reflected in assignments recorded, according to Mr. Rosas, “in the

Office of the Clerk of Kings County” (Isobe Aff. Exh. O ¶9). In fact, the mortgage

assignments state they were recorded with the New York City Department of Finance,

Office of the City Register (Isobe Aff. Exhs. B, G). Obviously Mr. Rosas’ review of

Nationstar’s second hand records was cursory at best.

The Rosas Affidavit attaches as an exhibit which is alleged to be a “copy of

Plaintiff’s computer database showing the date Plaintiff took possession of the original

note” (Isobe Aff. Exh. Q). This exhibit is certainly not a copy of a “database” since it is

comprised of just a single page. It appears to be an email containing a computer

screenshot of some kind, but it is so heavily redacted and illegible that it cannot have any

evidentiary value, even if Mr. Rosas, who claims no knowledge of Plaintiff’s record-

keeping procedures, were competent to authenticate it.

The Rosas Affidavit fails to meet the actual knowledge standard of CPLR

§3212(b). See, e.g., U.S. Bank v. Handler, 140 A.D. 3d 948, 949 (2d Dep’t 2016)

(summary judgment properly denied because servicer’s affidavit did not attest to personal

familiarity with record-keeping practices). See also Currie v. Wilhouski, 93 A.D.3d 816,

817 (2d Dep’t 2012). Even assuming a lesser evidentiary standard under the business

records rule, the Rosas Affidavit falls short. See Vermont Commissioner of Banking and

Insurance v. Welbilt Corp., 133 A.D.2d 396 (2d Dep’t 1987) (wholesale admission of

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files’ contents not permitted where proponent had not laid a foundation for the admission

of each individual document under CPLR §4518). Accordingly, summary judgment must

be denied because plaintiff has failed to support its motion with the admissible evidence

required by CPLR 3212(b).

B. Summary Judgment Should Be Denied Because Plaintiff Failed to Establish Strict Compliance with RPAPL §§1304 and 1303

1. Plaintiff Failed to Establish Strict Compliance with RPAPL §1304

The law is clear that where a foreclosure Plaintiff fails to show it met conditions

precedent to foreclosure, summary judgment must be denied. Aurora Loan Services, LLC

v. Weisblum, 85 A.D.3d 95, 106 (2d Dep’t 2011). RPAPL §1304 requires a lender to

serve a pre-foreclosure notice upon the borrower of a home loan at least 90 days before

commencing an action to foreclose. The RPAPL §1304 Notice must state the number of

days the borrower is in default on payment and the amount of money needed to cure the

default, and provide contact information for five housing counseling agencies in the

borrower’s area as well as contact information for the lender or loan servicer.

As established by Ms. Crick’s affidavit and the papers submitted on this motion,

the subject loan is a “home loan” and thus RPAPL §1304 applies. The borrower is a

natural person; the loan was primarily for household purposes (purchase of the home);

the property to be foreclosed is a one to four family home occupied by the borrower as

her principal residence; and the property is within the state (Crick Aff. ¶¶1-2). Ms. Crick

specifically denied receipt of the purported notice both in her Amended Verified Answer

and in her affidavit in opposition to this motion (Crick Aff. ¶36; Isobe Aff. Exh. N ¶45).

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In support of Plaintiff’s motion, the Rosas Affidavit merely recites purported

service of the RPAPL §1304 notice in conclusory, boilerplate fashion based on

unspecified “servicing records”:

The servicing records further show that the 90-day notices required by statute were mailed to Defendant by regular and certified mail to both the last known mailing address and to the property address on June 24, 2013. These letters were sent in separate envelopes from any other mailing or notice and were accompanied by a list of housing counseling agencies as required by statute.

(Isobe Aff. Exh. O ¶ 6). The Rosas Affidavit does not state who mailed the purported

RPAPL §1304 notice or what procedures were in place to insure proper mailing.

Inasmuch as the RPAPL §1304 Notice supposedly sent to Ms. Crick was not sent by Mr.

Rosas’ employer, Nationstar, but by Bank of America (Isobe Aff. Exh. R), the Rosas

Affidavit is of no evidentiary value concerning service of the RPAPL§1304 notice

whatsoever.

Failure to prove strict compliance with the unambiguously mandatory provisions

of RPAPL §1304 is fatal to a foreclosure, and Plaintiff has an affirmative obligation to

establish compliance. See Aurora Loan Services, LLC v. Weisblum, 85 A.D.3d 95, 106

(2d Dep’t 2011). Here, Plaintiff submitted a conclusory allegation of service of the

RPAPL §1304 notice within the Rosas Affidavit, along with an inadmissible copy of the

purported notice (Isobe Aff. Exh O ¶7 and Exh. R). The Rosas Affidavit provides no

basis for Mr. Rosas to testify about a notice sent by Bank of America, an entity with

which he has no connection (Isobe Aff. Exh O ¶¶1, 7). Plaintiff has therefore utterly

failed to satisfy its summary judgment burden of establishing, with an affidavit based on

personal knowledge, strict compliance with RPAPL §1304. See Cenlar, FSB v. Censor,

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139A.D. 3d 781, 782-783 (2d Dep’t 2016) (reversing, in part, grant of summary judgment

for plaintiff because plaintiff failed to establish compliance with RPAPL §1304 notice

requirement, where plaintiff's "litigation specialist" affidavit merely stated that notice was

mailed by both regular mail and certified mail but provided no affidavit of service); Wells

Fargo Bank, N.A. v. Burke, 125 A.D.3d 765, 766 (2d Dep’t 2015) (failure to submit

affidavit of proper service of RPAPL §1304 notice prevented plaintiff from

demonstrating absence of material issues regarding compliance with RPAPL §1304);

Deutsche Bank Nat’l Trust Co. v. Spanos, 102 A.D.3d 909, 910-911 (2d Dep’t 2013)

(same); TD Bank, N.A. v. Leroy, 121 A.D.3d 1256, 1257-1258 (3d Dep’t 2014) (copy of

RPAPL §1304 notice addressed to defendant with certified mail receipt lacking postmark

insufficient to establish compliance with RPAPL §1304 in the absence of an affidavit

from someone with personal knowledge of mailing). Because Plaintiff has failed to

establish strict compliance with the requirements of RPAPL §1304, the Court must deny

Plaintiff’s motion.

2. Plaintiff Failed to Establish Strict Compliance with RPAPL §1303

Plaintiff has also failed to establish that a statutorily compliant version of the

required Home Equity Theft Protection Act (“HETPA”) Notice, known as the RPAPL

§1303 Notice, was served on Ms. Crick. HETPA requires the Plaintiff in a residential

mortgage foreclosure to deliver to the homeowner a statutory-specific notice with the

summons and complaint, which must be delivered with the summons and complaint, with

the notice in bold, fourteen-point type and printed on colored paper in a different color

than the summons and complaint. NY RPAPL §1303(1)-(2). See generally First Nat.

Bank of Chicago v. Silver, 73 A.D.3d 162 (2d Dep’t 2010) (strict compliance with

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RPAPL § 1303 is a condition precedent and plaintiff bears the burden of proving strict

compliance therewith).

Here, Plaintiff’s counsel included what purports to be “a copy of the [RPAPL §

1303] notice that was delivered to the mortgagors” immediately after a copy of the

affidavit of service upon Ms. Crick as an exhibit to his attorney affirmation in support of

this motion (Isobe Aff. Exh. S ¶21 and Exh. T, pp. 1-2). The process server’s affidavit

of service of the summons and complaint upon Ms. Crick alleges service of “the within”

summons and complaint and RPAPL §1303 Notice, but no documents were attached to

the one page affidavit as filed with the Court on December 23, 2013 (Isobe Aff. Exh. I).

No RPAPL § 1303 Notice was attached to the Summons and Complaint as filed with the

Court at commencement of this action (Aff. Exh. G) By itself, the Powell Affirmation

cannot establish that Plaintiff served this particular version of the RPAPL §1303 notice

on Ms. Crick because he himself did not serve it, nor does he allege that he or anyone

from his firm provided the notice to the process server. Warrington v. Ryder Truck

Rental, Inc., 35 A.D.3d 445, 456 (2d Dep’t 2006).

The RPAPL §1303 notice Ms. Crick actually received differs from the version

submitted by Plaintiff’s counsel in support of this motion. (Crick Aff. ¶36 and Exh. 4;

Isobe Aff. ¶25 and Exh. T). The notice received by Ms. Crick directs the homeowner to

contact the “New York State Department of Financial Services” (“DFS”) at “1-877-226-

8657” (Crick Aff. Exh. 4), while the copy of the notice submitted for the first time on

summary judgment is an older version of the notice which directs the homeowner to

contact “The New York State Banking Department” at “1-877-BANK- NYS” (Isobe Aff.

Exh. T). Both versions of the notice are invalid because, as of July 18, 2012, RPAPL

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§1303 required the notice to refer borrowers to the DFS at 800-269-0990. Service of an

RPAPL §1303 Notice with incorrect contact information for the Department of Financial

Services does not strictly comply with the statute as amended effective July 18, 2012.

RPAPL §1303 (7); 2 NYMTG §33:23.50.

Plaintiff failed to serve Ms. Crick a statutorily compliant version of the RPAPL

§1303 Notice. Accordingly, summary judgment must be denied. U.S. Bank Nat.

Association v. Nicholson, 2013 WL 6409401 at *9 (Sup. Ct. Suff. Co.) (denying order of

reference where “the Plaintiff has failed to establish that it satisfied the statutory-specific

notice to the defendant with the service of the summons and complaint that was in effect

at the time the action was commenced.”).

C. Plaintiff Has Not Established Standing to Foreclose A foreclosure Plaintiff must demonstrate its interest in the mortgage and note as

part of its prima facie case because ownership of the mortgage and note gives rise to

standing to sue—a threshold element in a foreclosure action. “Standing to sue requires an

interest in the claim at issue in the lawsuit that the law will recognize as a sufficient

predicate for determining the issue at the litigant’s request. Without. . . standing, a party

lacks authority to sue.” Caprer v. Nussbaum, 825 N.Y.S.2d 55, (2d Dep’t 2006) (internal

citations and punctuation omitted). A plaintiff has standing in a mortgage foreclosure

action where it is the holder or assignee of the underlying note when the action is

commenced. See generally Aurora Loan Servs., LLC v. Taylor, 25 NY3d 355 (2015).

Plaintiff’s standing to foreclose hinges on Plaintiff establishing, as a matter of

law, that it was either the holder or assignee of the subject note at the commencement of

this action. As detailed below, Plaintiff failed to establish its status as a holder or assignee

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of the note at commencement and summary judgment is therefore properly denied. See,

e.g. U.S. Bank N.A. v Handler, 140 A.D. 3d 948 (2d Dep’t 2016) (affirming denial of

plaintiff's motion for summary judgment for lack of standing, because the evidence

submitted did not demonstrate, prima facie, that the note was physically delivered to

plaintiff prior to commencement of the action, where servicer's vice president's affidavit

did not attest that he was personally familiar with plaintiff's record keeping practices and

where plaintiff submitted two different copies of the note with endorsements that raised

triable issues of fact as to whether note was assigned to plaintiff prior to commencement

of the action); LaSalle Bank, N.A. v. Zaks, 138 A.D. 3d 788, 788-789 (2d Dep’t 2016)

(reversing summary judgment for plaintiff where plaintiff failed to establish that it had

standing to commence the action because the evidence tendered by plaintiff did not

establish either that the note was assigned to it prior to commencement of the action or

that the note was physically delivered to it prior to commencement of the action); Aurora

Loan Servs., LLC v. Mercius, 138 A.D.3d 650, 651-652 (2d Dep’t 2016) (affirming denial

of plaintiff's motion for summary judgment for lack of admissible evidence establishing

plaintiff's standing).

1. Plaintiff Failed to Allege Possession of the Note at Commencement

Under the NY UCC, in order to foreclose, Plaintiff must establish that the note

has been negotiated to it so that it has become the “holder” of the note. An instrument

“payable to order,” (such as the Note in its original state payable to First Franklin) is

negotiated “by delivery with any necessary indorsement” NY UCC §3-202(1).

The Rosas Affidavit is silent about who possessed the note at commencement of

this action, conclusorily asserting standing while providing no facts, merely reciting that,

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“[e]ither directly or through an agent, Plaintiff was the holder of the original Note,

Mortgage and Assignments of Mortgage prior to the instant action being commenced …”

(Isobe Aff. Exh. O ¶2). The only factual testimony Mr. Rosas can make concerning

possession of the Note is that “Nationstar, as servicer for Plaintiff, came into possession

of the original Note, endorsed in blank, on April 17, 2015” (Isobe Aff. Exh. O ¶2). This

contradicts the testimony of a different Nationstar Vice President, Michael Woods, who

swore that Nationstar had possession of the original Note endorsed in blank when he

made his affidavit on September 10, 2014 in support of the previously-denied motion for

summary judgment (Isobe Aff. Exh. L ¶2).

The note attached to the Rosas Affidavit bears two endorsements. The first is a

special endorsement from “First Franklin Financial Corp. an Op. Sub. Of MLB&T Co.,

FSB” to “First Franklin Financial Corporation.” (Isobe Aff. Exh. P). The second

endorsement is a blank endorsement from “First Franklin Financial Corporation.” Both

endorsements purport to be executed by the same individual, Tanya Rodriguez (Isobe

Aff. Exh. P).

Mr. Rosas recites in sequence that the Note was “delivered” to LaSalle Bank

(twice), then to First Franklin Financial Corporation, all “prior to commencement of the

instant action,” but Mr. Rosas does specify any of the dates on which these ostensible

deliveries took place. Nor does his affidavit divulge what First Franklin Corporation did

with the Note upon its receipt or where or in whose custody it was held (Isobe Aff. Exh.

O ¶9). Instead, he avers that the Note and Mortgage were assigned to “U.S. BANK,

NATIONAL ASSOCIATION, AS SUCCESSOR TRUSTEE TO BANK OF AMERICA,

N.A., AS SUCCESSOR TO LASALLE BANK, N.A., AS TRUSTEE FOR THE

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MERRILL LYNCH FIRST FRANKLIN MORTGAGE LOAN TRUST, MORTGAGE

LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-H1” by “Assignment dated

June 14, 2013” (Isobe Aff. Exh. O ¶9). As discussed below, the June 14, 2013

assignment is insufficient to imbue Plaintiff with standing to foreclose. Leaving that

issue aside, the Rosas Affidavit’s silence on what happened to the note between its

alleged delivery to First Franklin Financial Corporation and its alleged possession by

Nationstar as agent for Plaintiff is puzzling, to say the least. In addition, Plaintiff’s

omission of the Balloon Addendum calls into question whether Nationstar is in fact in

possession of the original Note (Isobe Aff. Exh O ¶¶1-11 and Exh. P; Crick Aff. Exh. 1).

Based on this gap in the recited chain of possession of the note, Plaintiff cannot

establish holder status as of commencement of this action because it has not established

delivery of the original, endorsed Note to it prior to commencement of this action. The

absence of any evidence that Plaintiff possessed the Note containing the endorsement in

blank at commencement prevents Plaintiff from establishing that it is a holder of the

Note. Federal Nat. Mortg. Assoc. v. Higgins, 2016 WL3232718 (Sup. Ct Kings Co.)

(mere production of a copy of note alone cannot establish standing as it does not establish

possession of original note); Deutsche Bank National Trust Company v. Weiss, 133

A.D.3d 704, 705-706 (2d Dep’t 2015) (affidavit’s conclusory statements without factual

details of delivery of note did not establish plaintiff’s standing); (collecting cases); See

also Deutsche Bank National Trust Company v. Idarecis, 133 A.D.3d 702, 703 (2d Dep’t

2015) (affidavit which did not allege date of delivery of note to plaintiff did not establish

standing).

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2. Plaintiff Failed to Establish It Held the Note and Mortgage at Commencement by Virtue of Written Assignment

Plaintiff also submits a series of documents whereby Mortgage Electronic

Registration Systems, Inc., (“MERS”), as nominee for First Franklin Financial Corp. an

Op. Sub. Of MLB&T Co., FSB, purported to assign the note and mortgage to three

different entities (Isobe Aff. Exhs. B, G and Exh. O ¶9). But MERS was not a party to

the note and it had no authority to assign the note; it is long-established that such

mortgage assignments from MERS are insufficient to confer standing because an

assignment of mortgage is a nullity without the attendant indorsement and delivery of the

note it secures. See HSBC Bank v. Hernandez, 92 A.D.3d, 843, 843-4, quoting Deutsche

Bank Natl. Trust Co. v Barnett, 88 A.D.3d 636, 637 (2d Dep’t 2011); Bank of N.Y. v

Silverberg, 86 A.D.3d at 280 (2d Dep’t 2011).

The last assignment in the chain was purportedly made by First Franklin Financial

Corporation to Plaintiff. However, for this assignment to be valid, First Franklin

Financial Corporation had to have possessed an interest in the note and mortgage. First

Franklin Financial Corporation cannot have acquired any such interest by virtue of the

MERS assignment to it. Accordingly, Plaintiff must establish that First Franklin Financial

Corporation was actually in possession of the endorsed note at the time it supposedly

assigned the note and mortgage to Plaintiff by written assignment. Instead, we have only

a boilerplate allegation, made by a person without personal knowledge of the facts,

averring that the note was delivered to First Franklin Financial Corporation “prior to

commencement” (Isobe Aff. Exh. O ¶ 9). Therefore, as an assignee, First Franklin

merely “stepped into the shoes of MERS, its assignor, and gained only that to which its

assignor was entitled.” Bank of N.Y. v. Silverberg, 86 A.D.3d at 283 (2d Dep’t 2011).

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Since MERS as assignor had no interest in the note, Plaintiff has not established that First

Franklin Financial Corporation was assigned anything at all.

III. Plaintiff Failed to Establish a Basis on which the Court Could Strike Ms. Crick’s Amended Answer and Counterclaims A. Plaintiff’s Notice of Motion is Defective

CPLR §2214(a) mandates that a notice of motion specify “the supporting papers

upon which the motion is based, the relief demanded and the grounds therefor.”

Plaintiff’s “Corrected Notice of Motion: (1) for Summary Judgment; (2) To Amend Title;

and (3) To Appoint Referee” cursorily requests as specific relief only “an Order for

Summary Judgment” (without naming the defendant or defendants against which it seeks

the Order) and refers to an attached proposed order. Plaintiff’s proposed “Order Granting

Summary Judgment” would award Plaintiff additional relief not sought in the notice of

motion, including the striking and dismissal of Ms. Crick’s Answer, conversion of Ms.

Crick’s appearance to a Notice of Appearance waiving service of all future papers except

the Notice of Sale and notice of proceedings to obtain surplus monies, amendment of the

caption to include purportedly defaulting tenants sued herein as “John Doe” or “Mary

Doe,” and referral of this action to a Referee to compute the amounts due Plaintiff.

Plaintiff’s counsel argues for striking Ms. Crick’s Amended Verified Answer and

Counterclaims, even though such relief was not demanded in the notice of motion. Ms.

Crick therefore addresses this branch of Plaintiff’s motion on its merits even though there

is no pending motion for such relief. Plaintiff has provided no legal authority or factual

basis for the grant of such extreme relief. Plaintiff’s repeated incantation that Ms. Crick’s

defenses and counterclaims are merely “bald” allegations is disingenuous and

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misleading4 (Isobe Aff. Exh. S ¶¶13-14, 19-25). Ms. Crick’s Amended Answer and

Counterclaims is replete with detailed allegations and references to documentary

evidence to support her claims (Isobe Aff. Exh. M). Plaintiff’s counsel was well aware of

such evidence before filing this motion because Ms. Crick submitted it in opposition to

Plaintiff’s previous, unsuccessful, motion for summary judgment (Isobe Aff. Exh. L).

B. Plaintiff Alleged No Facts to Justify Striking Ms. Crick’s Amended Answer and Counterclaims

The Rosas Affidavit alleges no factual basis for the Court to strike Ms. Crick’s

Amended Verified Answer or to grant any of the other expansive relief set forth in the

proposed order but not included in Plaintiff’s Corrected Notice of Motion (Isobe Aff.

Exh. O ¶¶1-11). Even if the Rosas Affidavit did assert facts which would warrant the

unrequested relief, Mr. Rosas is in no position to establish that any of Ms. Crick’s

defenses lack merit because he claims no personal knowledge of any transactions or

events concerning the Subject Loan and any business records of his employer Nationstar

concerning the Subject Loan cannot have been created before June 24, 2013, at which

time the loan was serviced by another entity (Isobe Aff. Exhs. E, O ¶¶1-11, R).

Residential Credit Solutions, Inc. v. Amsterdam, 2012 WL 3363358, 36 Misc.3d 1234(A)

at *3 (Sup. Ct. Kings Co.) (portion of motion which was to strike answer denied where

plaintiff’s affiant had no personal knowledge of the relevant transactions).

Plaintiff’s counsel alleges that “it is readily apparent that Defendant has

interposed [her Amended Verified Answer and Counterclaims] in this proceeding for no

other purpose than to delay the foreclosure of the Mortgage” (Isobe Aff. Exh. S ¶31).

4 Inexplicably, Plaintiff argues for striking defenses and counterclaims that were asserted in Ms. Crick’s initial December 2013 pro se Verified Answer, which has been superceded by the Amended Verified Answer and Counterclaims dated February 2, 2015 (Isobe Aff. Exh. O ¶14-18, 20).

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While Plaintiff makes this boilerplate argument in opposition to virtually every case in

which its claims are contested, Plaintiff’s accusations of “delay” against Ms. Crick are

especially disingenuous in light of the six years that have elapsed since the first

foreclosure action was commenced, only to be withdrawn on account of Plaintiff’s

predecessor’s inability to comply with the requirements of Administrative Order 548/10

(Isobe Aff. Exhs. C, F). After the 2008 Foreclosure Action was dismissed, Mr. Powell’s

own firm needlessly substituted in as counsel and added another year of delay, apparently

in order to “discontinue” an action which had already been dismissed by the Court (Isobe

Aff. Exh. G).

Not surprisingly, Plaintiff offers no support for its suggestion that Ms. Crick’s

assertion of defenses and counterclaims in this lawsuit that it commenced is somehow

improper. (Isobe Aff. Exh. S ¶31). To the extent that Plaintiff requests that this Court

strike Ms. Crick’s Amended Verified Answer and Counterclaims as a sanction, such

request is based on nothing more than counsel’s unsupported and calumnious suggestion

of some ill motive on the part of Ms. Crick. Cr. Henry v. Datson, 140 A.D.3d 1120,

1121-1122 (2d Dep’t 2016) (drastic remedy of striking an answer pursuant to CPLR §

3126 for failure to comply with discovery demands and orders not appropriate unless

conduct is clearly willful and contumacious); Guiliano v. 666 Old Country Road, LLC,

100 A.D.3d 960, 961 (2d Dep’t 2012) (intentional or negligent spoliation of evidence did

not warrant striking of answer). Plaintiff, needless to say, has neither articulated nor

demonstrated any such basis for striking Ms. Crick’s pleading in this action aside from

the apparent inconvenience that litigation of this action on the merits presents to Plaintiff

and its counsel’s preference for obtaining judgments on default.

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1. There is no Basis to Strike Ms. Crick’s Unconscionability Defense

Ms. Crick’s Amended Verified Answer and Counterclaims more than

sufficiently alleges that in providing a $646,000, non-amortizing loan at 9.45% interest to

a 53 year old babysitter who lacked even a high school education and earned $20,000 per

year, Plaintiff’s putative predecessor in interest, First Franklin, cannot have expected the

loan to be repaid. The doctrine of unconscionability “is primarily a means with which to

protect the ‘commercially illiterate’ consumer beguiled into a grossly unfair bargain by a

deceptive vendor finance company.” Gillman v. Chase Manhattan Bank, N.A., 135

A.D.2d 488, 491 (2d Dep’t 1987), aff’d. 73 N.Y.2d 1 (1988).

First Franklin’s predatory lending practices have been acknowledged by New

York courts in the extensive litigation surrounding the securitization of loans such as Ms.

Crick’s:

Far from a minor private wrong, First Franklin's lending practices, described as “basically criminal” resulted in thousands of borrowers receiving loans that they could not repay. This conduct by First Franklin, one of the nation's largest mortgage originators involved a high degree of moral culpability, contributed to the collapse of the real estate market, and resulted in hardship for millions of Americans. Motions to strike punitive damage claims in similar cases brought by insurers have often not been successful. (emphasis supplied).

AMBAC Assurance Corporation v. First Franklin Corporation, 2013 WL 3779636, 40

Misc.3d 1214(A) at *16 (Sup. Ct. N.Y. Co.) (internal citations omitted).

Summary judgment should not be granted and an affirmative defense of

unconscionability should not be stricken where, as here, the facts of the loan transaction

suggest unconscionability: an adjustable interest rate well above the market rate at the

time of the transaction; a non-amortizing loan provided to an unsophisticated consumer

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who was obviously unable to pay; and a subprime product sold to a minority borrower in

a minority community with a bonus yield spread premium paid by an established

predatory lender to the mortgage broker. C.f., Wells Fargo Bank, N.A. v. Weekes, 40

Misc.3d 1205(A) at *3-4 (Sup. Ct. Kings Co. 2014) (motion to dismiss unconscionability

defense denied where low income, minority borrower was given a high cost adjustable

rate loan in 2006; court noted that Banking Law 6-m(4)5 would have applied if the loan

had been made after September 2008); Wells Fargo Bank, N.A. v. Hughes, 27 Misc.3d

628, 629-630 (Sup. Ct. Erie Co. 2010) (court opined that lender’s practice of subprime,

hybrid ARM lending to unsophisticated borrowers was unconscionable and deceptive); M

& T Mortgage v. Foy, 20 Misc.3d 274 (Sup. Ct. Kings Co. 2008) (to avoid an

5 Ability to repay. No lender or mortgage broker shall make or arrange a subprime home loan unless the lender or mortgage broker reasonably and in good faith believes at the time of the loan closing that one or more of the borrowers, when considered individually or collectively, has the ability to repay the loan according to its terms and to pay applicable real estate taxes and hazard insurance premiums. If a lender or mortgage broker making or arranging a subprime home loan knows that one or more home loans secured by the same real property will be made contemporaneously to the same borrower with the subprime home loan being made or arranged by that lender or mortgage broker, the lender or mortgage broker making or arranging the subprime home loan must document the borrower's ability to repay the combined payments of all loans on the same real property. (a) A lender or mortgage broker's analysis of a borrower's ability to repay a subprime home loan according to the loan terms and to pay related real estate taxes and insurance premiums shall be based on a consideration of the borrower's credit history, current and expected income, current obligations, employment status, and other financial resources other than the borrower's equity in the real property that secures repayment of the subprime home loan. (b) In determining a borrower's ability to repay a subprime home loan, the lender or mortgage broker shall take reasonable steps to verify the accuracy and completeness of information provided by or on behalf of the borrower using tax returns, payroll receipts, bank records, reasonable alternative methods, or reasonable third-party verification. (c) In determining a borrower's ability to repay a subprime home loan according to its terms when the loan has an adjustable rate feature, the lender or mortgage broker shall calculate the monthly payment amount for principal and interest by assuming (i) the loan proceeds are fully disbursed on the date of the loan closing, (ii) the loan is to be repaid in substantially equal monthly amortizing payments of principal and interest over the entire term of the loan, with no balloon payment, and (iii) the interest rate over the entire term of the loan is a fixed rate equal to the higher of the initial interest rate or the fully indexed rate at the time of the loan closing, without considering any initial discounted rate (d) A lender or mortgage broker's analysis of a borrower's ability to repay a subprime home loan may utilize reasonable commercially recognized underwriting standards and methodologies, including automated underwriting systems, provided the standards and methodologies comply with the provisions of this section.

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unconscionable result, equity required shifting of burden of proof to plaintiff to show that

purchase money adjustable rate mortgage at 9.5 percent given to minority borrower in a

minority neighborhood was not discriminatory).

2. Ms. Crick’s Truth in Lending Act Claim Is Not Barred by the Statute of Limitations and Should Not Be Stricken Plaintiff incorrectly argues that Ms. Crick’s counterclaim under the Truth in

Lending Act (“TILA”) is barred by a one year statute of limitations, in support of which

Plaintiff cites to the statute and several cases brought by borrowers as plaintiffs against

lenders. (Isobe Aff. Exh. R ¶23). These cases do not apply here. Under CPLR §203(d)

and the doctrine of equitable recoupment, a defense or counterclaim arising from the

same transaction asserted in a complaint may be used by a defendant as a setoff up to the

amount demanded by plaintiff even if the defense or counterclaim is otherwise barred by

the statute of limitations. First Trust Nat’l. Ass’n. v. Chiang, 242 A.D.2d 599, 600 (2d

Dep’t 1997) (claims barred by TILA statute of limitations could be asserted as defense in

foreclosure). See also Balanoff v. Doscher, A.D.3d 995, 996 (2d Dep’t 2016); Carlson v.

Zimmerman, 63 A.D.3d 772, 774 (2d Dept. 2009); Moreover, Plaintiff has not eliminated

triable issues of fact concerning the TILA violations or even attempted to rebut Ms.

Crick’s detailed allegations (Isobe Aff. Exh. M ¶¶71-83), and therefore summary

judgment must be denied. First Trust Nat’l Ass’n., 242 A.D.2d at 600 (2d Dep’t 1997).

3. Ms. Crick’s Counterclaim for Attorney’s Fees Should Not Be Stricken

The Court should not strike Ms. Crick’s properly asserted counterclaim for

attorney’s fees (Isobe Aff. Exh. N ¶¶96-99). Real Property Law § 282 (“RPL § 282”)

provides as follows, in relevant part:

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Whenever a covenant contained in a mortgage on residential real property shall provide that in any action or proceeding to foreclose the mortgage that the mortgagee may recover attorneys' fees and/or expenses incurred as the result of the failure of the mortgagor to perform any covenant or agreement contained in such mortgage, or that amounts paid by the mortgagee therefor shall be paid by the mortgagor as additional payment, there shall be implied in such mortgage a covenant by the mortgagee to pay to the mortgagor the reasonable attorneys' fees and/or expenses incurred by the mortgagor as the result of the failure of the mortgagee to perform any covenant or agreement on its part to be performed under the mortgage or in the successful defense of any action or proceeding commenced by the mortgagee against the mortgagor arising out of the contract . . . .

RPL § 282(1) (emphasis supplied). Ms. Crick’s mortgage provides, at Section 9:

If: (a) I do not keep my promises and agreements made in this Security Instrument … then Lender may do and pay for whatever is reasonable and appropriate to protect Lender’s interest in the Property and Lender’s rights under this Security Instrument. … Lender’s actions may include, but are not limited to: … (d) appearing in court; and (e) paying reasonable attorneys’ fees to protect its interest in the Property and/or rights under this Security Instrument … I will pay to Lender any amounts, with interest, which Lender spends under this Section 9.

(Exh. C to Plaintiff’s motion, p. 8, ¶9). Section 9 of the mortgage includes a covenant for

Ms. Crick to pay attorney’s fees incurred by her purported lender in this action. Ms.

Crick has retained counsel to represent her in this action. Thus Ms. Crick has met all the

conditions required by RPL §282 and is subject only to the Court’s ultimate decision as

to whether she has mounted a successful defense. It is therefore premature to strike her

counterclaim for attorney’s fees until the action is disposed.

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As explained above, Ms. Crick’s defenses based on Plaintiff’s lack of standing,

and its failure to establish strict compliance with RPAPL §§ 1304 and 1303 have merit

and accordingly these defenses should not be stricken. Indeed none of Ms. Crick’s

defenses or counterclaims should be stricken as Plaintiff failed to set forth any legal or

factual basis for such draconian relief.

CONCLUSION


for summary judgment in its entirety and the Court should award Ms. Crick such other

and further relief as the Court deems just and proper.

Dated: Brooklyn, New York August 5, 2016


/s/ ______________________________ Catherine P. Isobe, Esq. 1360 Fulton Street, Suite 301 Brooklyn, New York 11216 (718) 246-3276 Attorneys for Defendant Merlene Crick

To: Davidson Fink LLP 28 East Main Street, Suite 1700 Rochester, NY 14614 (585) 760-8218 Attorneys for Plaintiff By NYSCEF

112

FILED: KINGS COUNTY CLERK 11/22/2016 INDEX NO. 507500/2013

NYSCEF DOC. NO. 115 RECEIVED NYSCEF: 11/23/2016

1 of 2113

2 of 2114

1

*Prepared with the assistance of counsel licensed to practice law in New York State.

Supreme Court of the State of New York

County of Queens

Wells Fargo Bank, N.A.,

Plaintiff,

-against-

Ms. K, et al.

Defendants.

DEFENDANT MS. K’s AFFIDAVIT IN

SUPPORT OF ORDER TO SHOW CAUSE

Index No. REDACTED

STATE OF NEW YORK )

) ss.:

COUNTY OF NEW YORK )

Ms. K, being duly sworn, declares and states:

1. My name is Ms. K. I am a named defendant in this action.

2. I have resided at the property that is the subject of this action since 2002.

3. I hereby request that the Court (1) vacate the Order of Reference and Judgment of

Foreclosure and Sale issued in this case, (2) compel Plaintiff’s acceptance of a late answer and

(3) waive the filing fees and allow me to proceed as a poor person.

The Court Should Vacate the Order of Reference and Judgment of Foreclosure and Sale

4. The Court should vacate the Order of Reference and Judgment of Foreclosure and

Sale because (1) both were impermissibly obtained ex parte without proper notice and (2)

Plaintiff failed to prove its case as required by CPLR § 3215(f).

The Order of Reference and Judgment of Foreclosure and Sale Were Wrongly

Obtained Ex Parte without Proper Notice

5. The Order of Reference entered on March 10, 2016 and Judgment of Foreclosure

and Sale entered on May 17, 2016 should be vacated because Plaintiff impermissibly moved ex

parte without providing notice.

6. CPLR 2103(e) requires that “[e]ach paper served on any party shall be served on

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every other party who has appeared.”

7. A party appears by, inter alia, entering a notice of appearance. CPLR 320(a).

8. I appeared at the first court date and was represented by an attorney. I also

personally attended the court date.

9. At the first court date, my attorney entered a Notice of Appearance. This Notice

of Appearance is attached as Exhibit A.

10. When the referee in the Residential Foreclosure Conference Part released my case

from the Part, she made note that I had appeared along with two attorneys who represented me at

that conference. A copy of this Residential Foreclosure Conference Order is attached as Exhibit

B.

11. Since my attorney filed a notice of appearance during settlement conferences, I

appeared in the case, and Plaintiff was required to serve motion papers upon me. CPLR 320(a);

see also Emigrant Mortgage Co. v. Murray, 38 Misc. 3d 1208(A), 967 N.Y.S.2d 866 (Queens

Cty. Sup. Ct. 2013) (hold that appearing by counsel at foreclosure conference was an appearance

sufficient to confer personal jurisdiction).

12. Even if a Notice of Appearance had not been duly entered, courts have considered

participation in foreclosure settlement conferences to be informal appearances. See, e.g., Wells

Fargo Bank, N.A. v. Forde-White, 38 Misc. 3d 1209(A), 966 N.Y.S.2d 350 (Kings Cty. Sup. Ct.

2013) (“participation in mandatory settlement conferences is an ‘attempt to participate’ sufficient

to stave off a default”); Wells Fargo Bank v. Butler, 41 Misc. 3d 547, 552-553, 971 N.Y.S.2d 41

(Kings Cty. Sup. Ct. 2013) (finding that participation in settlement conferences was sufficient to

avoid default);

13. However, instead of providing proper notice of the motion, Plaintiff

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impermissibly proceeded ex parte.

14. “Ex parte applications are generally disfavored by the courts, unless expressly

authorized by statute, because of the attendant due process implications caused by proceeding

without notice.” Fosmire v. Nicoleau, 144 A.D.2d 8, 12, 536 N.Y.S.2d 492, 494 (1989), aff'd, 75

N.Y.2d 218, 551 N.E.2d 77 (1990) (citing Luckey v. Mockridge, 112 App.Div. 199, 98 N.Y.S.

335; Lohne v. City of New York, 25 A.D.2d 440, 266 N.Y.S.2d 909; Papacostopulos v. Morrelli,

122 Misc.2d 938, 472 N.Y.S.2d 284; Siegel, Practice Commentaries, McKinney's Cons. Laws of

N.Y., Book 7B, CPLR C2211:6, at 32–33)

15. Plaintiff’s ex parte applications for an Order of Reference and Judgment of

Foreclosure and Sale are without express statutory authority and caused me prejudice. Because

Plaintiff improperly proceeded ex parte, the resulting orders must be vacated.

In its Ex Parte Applications, Plaintiff Failed to Prove its Case

16. Even this court holds that I was not entitled to notice of Plaintiff’s motions,

Plaintiff simply failed to prove its case in the filings.

17. CPLR § 3215(f) requires that a party seeking default judgment file “proof of the

facts constituting the claim”.

18. Here, Plaintiff failed to offer proof that it satisfied the contractual and statutory

preconditions for foreclosure. Specifically, Plaintiff failed to show proof that it (1) properly sent

the Notice of Default required by the mortgage, (2) complied with the notice requirements set

forth by RPAPL § 1304, and (3) complied with the filing requirements set forth by RPAPL §

1306.

Plaintiff has Not Provided a Satisfactory Notice of Default

19. My mortgage requires that in the event of default, Plaintiff must provide a written

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Notice of Default before accelerating the debt and bringing a foreclosure action. See Mortgage ¶

22. A copy of my mortgage is attached as Exhibit C.

20. Plaintiff’s affidavit states that I fell behind on the mortgage on March 1, 2015.

Affidavit of Crescencia Jean-Noel ¶ 4 (“There is in fact a default under the terms and conditions

of the Promissory Note and Mortgage, because the March 1, 2015 and subsequent payments

were not made.”); Complaint ¶ 13 (“Ms. K failed to comply with the terms, covenants and

conditions of said notes, mortgages and Final Loan Modification by failing and omitting to pay,

to the plaintiff, payments due on March 1, 2015”).

21. Plaintiff’s affidavit also included a copy of the Notice of Default sent to me

pursuant to my mortgage. A copy of the Notice of Default attached to the Affidavit of Crescencia

Jean-Noel is attached to this affidavit as Exhibit D.

22. However, the Notice of Default is dated December 16, 2014, which is months

before the default date listed in Plaintiff’s papers. Plaintiff has offered no evidence that I was in

default on December 16, 2014.

23. Even if I was in default at that time and cured the default, Plaintiff would have

been required to issue a new notice of default after I re-defaulted on the loan. Mortgage ¶ 22. In

any case, I do not recall ever reinstating my mortgage. I made payments consistently until my

unemployment benefits ran out. Once those benefits ran out, I did not have enough funds to

make any payments.

24. I believe I fell behind in spring of 2015, not in late 2014. This belief is

corroborated by the allegations in Plaintiff’s Complaint and the testimony of its affiant.

25. Plaintiff’s reliance on a Notice of Default issued months before default is a fatal

flaw that should have precluded default judgment.

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Plaintiff’s RPAPL § 1306 Filing Does Not Comply with the Statute

26. RPAPL § 1306 requires that Plaintiff file a statement with the New York State

Department of Financial Services (“DFS”) with information about the mortgage within three

days after mailing the notices required by RPAPL § 1304.

27. Compliance with RPAPL § 1306 is a condition precedent to foreclosure. RPAPL

§ 1306(1) (“Any complaint served in a proceeding initiated pursuant to this article shall contain,

as a condition precedent to such proceeding, an affirmative allegation that at the time the

proceeding is commenced, the plaintiff has complied with the provisions of this section.”)

28. In Exhibit E to its Complaint, Plaintiff included a copy of its Proof of Filing

Statement from DFS. A copy of this Proof of Filing Statement is attached as Exhibit E. The

Proof of Filing Statement shows that Plaintiff filed on December 16, 2014 and listed December

16, 2014 as the mailing date. Id.

29. In Exhibit D to its Complaint, Plaintiff included the tracking numbers for the

notice sent by certified mail. A copy of the notice sent by certified mail is attached as Exhibit D.

I searched the United States Postal Service’s (“USPS”) website for the tracking number listed -

9314710011700782958342. I have attached printouts of the USPS search results to my affidavit

as Exhibit F.

30. The USPS’s tracking information shows that Plaintiff falsified its filing with DFS.

Although the RPAPL § 1304 notices are dated December 16, 2014, Plaintiff did not actually

deliver the letter to the post office until December 19, 2014. This shows a difference of three

business days between when Plaintiff claimed to mail the notice and when Plaintiff actually did.

31. This creates two problems with Plaintiff’s filing: (1) Plaintiff provided false

information to DFS and therefore did not comply with the statute; (2) Plaintiff filed before

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mailing and therefore did not comply with the statute; and (3) as discussed in Paragraph XX,

supra, Plaintiff has not shown that I was in default at the date of filing.

32. Because compliance with RPAPL § 1306 is a precondition for foreclosure and

Plaintiff did not comply with the statute, Plaintiff should not have been awarded default

judgment.

The RPAPL § 1304 Notice Is Inaccurate and Therefore Defective

33. As discussed in Paragraph 28, supra, Plaintiff dated the RPAPL § 1304 notice as

being mailed on December 16, 2014, but did not actually mail it until December 19, 2014.

34. As a result, the mailing date on the notice was incorrect.

35. Because the ninety day period in the RPAPL § 1304 notice runs from the date of

mailing, a misrepresentation in the date of mailing is a substantive misrepresentation that serves

to defeat the purpose of the notice.

36. RPAPL § 1304 requires strict compliance. Aurora Loan Servs., LLC v. Weisblum,

85 A.D.3d 95, 103, 923 N.Y.S.2d 609, 614 (App. Div. 2d Dep’t 2011) (“proper service of the

RPAPL 1304 notice containing the statutorily-mandated content is a condition precedent to the

commencement of the foreclosure action. The plaintiff's failure to show strict compliance

requires dismissal.”).

37. An inaccurate notice does not meet the requirements of the statute. Hudson City

Sav. Bank v. DePasquale, 113 A.D.3d 595, 596, 977 N.Y.S.2d 895 (App. Div. 2d Dep’t 2014)

(“As the plaintiff concedes, its notice to the homeowners required by RPAPL 1304 contained a

factual inaccuracy. The plaintiff's failure to make a prima facie showing of strict compliance

with RPAPL 1304 requires denial of its motion for summary judgment”).

38. Additionally, as discussed in Paragraphs 20-22, supra, Plaintiff has not shown

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that I was in default at the date of the RPAPL § 1304 notice.

39. While RPAPL § 1304(4) allows Plaintiff to avoid provided a second notice in the

event of re-default, Plaintiff has not provided any evidence to suggest that I was in default in

December 2014 and that RPAPL § 1304(4) applies.

40. As stated in Paragraph 23, supra, I do not recall ever reinstating my mortgage. I

made payments consistently until my unemployment benefits ran out. Once those benefits ran

out, I did not have enough funds to make any payments.

41. I believe I fell behind in spring of 2015, not in late 2014. This belief is

corroborated by the allegations in Plaintiff’s Complaint and the testimony of its affiant.

42. Because this notice was clearly inaccurate, Plaintiff should not have been awarded

default judgment.

Pursuant to CPLR § 3012(d), the Court Should Compel Acceptance of a Late Answer

43. Under CPLR § 3012(d), “upon the application of a party, the court may…compel

the acceptance of a pleading untimely served, upon such terms as may be just and upon a

showing of reasonable excuse for delay or default.” See also Cirillo v. Macy's, Inc., 61 A.D.3d

538, 540, 877 N.Y.S.2d 281, 283 (App. Div. 1st Dep’t 2009).

44. Courts have routinely permitted service of a late answer where (1) the delay was

not willful, (2) the defendant has meritorious defenses and (3) service of the answer does not

unfairly prejudice the plaintiff. See, e.g., Nickell v. Pathmark Stores, Inc., 44 A.D.3d 631, 632,

843 N.Y.S.2d 177, 178 (App. Div. 2d Dep’t 2007); Jolkovsky v. Legeman, 32 A.D.3d 418, 419,

819 N.Y.S.2d 561, 562 (App Div. 2d Dep’t 2006); Watson v. Pollacchi, 32 A.D.3d 565, 565-66,

819 N.Y.S.2d 612, 613 (App. Div. 3d Dep’t 2006); Nason v. Fisher, 309 A.D.2d 526, 526, 765

N.Y.S.2d 32, 33 (App. Div. 1st Dep’t 2003).

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45. Allowance of the service of a late answer is consistent with New York’s strong

public policy in favor of a determination of controversies on the merits. See, e.g., Jones v. 414

Equities LLC, 57 A.D.3d 65, 81, 866 N.Y.S.2d 165, 178 (App. Div. 1st Dep’t 2008); Hosten v.

Oladapo, 52 A.D.3d 658, 658-59, 858 N.Y.S.2d 915, 916 (App. Div. 2d Dep’t 2008); Kaiser v.

Delaney, 255 A.D.2d 362, 362, 679 N.Y.S.2d 686, 687 (App. Div. 2d Dep’t 1998); Scagnelli v.

Pavone, 178 A.D.2d 590, 591, 577 N.Y.S.2d 484, 485 (App. Div. 2d Dep’t 1991) (with “the

existence of several viable defenses…[t]he determination of the Supreme Court [allowing

defendant to serve a late answer] is in furtherance of a public policy which favors the resolution

of cases on the merits.”).

I Have a Reasonable Excuse for Not Answering in a Timely Manner

46. When I was served with the summons and complaint, I did not realize that I had

to file an answer with the court.

47. I have limited knowledge of legal processes and have never been sued before.

48. At that time, I was trying to address the situation with the mortgage by selling the

home. But, the home requires cleaning and other work to be in saleable condition.

49. Because I am a breast cancer survivor, I still suffer physical aftereffects from

chemotherapy and a bilateral mastectomy. As a result, doing the work around the house

necessary to sell the home is very taxing physically and mentally. My financial situation does not

permit me to hire someone to prepare the home for sale.

50. Soon after I received the summons and complaint, I called Wells Fargo to discuss

the matter. Wells Fargo would not discuss the legal case with me.

51. After trying to speak with Wells Fargo, I called Plaintiff’s counsel, Frenkel,

Lambert, Weiss, Weisman & Gordon, LLP, on two separate occasions. Both times I was only

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able to speak with someone who was not an attorney and I was told that the firm would not talk

to me unless I had an attorney.

52. At that time, I was unable to afford an attorney and did not know that I could find

an attorney who would take my case pro bono.

53. Later, a friend referred me to the Legal Aid Society in Queens. I spoke with an

attorney, Anna Stallmann, who told me that I should have filed an answer, but that my time to do

so had expired. This was the first that I had heard about filing an answer with the court. Ms.

Stallmann did not tell me that I could ask permission to file a late answer.

54. Additionally, I attended the mandated foreclosure settlement conferences and

have communicated to Wells Fargo multiple times my desire to settle the matter by selling the

home and paying off the mortgage.

55. Courts have repeatedly held that ongoing settlement negotiations constitute a

reasonable excuse for failure to timely answer a plaintiff’s complaint. See, e.g., Scarlett v.

McCarthy, 2 A.D.3d 623, 623-24, 768 N.Y.S.2d 342, 343 (App. Div. 2d Dep’t 2003); Pettinato

v. Sunscape at Bay Shore Home Owners Assoc., 97 A.D.2d 434, 435, 467 N.Y.S.2d 628, 630

(App. Div. 2d Dep’t 1983); HSBC Bank USA, N.A. v. Cayo, 34 Misc.3d 850, 934 N.Y.S.2d 792

(Kings County Sup. 2011).

56. The Cayo court held that a “good faith belief in settlement, supported by

substantial evidence, constitutes a reasonable excuse for default.” HSBC Bank USA, N.A. v.

Cayo, 34 Misc.3d 850, 856, 934 N.Y.S.2d 792, 796 (N.Y. Sup., 2011) (citing Armstrong

Trading, Ltd. v. MBM Enterprises, 29 A.D.3d 835, 815 N.Y.S.2d 689 (2006)). In that case, the

defendant stated that the delay in filing an answer was due to “ongoing settlement negotiations,

both in the court and privately.” Cayo at 854. The court held that denying defendant’s request

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would be against the policy of the settlement conferences, stating that a “pro se litigant

attempting to negotiate with the plaintiff in good faith should not be divested of their right to

litigate the action as a result of those negotiations.”Id. at 856. The court further held that “where

the time period post-default is significant, but viable defenses are alleged, and there is evidence

of private or mandated settlement negotiations, a defendant should be granted leave to file a late

answer.” Id. at 857.

57. Even before the case was brought, I have told Wells Fargo that I am attempting to

sell the home, but I have been having difficulty doing the work necessary to get the home in

saleable condition.

58. I have agreed to have the home listed on the MLS and have been advised by

realtor that the proceeds from the sale of the home should be sufficient to pay off the mortgage.

I Have Shown That I Have Three Meritorious Defense

59. A defendant seeking leave to file a late answer pursuant to CPLR § 3012(d) must

demonstrate “the existence of potentially meritorious defenses.” See Shapiro v. Chawla, 55

A.D.3d 898, 899, 866 N.Y.S.2d 356, 356 (App. Div. 2d Dep’t 2008); Nickell v. Pathmark Stores,

44 A.D.3d 631, 632, 843 N.Y.S.2d 177, 178 (App. Div. 2d Dep’t 2007).

60. As discussed in Paragraphs 18-42, supra¸ Plaintiff’s papers show that it has not

complied with (1) the Notice of Default provision in my mortgage, (2) Real Property Actions and

Proceedings Law Section 1306 (“RPAPL § 1306”) or (3) Real Property Actions and Proceedings

Law Section 1304 (“RPAPL § 1304”).

61. A failure to comply with any of these three contractual and statutory

preconditions of foreclosure is an absolute defense to a foreclosure action.

Plaintiff Will Not Be Prejudiced By Allowing A Late Answer

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62. When deciding motions under CPLR § 3012(d), courts consider whether or not

filing of an answer would prejudice the plaintiff. See, e.g., Jolkovsky v. Legeman, 32 A.D.3d

418, 419, 819 N.Y.S.2d 561, 561 (App. Div. 2d Dep’t 2006). In a decision by the Second

Department, U.S. Bank, Nat’l Assn. v. Sharif, the court found no prejudice to plaintiff where

defendant sought to amend an answer to raise the issue of standing before a judgment had

attached. 89 A.D.3d 723, 723-24, 933 N.Y.S.2d 293, 294-95 (App. Div. 2d Dep’t 2011). Sharif is

consistent with New York’s strong public policy in favor of determining controversies on the

merits. See, e.g., Jones v. 414 Equities LLC, 57 A.D.3d 65, 81, 866 N.Y.S.2d 165, 178 (App.

Div. 1st Dep’t 2008).

63. As discussed in Paragraphs XX, supra, while Plaintiff has furthered the case, it

has done so in violation of the CPLR and this Court must vacate both the Order of Reference and

the Judgment of Foreclosure and Sale. Once those wrongfully obtained orders are vacated,

Plaintiff will not be prejudiced by having to litigate the merits of its case.

Pursuant to CPLR § 1101, the Court Should Waive Filing Fees and Allow Me to Proceed as

a Poor Person

64. Because I am unable to pay the costs, fees and expenses necessary to defend

myself in this action, the Court should waive courts fees and allow me to proceed as a poor

person. See CPLR § 1101(a).

65. Because of my health problems, I am unable to work and have no income. I rely

on charities and friends to cover my living expenses. I am currently applying for public

assistance.

66. My only property is the house that is the subject of this foreclosure action. I am

not sure of its value, but I am in the process of attempting to sell it. I am unable to sell it in time

to pay for my court costs.

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67. Because I live alone in the property, nobody else has a beneficial interest in

defending this suit.

68. On July 1, 2016, I mailed a copy of these papers to Corporation Counsel at 100

Church St., 5th Fl., New York, NY 10007 in accordance with CPLR § 1101(c).

Temporary Injunctive Relief Staying the Sale is Appropriate in this Case

69. I face significant prejudice if my home is sold at public auction on July 15th.

70. When the sale is concluded, the conveyance of the property will act as a complete

bar against my ownership rights in the property. See RPAPL § 1353(3).

71. Because my home is scheduled to be sold on July 15, 2016, I do not have time to

file this motion on notice.

72. I made a good faith effort to notify Plaintiff of this order to show cause.

73. On July 1, 2016, I called the offices of Plaintiff’s counsel at the number provided

on the complaint. During that call, I spoke with Sabrina Redman. I told Ms. Redman the index

number of the case and that I would be filing an emergency order to show cause on July 5, 2016

at 10 a.m. at Queens County Supreme Court.

74. I also requested a fax number to send a copy of the papers. Later in the afternoon

of July 1, 2016, I sent a copy of these papers by fax to (631) 982-4509.

WHEREFORE, I respectfully request that the Court issue an order:

1) cancelling the foreclosure sale scheduled for July 15, 2016;

2) vacating the ex parte Order of Reference entered on March 10, 2016;

3) vacating the ex parte Judgment of Foreclosure and Sale entered on May 17, 2016;

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4) canceling the sale of the subject property scheduled for July 15, 2016 at 10:00

a.m. in Courtroom 25 of the Queens County Courthouse, 88-11 Sutphin Blvd.,

Jamaica, NY;

5) compelling Plaintiff to accept a late answer;

6) deeming such answer, attached as Exhibit G, served;

6) waiving filing fees and allowing Ms. K to proceed as a poor person; and

7) granting such other and further relief as the Court may deem just and proper;

____________________________

Ms. K

Pro Se Defendant

Sworn before me on this

1st Day of July, 2016

___________________

Notary Public

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1

SUPREME COURT OF NEW YORK STATE

COUNTY OF KINGS

THE BANK OF NEW YORK MELLON FKA THE

BANK OF NEW YORK, AS TRUSTEE FOR THE

CERTIFICATEHOLDERS OF CWABS INC., ASSET-

BACKED CERTIFICATES, SERIES 2007-7

Plaintiff,

-against-

Ms. F, ET AL.

Defendants.

DEFENDANT MS. FULLER’S

OPPOSITION TO PLAINTIFF’S

MOTION FOR SUMMARY

JUDGMENT

Index No. REDACTED

STATE OF NEW YORK )

) ss.:


Ms. F, being duly sworn, declares and states:

1. My name is Ms. F. I am a named defendant in this action, and the owner of the

property in question.

2. I have resided in the property for twenty years. I currently live there with my two

children, both of whom have disabilities.

3. These papers were prepared with the assistance of an attorney admitted to practice

law in New York State.

4. I write this affidavit in opposition to Plaintiff’s motion for summary judgment.

5. The Court should Plaintiff’s motion for summary judgment because (1) Plaintiff

has not supplied admissible evidence sufficient to make out its prima facie case, (2) Plaintiff did

not comply with the Notice of Default provision of the mortgage, (3) Plaintiff has not shown that

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2

it had standing at the commencement of the case, (4) Plaintiff has not filed a proper certificate of

merit, and (5) Plaintiff is seeking to foreclose upon an unexecuted mortgage modification.

I. The Affidavit of Cynthia Wallace is Inadmissible Hearsay

6. In support of its motion for summary judgment, Plaintiff has submitted the

affidavit of Cynthia Wallace, an employee of Specialized Loan Servicing LLC (“SLS”).

7. In her affidavit, Ms. Wallace does not claim to be testifying from personal

knowledge, but instead states that she is familiar with SLS’s business records for the loans that it

services on behalf of Plaintiff.

8. However, for all activities that occurred before SLS began servicing the loan, Ms.

Wallace’s testimony does not fit within the business records exception for hearsay, and is

therefore inadmissible.

9. CPLR Rule 4518 governs the business records exception. To establish foundation

for business records and render her testimony admissible, Ms. Wallace must satisfy the three

requirements of CPLR Rule 4518: (1) that the business record was “made in the regular course of

any business,” (2) “it was the regular course of such business to make [the record],” and (3) the

record was made “at the time of the act, transaction, occurrence or event, or within a reasonable

time thereafter.” CPLR Rule 4518(a); People v. Kennedy, 113 A.D.2d 843, 845, 493 N.Y.S.2d

509, 511 (1985) (refusing to admit records after applying CPLR Rule 4518(a)); Sabatino v. Turf

House, Inc., 76 A.D.2d 945, 946, 428 N.Y.S.2d 752, 753 (3d Dep’t 1980) (to admit hearsay

under CPLR Rule 4518, “it must first be demonstrated that the author made the report in the

regular course of his business, and in order to lay this foundation, the proponent must call as a

witness someone with personal knowledge of the maker's business practices and procedures”)

(internal citations omitted).

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3

10. Here, Ms. Wallace has testified that he works at SLS and that she is familiar with

the records maintained for the Plaintiff. She states that those records are made at or near the time

of the occurrence and kept in regularly conducted business activity.

11. These statements provide sufficient foundation to conclude that Ms. Wallace may

testify about occurrences during the period of time in which SLS serviced the loan for the

Plaintiff without running afoul of the general prohibition on hearsay testimony.

12. However, Ms. Wallace does not limit his testimony to occurrences made while

SLS serviced the loan. Instead, Ms. Wallace testifies as to (1) Plaintiff’s possession of the note

prior to the commencement of the suit in 2013, (2) the alleged default on the loan in May 2012,

(3) the 30 day default notice sent by Bank of America in September 2011, (4) the RPAPL § 1304

notice sent by Bank of America in December 2012, and (5) the filing with New York Statement

Department of Financial Services in December 2012.

13. It is undisputed that SLS was not servicing the loan at those times. As recently as

April 2014, Plaintiff filed a Request for Judicial Intervention in which it stated that the loan was

servicing by Bank of America, N.A.

14. SLS had no involvement with the loan prior to April 2014. Accordingly, to testify

to the occurrence of events before that date, Ms. Wallace must be relying on records that were

not made by SLS or records created that were not created contemporaneously.

15. Unless she can show a personal familiMs.y with the prior servicer’s policies and

practices, Ms. Wallace cannot testify to the business records policies and practices of a company

that does not employ her. CPLR Rule 3212(b)( affidavit in support of a motion for summary

judgment “shall be by a person having knowledge of the facts”); Standard Textile Co. v. Nat'l

Equip. Rental, Ltd., 80 A.D.2d 911, 437 N.Y.S.2d 398 (1981) (affiant “was not a qualified

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4

witness to testify as to the record keeping of another entity”); Reiss v. Roadhouse Rest., 70

A.D.3d 1021, 1025, 897 N.Y.S.2d 450, 452 (App. Div. 2d Dep't 2010) (denying admissibility of

business records where witness was not an employee of the entity that created the document);

Lodato v. Greyhawk, 39 A.D.3d 494, 495, 834 N.Y.S.2d 239, 240 (App. Div. 2d Dep't 2007)

("the mere filing of papers received from other entities, even if they are retained in the regular

course of business, is insufficient to qualify the documents as business records because such

papers simply are not made in the regular course of business of the recipient"); Chase Bank USA,

NA v. Gergis, 31 Misc.3d 1241(A), 932 N.Y.S.2d 759, *3 (Civ. Ct. Kings Cty 2011) ("because

Mr. Lavergne never worked for Washington Mutual Bank, it defies logic that he would have

personal knowledge of Washington Mutual Bank's business practices and procedures").

16. Because Plaintiff relies entirely on Ms. Wallace’s testimony and Ms. Wallace’s

testimony is inadmissible hearsay, Plaintiff has not made its prima facie case and is not entitled

to summary judgment.

II. Plaintiff Has Not Provided a Satisfactory Notice of Default

17. My mortgage requires that in the event of default, Plaintiff must provide a written

Notice of Default before accelerating the debt and bringing a foreclosure action. See Mortgage ¶

22.

18. Plaintiff’s affidavit states that I defaulted by failing to make the payment due

May 1, 2012. Plaintiff’s affidavit also included a copy of the Notice of Default sent by Bank of

America. (Plaintiff’s reliance on the testimony of an SLS employee as to the sending of a notice

by Bank of America years before SLS’s involvement with the mortgage is problematic for the

reasons listed in Section I, supra.)

19. But, this Notice of Default is dated September 2, 2011 – over six months before

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5

the mortgage default. Plaintiff has offered no evidence that the mortgage was in default on

September 2, 2011.

20. Even if I was in default at that time and cured the default, Plaintiff would have

been required to issue a new notice of default after I re-defaulted on the loan. Mortgage ¶ 22.

III. Plaintiff Has Not Provided An Accurate Copy of the Note

21. A plaintiff in a foreclosure case meets its prima facie burden by “producing a

mortgage, the unpaid note, and evidence of default”. Wachovia Bank, Nat. Ass'n v. Carcano, 106

A.D.3d 724, 725, 965 N.Y.S.2d 516 (App. Div. 2d Dep’t 2013). In this case, Plaintiff has failed

to meet this burden because Plaintiff has failed to produce the note.

22. The note that Plaintiff has attached to its papers is stretched horizontally to the

extent that the alleged endorsements stamped on the Note are illegible.

23. This is problematic for two reasons: (1) the Court cannot determine whether or

not the Note is properly endorsed if the endorsement stamps are illegible, and (2) the document

is inadmissible because it does not accurately reproduce the original.

24. Under New York’s evidence laws, a reproduction is admissible as the original

only when copied in a form that “accurately reproduces . . . the original”. CPLR Rule 4539(a).

The copy of the Note provided by Plaintiff does not accurately reproduce the original, which was

printed on a full 8.5” x. 11” page and not stretched horizontally.

25. Additionally, as discussed in Section I, supra, Plaintiff is relying on testimony

from SLS to establish which entity had possession of the note years before the case was brought.

Such testimony is inadmissible hearsay.

IV. Plaintiff Has Not Filed a Proper Certificate of Merit

26. In residential foreclosure cases, the Plaintiff must file a certificate of merit with

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6

the Court. CPLR § 3012-b(a).

27. That certificate must be signed by the attorney for the plaintiff and certify that the

attorney has reviewed the facts of the case and found them to have merit. Id.

28. Additionally, the attorney must consult with a representative of the Plaintiff, and

the certificate must identify the representative with whom the attorney consulted. Id.

(certification must be “based on consultation with representatives of the plaintiff identified in the

certificate”) (emphasis added). (In the statute, the adjective “identified” must apply to the noun

“representative”, since the identity of the plaintiff is clear and need not be established in a

certificate.)

29. Here, Plaintiff’s certificate, signed by Erinn K. Prestidge, Esq. does not identify

the representative consulted. As a result, it does not comply with CPLR § 3012-b(a).

30. If a Plaintiff willfully fails to provide a proper certificate of merit, the court may

dismiss the Complaint. CPLR § 3012-b(e).

V. Plaintiff Is Seeking To Enforce Loan Modifications That Were Not Fully Executed.

31. Plaintiff has attached two alleged loan modifications both of which increase the

principal balance of the loan by capitalizing delinquent interest and fees into the principal

balance.

32. Because each modification increases the balance of the loan, Plaintiff is able to

charge interest on interest. However, neither of these loan modifications are properly signed.

33. The first modification is between Mr. F and Countrywide, but Countrywide did

not sign the modification. By the terms of the modification agreement, the modification was not

in effect unless and until it was executed by both parties.

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7

34. The second modification is between Mr. F and Bank of America, but Bank of

America did not sign the modification. By the terms of the modification agreement, the

modification was not in effect unless and until it was executed by both parties.

35. Plaintiff is relying on these modifications to calculate the amount due in the

complaint and also to set the amount owed in each of the notices. But, neither of these

modifications ever took legal effect.

36. As a result, the amount that Plaintiff claims as owed is inflated by charging

interest upon interest and the RPAPL 1304 notice is incorrect because it is based on a

modification that was never given legal effect.

37. For all of these reasons, Plaintiff’s motion for summary judgment should be

denied.

_______________________

Ms. F

Sworn before me this

2nd day of February, 2017

____________________

Notary Public

134

1


SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF KINGS

BANK OF NEW YORK MELLON AS

TRUSTEE,

Plaintiff,

-against-

MR. N, ET AL.

Defendants.

DEFENDANT MR. N’S AFFIDAVIT IN

OPPOSITION TO PLAINTIFF’S MOTION


Index No. REDACTED

STATE OF NEW YORK )

) ss.:


Mr. N, being duly sworn, declares and states:

1. My name is Mr. N. I am a named defendant to this action.

2. I reside at the property that is the subject of this lawsuit.

3. I write this affidavit in opposition to Plaintiff’s Motion for Summary Judgment.

Plaintiff should be denied summary judgment because it has failed to make its prima facie case,

it failed to show that it has standing and its affidavits show that it failed to comply with RPAPL

§ 1304.

4. Given Plaintiff’s failure to meet its prima facie burden, the Court should exercise

its discretion to award summary judgment in my favor. See CPLR R. 3212(b) (“If it shall appear

that any party other than the moving party is entitled to a summary judgment, the court may

grant such judgment without the necessity of a cross-motion.”)

Plaintiff Failed to Submit Admissible Evidence to Meet its Prima Facie Burden.

5. Plaintiff failed to meet its prima facie burden because its papers fail to

authenticate any of its evidence.

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2


6. Plaintiff’s affiant Sherry Dvon Davis submitted an affidavit in support of

Plaintiff’s motion (“Davis Affidavit” or “Davis Aff.”). In the affidavit Ms. Davis references the

following exhibits:

a. Exhibit 1 – Copies of the Note, Mortgage and Loan Modification (Davis Aff. ¶ 5);

b. Exhibit 2 – A schedule of indebtedness (Davis Aff. ¶ 8);

c. Exhibit 3 – A notice of default dated March 7, 2011 (Davis Aff. ¶ 9); and

d. Exhibit 4 – 90 day notice (Davis Aff. ¶ 14).

7. However, Plaintiff’s papers do not include Exhibits 1 through 4. Plaintiff’s

papers have no numerically indicated exhibits.

8. Moreover, this is not a mere problem of transposition (in which Exhibit 1 is

marked as Exhibit A, Exhibit 2 as Exhibit B, and so forth). The schedule of indebtedness and

notice of default dated March 7, 2011 that Ms. Davis describes as Exhibits 2 and 3, respectively

are absent entirely. The note, mortgage and loan modification are not included as a separate

exhibit but merely included as attachments to the summons and complaint.

9. A copy of a document that resembles a 90 day notice is attached as Exhibit D, but

“Exhibit D” is not referenced in either the Davis Affidavit or in the Affirmation of Christopher

Ahern (“Ahern Affirmation” or “Ahern Aff.”).

10. Based on the large discrepancy between Ms. Davis’s description of the exhibits to

her affidavit and the actual exhibits provided to the Court, Ms. Davis appears to have sworn her

affidavit without viewing any of the exhibits that Plaintiff’s counsel has attached to it.

Plaintiff Has Not Shown That It Has Standing, So Summary Judgment Must Be Denied.

11. Plaintiff has not shown that it has standing because: (1) Plaintiff’s copy of the

note of is not admissible, and (2) the copy of the note provided is not accurate.

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3


12. First, as discussed in Paragraphs 6-8, supra, Plaintiff’s affiant did not authenticate

a copy of the note or mortgage. Instead, Plaintiff is relying entirely on copy of the note attached

as an exhibit to the complaint. (See Pl.’s Ex. A.)

13. This is unacceptable because the Complaint is not a sworn document. A motion

for summary judgment must be proven with admissible evidence. Alvord & Swift v. Stewart M.

Muller Const. Co., 46 N.Y.2d 276, 281, 385 N.E.2d 1238, 1241 (1978) (“plaintiff was obliged to

produce evidence, not just unsubstantiated allegations or assertions”). A complaint is only

admissible if it is verified. See CPLR § 105(u). Here, Plaintiff’s Complaint is not verified. (See

Pl.’s Ex. A.) Accordingly, Plaintiff cannot rely on the attachments to the Complaint to carry its

burden at the summary judgment stage.

14. Second, the note attached to the Complaint simply does not accurately reproduce

the original. Under New York’s evidence laws, a reproduction is admissible as the original only

when copied in a form that “accurately reproduces . . . the original”. CPLR Rule 4539(a). Here,

Plaintiff has produced a supposed copy of the note that is shrunk down and distorted – the

language of the note takes up about half of the page’s length. (See Pl.’s Ex. A, pp. 23-26.)

15. I know that the note attached to the Complaint does not accurately reproduce the

original note because I did not sign a distorted note that took up only half of the length of the

page. To the extent that Plaintiff claims that I signed a note identical to the note attached to the

Complaint, I dispute this fact based on my personal knowledge as a signer of the document at

issue.

Plaintiff’s Evidence Shows That Its RPAPL § 1304 Notice was Defective.

16. The Davis Affidavit shows that Plaintiff’s RPAPL § 1304 notice was inaccurate

as to the mailing date.

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4


17. According to the Davis Affidavit, Plaintiff mailed the RPAPL § 1304 notices on

July 3, 2014. (Davis Aff. ¶ 12.)

18. But, the (completely unauthenticated) notice attached to Plaintiff’s motion is

dated July 2, 2014. (Pl.’s Ex. D.)

19. As a result, the mailing date on the notice was incorrect.

20. Because the ninety day period in the RPAPL § 1304 notice runs from the date of

mailing, a misrepresentation in the date of mailing is a substantive misrepresentation that serves

to defeat the purpose of the notice.











23. Because this notice was clearly inaccurate, Plaintiff cannot prevail in this suit.

____________________________

Mr. N

Pro Se Defendant

Sworn before me on this

1st Day of November, 2016

138

5


___________________

Notary Public

139

1

Prepared with the assistance of counsel admitted to practice in New York State


County of Kings

Federal National Mortgage Association,

Plaintiff,

-against-

Mr. R, et al.

Defendants.

DEFENDANT MR. R’s OPPOSITION TO

PLAINTIFF’S MOTION FOR

SUMMARY JUDGMENT

Index No. REDACTED

STATE OF NEW YORK )

) ss.:


Mr. R, being duly sworn, declares and states:

1. My name is Mr. R. I am a named defendant in this action, and I submit this

affidavit in opposition to Plaintiff’s Motion for Summary Judgment.


3. Summary judgment should not be granted in this case because (1) Plaintiff has

failed to comply with its discovery obligations, (2) Plaintiff has not made the prima facie

showing necessary to obtain summary judgment and (3) triable issues of fact remain.

I. Plaintiff’s Motion for Summary Judgment Should Be Denied Pursuant to CPLR Rule

3212(f) Because It Has Not Responded to Discovery Requests

4. Where it appears “that facts essential to justify opposition may exist but cannot then

be stated, the court may deny the motion or may order a continuance to permit affidavits to be

obtained or disclosure to be had and may make such other order as may be just.” CPLR Rule

3212(f); see, e.g., Olmedo-Garcia v. Dobson, 31 A.D.3d 727, 728, 820 N.Y.S.2d 92, 93 (App. Div.

2d Dep’t 2006).

5. Accordingly, if a key fact at issue is in the exclusive knowledge of the moving

party, summary judgment will ordinarily be denied. See Morris v. Hochman, 296 A.D.2d 481, 482,

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2


745 N.Y.S.2d 549, 550 (App. Div. 2d Dep’t 2002) (plaintiff's motion denied because it “was made

before the defendants had any opportunity to conduct discovery, and there are essential issues of

fact which are within her exclusive knowledge”); Plaza Investments v. Kim, 208 A.D.2d 704, 617

N.Y.S.2d 496, 497 (App. Div. 2d Dep’t 1994) (summary judgment not warranted when “the

plaintiff's motion was made before any discovery was conducted, and many of the essential issues

of fact in this case are solely within the knowledge of the plaintiff”).

6. Here, Plaintiff has moved for summary judgment relying almost entirely on

business records within its sole possession. Moreover, Plaintiff has done so while failing to

respond to my requests for production of documents.

7. On December 15, 2015, I propounded a request for production of documents

pursuant to CPLR R. 3120. A true and accurate copy of these requests including the affidavit of

service is attached as Exhibit 1.

8. Plaintiff never responded to these requests.

9. The discovery at issue requested documents that would be useful to oppose

Plaintiff’s motion. For example, the documents requested included the loan file, a payment history

and all documents related to the sale or assignment of the loan.

10. Plaintiff cannot improperly refuse to provide relevant evidence and information,

and then contend that there are no triable issues of fact. Rosa v. Colonial Transit, Inc., 276 A.D.2d

781, 781, 715 N.Y.S.2d 426, 427 (App. Div. 2d Dep’t 2000) (“award of summary judgment would

be inappropriate” where movant failed to provide evidence); Soto v. City of Long Beach, 197

A.D.2d 615, 616, 602 N.Y.S.2d 691, 692 (App Div. 2d Dep’t 1993) (where movant “had failed to

comply with its discovery obligations, the motion was premature”); Nodelman v. L.C.V. Realty

Corp., 143 A.D.2d 122, 122, 531 N.Y.S.2d 362, 364 (App. Div. 2d Dep’t 1988) (“facts essential

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to oppose the cross motion may exist but could not be stated by the plaintiffs because of [cross-

movant’s] failure to comply with certain discovery requests made by the plaintiffs”).

11. Plaintiff cannot obtain summary judgment unless and until it has complied with its

discovery obligations. Because Plaintiff has not complied with those obligations, Plaintiff’s

motion must be denied.

II. Plaintiff’s Motion for Summary Judgment Should Be Denied Because Plaintiff Has

Not Made Its Prima Facie Case in its Papers

A. Plaintiff Has Not Made Its Prima Facie Case Because Its Proof of Default

Relies Entirely on Inadmissible Hearsay Evidence

12. Plaintiff relies entirely on the testimony of its affiant, Amy Gauthier. Ms. Gauthier

is an employee of the mortgage servicer, Seterus, Inc. (“Seterus”). (Gauthier Aff. ¶ 1.)

13. In her affidavit, Ms. Gauthier does not rely on her own person knowledge, but

instead relies entirely on Seterus’s business records. (Id.) Ms. Gauthier states that she is familiar

with the business records made and maintained by Seterus. (Id. at ¶ 2.)

14. However, Ms. Gauthier testifies to events, occurrences and transactions that took

place before Seterus serviced my loan. Her testimony as to these events is inadmissible hearsay.


for business records and render this hearsay admissible, Ms. Gauthier must satisfy the three






House, Inc., 76 A.D.2d 945, 946, 428 N.Y.S.2d 752, 753 (3d Dep’t 1980) (to admit hearsay under

CPLR Rule 4518, “it must first be demonstrated that the author made the report in the regular

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course of his business, and in order to lay this foundation, the proponent must call as a witness

someone with personal knowledge of the maker's business practices and procedures”) (internal

citations omitted).

16. Here, Ms. Gauthier testifies that she is familiar with the records maintained for

Plaintiff. (Gauthier Aff. ¶ 2.) She also states that those records are made at or near the time of the

occurrence and kept as part of Plaintiff’s regularly conducted business activity. (Id.)

17. These statements provide sufficient foundation for Ms. Gauthier to testify about

occurrences during the period of time in which Seterus serviced the loan for Plaintiff without

running afoul of the general prohibition on hearsay testimony.

18. However, Ms. Gauthier does not limit her testimony to that timeframe. Instead, Ms.

Gauthier testifies that Defendants breached the obligation by failing to “tender the installment

which became due and payable on January 1, 2009”. (Gauthier Aff. ¶ 8.)

19. At that time, Bank of America serviced the loan, not Seterus. In fact, Seterus was

not even licensed to do business in New York State as of January 1, 2009.

20. Ms. Gauthier states that “[t]o the extent that the business records were created by

prior holders and/or servicers of said loan, those records have been integrated into Seterus, Inc.’s

business records”. (Gauthier Aff. ¶ 2.)

21. However, Ms. Gauthier cannot testify to another entity’s business records simply

because Seterus uses those records. Lodato v. Greyhawk, 39 A.D.3d 494, 495, 834 N.Y.S.2d 239,

240 (App. Div. 2d Dep't 2007) ("the mere filing of papers received from other entities, even if they

are retained in the regular course of business, is insufficient to qualify the documents as business

records because such papers simply are not made in the regular course of business of the

recipient").

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22. Unless she can show a personal familiarity with the prior servicer’s policies and

practices, Ms. Gauthier cannot testify to the business records policies and practices of a company

that does not employ her. CPLR Rule 3212(b)(affidavit in support of a motion for summary


Equip. Rental, Ltd., 80 A.D.2d 911, 437 N.Y.S.2d 398 (1981) (affiant “was not a qualified witness

to testify as to the record keeping of another entity”); Reiss v. Roadhouse Rest., 70 A.D.3d 1021,

1025, 897 N.Y.S.2d 450, 452 (App. Div. 2d Dep't 2010) (denying admissibility of business records

where witness was not an employee of the entity that created the document); Chase Bank USA, NA

v. Gergis, 31 Misc.3d 1241(A), 932 N.Y.S.2d 759, *3 (Civ. Ct. Kings Cty 2011) ("because Mr.

Lavergne never worked for Washington Mutual Bank, it defies logic that he would have personal

knowledge of Washington Mutual Bank's business practices and procedures").

23. Because Plaintiff relies entirely on Ms. Gauthier’s affidavit to establish that the

mortgage is in default, and Ms. Gauthier’s testimony on that issue is inadmissible, Plaintiff has not

made its prima facie case and is not entitled to summary judgment.

24. In addition to its substantive deficiencies, Mr. Gauthier’s affidavit is also

inadmissible because it is an out of state affidavit that is not accompanied by a certificate of

conformity. CPLR § 2309(c).

B. Plaintiff Has Not Made Its Prima Facie Case Because It Failed to Provide a

Legible and Admissible Copy of the Mortgage

25. A plaintiff in a foreclosure case meets its prima facie burden by “producing a

mortgage, the unpaid note, and evidence of default”. Wachovia Bank, Nat. Ass'n v. Carcano, 106

A.D.3d 724, 725, 965 N.Y.S.2d 516 (App. Div. 2d Dep’t 2013). In this case, Plaintiff has failed to

meet this burden because Plaintiff has failed to produce a mortgage.

26. Plaintiff is suing upon a Consolidation, Extension and Modification Agreement

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(“CEMA”). (King Aff. ¶ 15.) The CEMA is included as pages 6 through 37 of Plaintiff’s Exhibit

D. This CEMA is completely illegible and inadmissible.

27. The illegibility of the CEMA creates several problems for Plaintiff.

28. First, this Court cannot determine whether or not the CEMA has been breached

without knowing the terms of the CEMA. Whole paragraphs and pages are missing. (See, e.g.,

Pl.’s Ex. D, pp. 6-7, 11, 16, 21, 26-28, 34.)

29. Second, the document is inadmissible because it does not accurately reproduce the

original. Under New York’s evidence laws, a reproduction is admissible as the original only when

copied in a form that “accurately reproduces . . . the original”. CPLR Rule 4539(a). The copy of

the CEMA provided by Plaintiff does not accurately reproduce the original.

30. I know that the CEMA attached to Plaintiff’s papers does not accurately reproduce

the original CEMA because I did not sign an illegible CEMA. To the extent that Plaintiff claims

that I signed a CEMA that matches the CEMA included in Exhibit D (with illegible pages and

paragraphs), I dispute this fact based on my personal knowledge as a signer of the document at

issue.

31. Third, Plaintiff cannot prove the terms of the CEMA by evidence aside from the

CEMA itself. To prevail in its foreclosure action, Plaintiff must prove the terms of the mortgage

that has allegedly been breached. Under the best evidence rule, Plaintiff must make that proof

through production of the original writing or an accurately reproduced copy. See Lipschitz v. Stein,

10 A.D.3d 634, 637, 781 N.Y.S.2d 773, 777 (App. Div. 2d Dep’t. 2004).

32. Because Plaintiff has not provided the original mortgage or a copy that accurately

reproduces the original, Plaintiff has not met its burden of production.

C. Plaintiff Has Failed to Show Compliance with a Condition Precedent Because

the Notice of Default Required by the Mortgage Was Not Sent To Me

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33. My mortgage requires that a notice of default be sent before the lender can initiate

a foreclosure action. (Mortgage1 ¶ 22 (“Lender may require Immediate Payment in Full under this

Section 22 only if all of the following conditions are met . . . Lender sends to me in the manner

described in Section 15 of this Security Instrument a notice”); see also King Aff. ¶ 18 (referring

to required default notice)).

34. The Gauthier Affidavit states that the “demand for payment of the mortgage arrears

was made by correspondence dated May 12, 2011” and that this “notice was mailed to the

Borrowers by first class mail at the Borrowers’ last known address.” (Gauthier Aff. ¶ 9.)

35. The notice of default is included in Plaintiff’s Exhibit F as pages 2 through 8. This

notice however is not addressed to me at my home address.

36. Instead, the notice was sent to Sanford Solny, Esq., 3813 13th Ave 3rd Floor,

Brooklyn, NY 11218.

37. Mr. Solny represented in a case arising from my second mortgage, and he was

authorized to receive information about this mortgage. But, I never told my servicer that his

address was my address. Therefore, Ms. Gauthier’s statement is plainly false because the address

to which the notice was sent was not my last known address.

38. Unfortunately, Paragraph 15 of the Mortgage, which deals with the manner in

which notices may be given, is mostly unintelligible. I can make out a phrase that says “The notice

address is the address of the Property”, but the rest of that sentence is illegible.

39. Nowhere in Paragraph 15 can I see a clause authorizing the Plaintiff to send notice

1 As discussed in Section II.B, supra, the mortgage in this case is part of a CEMA. The mortgage

is attached as an exhibit to the CEMA, and included in pages 20 through 37 of Plaintiff’s Exhibit

D. Although large portions of the mortgage are illegible, this provision regarding pre-foreclosure

notices is mostly intact.

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to a third party, and Ms. Gauthier’s affidavit suggests that the notice must be sent the borrowers’

last known address.

40. Because Plaintiff cannot show that a notice of default was properly sent pursuant

to the mortgage, Plaintiff has not shown that it met the conditions precedent for foreclosure.

D. Plaintiff Has Failed to Prove Standing Because The Purported Allonge

Plaintiff Has Produced is Clearly Not Attached to the Note

41. Where, as here, standing has been raised as a defense, the “plaintiff must prove its

standing in order to be entitled to relief”. Bank of New York v. Silverberg, 86 A.D.3d 274, 279,

926 N.Y.S.2d 532 (App. Div. 2d Dep’t 2011) (citing U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752,

753, 890 N.Y.S.2d 578 (App. Div. 2d Dep’t 2009); Wells Fargo Bank Minn., N.A. v Mastropaolo,

42 A.D.3d 239, 242, 837 N.Y.S.2d 247 (App. Div. 2d Dep’t 2007)). To show standing, the plaintiff

must show “it is both the holder or assignee of the subject mortgage and the holder or assignee of

the underlying note at the time the action is commenced”. Silverberg, 86 A.D.3d 274, 279, 926

N.Y.S.2d 532 (internal citations omitted).

42. A person becomes a holder of a note through endorsement of that note. U.C.C. §

3-202. Any endorsement of the note “must be written . . . on the instrument or on a paper so firmly

affixed thereto as to become a part thereof”. U.C.C. § 3-202(2).

43. Here, the alleged endorsement is on a separate piece of paper: a purported allonge.

See U.C.C. § 3-202, cmt. 3 (defining allonge). If the allonge is not firmly affixed to the Note, then

it is ineffective. Id.; HSBC Bank USA, N.A. v. Thomas, 46 Misc.3d 429, 432, 999 N.Y.S.2d 671,

674 (Sup. Ct. Kings Cty. 2014) (“The endorsement must be made either on the face of the note or

on an allonge so firmly affixed to the note as to become a part thereof.”).

44. The note, including purported allonge, is included as pages 1 through 4 of Plaintiff’s

Exhibit D. Pages 1 through 3 are fairly pristine copies, with a minimal amount of copier noise

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along the edges of the page. Page 4, the purported allonge, is almost completely dark with copier

noise.

45. Because of the difference in copier noise, the allonge cannot have possibly been

scanned or copied at the same time as the rest of the note. Plaintiff has clearly merged together

two separate documents: a clean copy of the note itself and a heavily degraded image of a supposed

allonge. This merged image does not accurately reproduce any original document actually in

existence and is therefore inadmissible. See CPLR Rule 4539(a).

III. Plaintiff Should be Denied Summary Judgment Because Triable Issues of Fact

Remain

A. The Allonge Provided By Plaintiff Conflicts with Documents Provided By My

Servicer and Publicly Available Information

46. In 2010, I requested a copy of the note for my mortgage from my servicer, Bank of

America.

47. In a letter dated June 1, 2010, Bank of America provided a copy of the note

complete with an allonge.

48. A true and accurate copy of the note provided by Bank of America is attached as

Exhibit 2.

49. This allonge endorses the note to GreenPoint Mortgage Funding, Inc., but does not

include a further endorsement in blank. As a result, the note as provided by Bank of America in

June 2010 was still payable to GreenPoint Mortgage Funding, Inc. U.C.C. § 3-202(1).

50. However, the Plaintiff and purported owner of the note is Fannie Mae.

51. Plaintiff may claim that Fannie Mae took ownership after June 1, 2010 and the loan

was subsequently endorsed in blank. However, this claim contradicts Fannie Mae’s own policies.

52. Fannie Mae has publicly available policies stating under what conditions it buys

loans. These conditions are provided in its Selling Guide, available at

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https://www.fanniemae.com/content/guide/sel072616.pdf.

53. Section B.2-1.4-02 describes what mortgage loans are eligible for purchase by

Fannie Mae. Pages 256 through 258 describe Fannie Mae’s policies on purchase of “seasoned

mortgages”, meaning mortgages that are over one year old as of the purchase date. Fannie Mae

only allows purchase of these mortgages if “The borrower has not had a 30-day delinquency in the

12-month period that precedes the lender’s delivery of the mortgage to Fannie Mae.”

54. According to the Gauthier Affidavit, the loan has been in default since January 1,

2009. (Gauthier Aff. ¶ 8.) This means that per Fannie Mae’s publicly available policies, Plaintiff

would not have purchased this loan after June 1, 2010, when it would have been in default for at

least eighteen months.

55. A party admission that the note would not have been eligible for purchase by Fannie

Mae after June 1, 2010 along with an allonge showing that Fannie Mae did not own the note as of

June 1, 2010 create a triable question of fact as to whether or not Fannie Mae did in fact acquire

the note as an exception to its general policies.

B. The Note Included in Plaintiff’s Exhibit D Does Not Match the Note Attached

as an Exhibit to the CEMA

56. The CEMA that I signed with Plaintiff includes a copy of the consolidated note.

See CEMA ¶ III (“[illegible] . . . attached to the Agreement as Exhibit C The Consolidated Note

contains the . . . [illegible]”). This copy of the consolidated note, as attached to the CEMA, is

included as pages 16 through 18 of Plaintiff’s Exhibit D.

57. The signature on the Consolidated Note is visibly different than the signature on

the note that Plaintiff claims to possess. Compare Pl.’s Ex. D, p. 3 with Pl.’s Ex. D p. 18. The

discrepancy is most clearly seen by examining the placement of the R in my signature. On Page

18 of Exhibit D, the R dips below the signature line. This does not happen on the version included

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as Page 3 of Exhibit D.

58. Because the note is a negotiable instrument that can be assigned by transfer of

physical possession, it would not have been executed in duplicate originals because multiple notes

would create multiple debts.

59. The existence of at least two purported notes is sufficient evidence that a question

of fact remains with regards to Plaintiff’s standing to bring this suit. Additionally, Courts have

dismissed cases for lack of standing where the plaintiff provides a different note later in a

foreclosure action without any explanation. See Deutsche Bank Nat. Trust Co. v. Barnett, 88

A.D.3d 636, 638, 931 N.Y.S.2d 630, 631 (App. Div. 2d Dep’t 2011) (summary judgment denied

where the “plaintiff submitted copies of two different versions of an undated allonge”); Assets

Recovery 26, LLC v. Rivera, 39 Misc.3d 1240(A), 975 N.Y.S.2d 364 (Sup. Ct. Richmond Cty

2013) (holding that plaintiff “failed to demonstrate to the satisfaction of the [c]ourt that said

allonge was executed and/or the note delivered to the original plaintiff prior to the

commencement…” where plaintiff first presented the allonge late in the case).

IV. Conclusion

60. For the forgoing reasons, I request that Plaintiff’s motion for summary judgment

be denied. Because Plaintiff has failed to make its prima facie case, I request that the Court exercise

its discretion to dismiss the case pursuant to CPLR R. 3212(b). In the alternatively, I request that

Plaintiff be barred from re-filing a motion for summary judgment until it can show that it has

complied with its obligation to comply with my discovery requests.

_______________________

Mr. R


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22nd day of August, 2016

____________________

Notary Public

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1

Prepared with assistance of counsel admitted to practice in New York State


County of Queens

U.S Bank, N.A.,

Plaintiff,

-against-

Ms. E, et al.

Defendants.

OPPOSITION TO PLAINTIFF’S MOTION


Index No. REDACTED

STATE OF NEW YORK )

) ss.:


Ms. E, being duly sworn, declares and states:

1. My name is Ms. E. I am a named defendant in this action.


3. I write this in opposition to Plaintiff’s motion for summary judgment.

Plaintiff Is Seeking To Maintain The Suit Under The Name Of A Nonexistent Entity

4. Plaintiff has requested that the caption be altered to record “U.S. Bank Nation

Trust, N.A., as Trustee for LSF9 Master Participation Trust” as the Plaintiff in this action. See

Malekan Aff. ¶ 18; Notice of Motion.

5. The abbreviation “N.A.” is used to indicate that an entity is a national bank

chartered and supervised by the Office of the Comptroller of the Currency.

6. However, “U.S. Bank Nation Trust” is not the name of any National Association

registered with the Office of the Comptroller of the Currency.1 U.S. Bank Nation Trust, N.A.,

therefore does not exist as a legal entity. It cannot act as a trustee or maintain a suit.

1 Indices of all national banks are available on the OCC’s website at

http://www.occ.treas.gov/topics/licensing/national-bank-lists/index-active-bank-lists.html.

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7. Because I have placed at issue Plaintiff’s standing to conduct the suit, the identity

of the entity maintaining the suit is material to the case. As a result, Plaintiff’s attempt to

maintain an action as a nonexistent entity cannot be corrected or disregarded. CPLR § 2001.

8. Because of its lack of clarity as to who is maintaining this suit, Plaintiff’s motion

must be denied.

The Affidavit of David Nilsen Consists Largely of Inadmissible Hearsay

9. My mortgage was originally insured by FHA, a division of HUD. At the outset of

this case, in February 2013, U.S. Bank, N.A. brought suit, claiming to be the holder of the loan.

At that time, U.S. Bank Home Mortgage was the servicer of my loan.

10. In 2014, my loan was purchased by HUD and sold at auction through HUD’s

DASP program. According to Plaintiff’s papers, U.S. Bank Nation Trust, N.A., as Trustee for

LSF9 Master Participation Trust is now the owner of the loan. But see Paragraphs 4-6, supra.

11. After the loan was sold through the DASP program in 2014, Caliber Home Loans,

Inc. became the new servicer of the loan.

12. Plaintiff has submitted as evidence the Affidavit of David Nilsen (“Nilsen Aff.”).

13. Mr. Nilsen is an employee of Caliber Home Loans, Inc. and states that he is

“familiar with business records maintained for the purpose of servicing U.S. Bank Trust, N.A. as

Trustee for LSF9 Master Participation Trust’s mortgage loans”. Nilsen Aff. ¶¶ 1-2.

14. This is problematic for two reasons: (1) Mr. Nilsen is speaking about the business

records concerning loans owned by U.S. Bank Trust, N.A., rather than U.S. Bank Nation Trust,

N.A.; and (2) Mr. Nilsen is relying on inadmissible business records for all information pre-

2014.

15. First, as discussed in Paragraphs 4-6, supra, Plaintiff’s papers are in conflict as to

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the identity of the proper party to maintain this foreclosure. As a result, Mr. Nilsen has offered

evidence suggesting that US Bank Trust, N.A. owns the note and mortgage in its capacity as

trustee, even as Plaintiff’s counsel requests that this court modify the caption to make US Bank

Nation Trust, N.A. the Plaintiff of record.

16. Second, for all activities that occurred before Caliber Home Loans, Inc. began

servicing the loan, Mr. Nilsen’s testimony does not fit within the business records exception to

hearsay.


for business records and render this hearsay admissible, Mr. Nilsen must satisfy the three






House, Inc., 76 A.D.2d 945, 946, 428 N.Y.S.2d 752, 753 (3d Dep’t 1980) (to admit hearsay

under CPLR Rule 4518, “it must first be demonstrated that the author made the report in the

regular course of his business, and in order to lay this foundation, the proponent must call as a

witness someone with personal knowledge of the maker's business practices and procedures”)

(internal citations omitted).

18. Here, Mr. Nilsen has testified that he works at Caliber Home Loans, Inc. and that

he is familiar with the records maintained for “U.S. Bank Trust, N.A. as Trustee for LSF9 Master

Participation Trust’s mortgage loans”. Nilsen Aff. ¶¶ 1-2. He states that those records are made

at or near the time of the occurrence and kept in regularly conducted business activity. Nilsen

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Aff. ¶ 2.

19. These statements provide sufficient foundation to conclude that Mr. Nilsen may

testify about occurrences during the period of time in which Caliber Home Loans, Inc. serviced

the loan for U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust without

running afoul of the general prohibition on hearsay testimony.

20. However, Mr. Nilsen does not limit his testimony to occurrences made while

Caliber Home Loans, Inc. serviced the loan for U.S. Bank Trust, N.A. as Trustee for LSF9

Master Participation Trust. Instead, Mr. Nilsen testifies as to (1) delivery of the Note in October

2009, (2) the alleged default on the loan in July 2012, (3) the 30 day default notice sent in

September 2012, (4) the RPAPL § 1304 notice sent in July 2012, and (5) the filing with New

York Statement Department of Financial Services in July 2012. See Nilsen Aff. ¶ 4-9.

21. It is undisputed that Caliber Home Loans, Inc. was not servicing my loan at those

times, and that U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust did not

own the loan at those times. Accordingly, Mr. Nilsen must be relying on records that were not

made by Caliber Home Loans, Inc. or records created that were not created contemporaneously.

22. Unless he can show a personal familiarity with the prior servicer’s policies and

practices, Mr. Nilsen cannot testify to the business records policies and practices of a company

that does not employ him. CPLR Rule 3212(b)( affidavit in support of a motion for summary


Equip. Rental, Ltd., 80 A.D.2d 911, 437 N.Y.S.2d 398 (1981) (affiant “was not a qualified

witness to testify as to the record keeping of another entity”); Reiss v. Roadhouse Rest., 70

A.D.3d 1021, 1025, 897 N.Y.S.2d 450, 452 (App. Div. 2d Dep't 2010) (denying admissibility of

business records where witness was not an employee of the entity that created the document);

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Lodato v. Greyhawk, 39 A.D.3d 494, 495, 834 N.Y.S.2d 239, 240 (App. Div. 2d Dep't 2007)

("the mere filing of papers received from other entities, even if they are retained in the regular

course of business, is insufficient to qualify the documents as business records because such

papers simply are not made in the regular course of business of the recipient"); Chase Bank USA,

NA v. Gergis, 31 Misc.3d 1241(A), 932 N.Y.S.2d 759, *3 (Civ. Ct. Kings Cty 2011) ("because

Mr. Lavergne never worked for Washington Mutual Bank, it defies logic that he would have

personal knowledge of Washington Mutual Bank's business practices and procedures").

23. Because Plaintiff relies entirely on Mr. Nilsen’s testimony and Mr. Nilsen’s

testimony is inadmissible hearsay, Plaintiff has not made its prima facie case and is not entitled

to summary judgment.

24. In addition to its substantive deficiencies, Mr. Nilsen’s affidavit is also

inadmissible because it is an out of state affidavit that is not accompanied by a certificate of

conformity. CPLR § 2309(c).

Plaintiff Has Provided Inaccurate and Ineffective RPAPL § 1304 Notices

25. Plaintiff has provided inaccurate pre-foreclosure notices.

26. The RPAPL § 1304 notice attached as Plaintiff’s Exhibit K is dated July 20, 2012.

It states that I am 49 days in default and must pay $8,342.13 by August 19, 2012 to avoid

foreclosure. I believe that $8,342.13 is roughly equal to three monthly payments including

principal, interest, taxes and insurance.

27. But, according to the Nilsen Affidavit, I defaulted “by failing to pay the monthly

mortgage payments which became due on July 01, 2012”. Nilsen Aff. ¶ 5.

28. Based on the Nilsen Affidavit, I should have only been 19 days in default as of

July 20, 2012 and I should have only been required to pay two monthly payments by August 19,

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2012 to cure the default.











31. Because Plaintiff’s RPAPL § 1304 notice is inaccurate as to the date of default

and amount required to reinstate the mortgage, it is legal insufficient and Plaintiff cannot receive

summary judgment.

Plaintiff Has Not Shown that It Complied With HUD’s Servicing Standards

32. Mortgagees are required to follow FHA’s servicing guidelines, including its loss

mitigation standards. 24 C.F.R. § 203.500 (“…failure to comply will be cause for imposition of a

civil money penalty, including a penalty under § 30.35(c)(2), or withdrawal of HUD's approval

of a mortgagee.”). These regulations are also incorporated by reference in my loan documents.

33. Under Paragraph 9(d) of the Mortgage, the Lender cannot accelerate the loan or

foreclose if not permitted by the Regulations of the HUD Secretary. Additionally, Paragraph

6(b) of the Note explicitly states that it “does not authorize acceleration when not permitted by

HUD regulations.”

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34. Under HUD’s regulations, “[t]he mortgagee must have a face-to-face interview

with the mortgagor, or make a reasonable effort to arrange such a meeting, before three full

monthly installments due on the mortgage are unpaid.” 24 C.F.R. § 203.604(b).

35. A reasonable effort is defined as at least one letter, and one trip to see a mortgagor

at the mortgagor's property. 24 C.F.R. § 203.604(d).

36. Plaintiff did not comply with these requirements.

37. In its papers, Plaintiff relies on (1) a denial letter dated February 15, 2013 and (2)

failure to obtain a loan modification during the settlement conference part. Malekan Aff. ¶ 56.

38. In the papers as served upon me, Plaintiff’s Exhibit O is lacking pages, leaving it

both without a date and without content. A true and accurate copy of Plaintiff’s Exhibit O as

served upon me is attached as Exhibit 1.

39. Even if Plaintiff’s Exhibit O was complete and contained the statements described

in the Malekan Affirmation, it would still be inadmissible. Exhibit O is completely

unauthenticated. It is only attached in the attorney’s affirmation; it is never described in the

Nilsen Affirmation.

40. There is no testimony from someone having knowledge of the facts that this letter

is accurate or was sent to me. See CPLR Rule 3212(b) (affidavit in support of a motion for

summary judgment “shall be by a person having knowledge of the facts”); Zuckerman v. City of

New York, 49 N.Y.2d 557, 563, 427 N.Y.S.2d 595, 598 (1980) (affirmation of attorney “who

demonstrated no personal knowledge” is “without evidentiary value and thus unavailing”).

41. Plaintiff’s facts regarding the settlement conference part is irrelevant. As stated in

Paragraphs 32-35, Compliance with HUD’s regulations is a pre-condition to acceleration.

Plaintiff cannot satisfy those conditions after the filing the suit.

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42. For the reasons above, I request that the Court deny Plaintiff’s motion for

summary judgment.

_______________________

Ms. E

Pro Se Defendant


8th day of July, 2016

____________________

Notary Public

159

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