Real Property Actions and Proceedings Law ("RPAPL") Section 1304 ("Required prior notices"), as enacted by Chapter 472 of the Laws of 2008 effective September 1, 2008, and as amended by Chapter 507 of the Laws of 2009, requires a lender, an assignee or a mortgage loan servicer to provide a borrower who is a natural person, at least 90 days before commencing a legal action against property improved by a 1-4 family dwelling, a statutory form of "You Could Lose Your Home" notice. The notice is to be sent to the borrower by registered or certified mail and by regular mail.
The Supreme Court, Westchester County, granted a foreclosing mortgagee's motion for summary judgment and denied the Defendants-mortgagors' cross-motion to dismiss the complaint. The Appellate Division, Second Department, reversed, holding that proper service of the RPAPL Section 1304 notice is a condition precedent to the commencement of a mortgage foreclosure, that the foreclosing lender has the burden of establishing that it satisfied that condition, and the Plaintiff in this case did not comply with the notice requirements of Section 1304. The notice was not sent to one of the borrowers, and the other borrower, her husband, did not receive the notice by registered or certified mail. In addition, the notice provided with the motion papers did not include a required list of counseling agencies.
The mortgage being foreclosed was a consolidated mortgage securing a consolidated note. However, no evidence was produced that MERS, as nominee for Lehman Brothers, either physically transferred the first note to the Plaintiff or had the authority to assign that note, or that the Plaintiff was assigned the second note, the second mortgage, the consolidated note or the consolidated mortgage. Accordingly, the Appellate Division also held that the Plaintiff did not have standing. Reversing the Order of the lower court, the Appellate Division granted the Defendants-mortgagors' motion for summary judgment, and it dismissed the complaint as to them.
The Court noted that the assignment of the first mortgage to the Plaintiff after the action was recorded after the action was commenced did not, in itself, effect the Plaintiff's standing, because the assignment was delivered prior to commencement of the action. Aurora Loan Services, LLC v. Weisblum, decided May 17, 2011, is reported at 2011 WL 1902620.