New York law requires that in any foreclosure action “with regard to a home loan,” at least 90 days before filing suit against the borrower, including a foreclosure action, the lender must give a detailed notice in the form prescribed by the statute. RPAPL 1304. Enacted in 2008, the law has been updated a few times, as recently as 2018.
Although the details are spelled out in the law, in 2022 alone, numerous cases have been reported where courts have held that simple requirements of the statute were not met. As courts have held that “strict compliance” with the statute is required, it is worthwhile to review some of the common mistakes.
Addition Materials Mailed With Notice – Section 1304 requires that the notice be “served in an envelope that was separate from any other mailing or notice.” Lenders often include other information, such as notice of the rights of debtor in bankruptcy or for those in military service. Courts have repeatedly held that this void the service. JPMorgan Chase Bank, Nat'l Ass'n v. Dedvukaj, 207 A.D.3d 532, 534 (2d Dept. 2022); Ocwen Loan Servicing, LLC v. Sirianni, 202 A.D.3d 702, 705 (2d Dept. 2022); Deutsche Bank Nat'l Tr. Co. v. Bancic, 203 A.D.3d 1130 (2d Dept. 2022). This issue is now before the Court of Appeals in a case entitled Bank of America N.A. v. Kessler, No. APL-2022-00061.
Defective Affidavit of Compliance – Lenders will submit an affidavit of compliance with the statute, but often this is by a person who neither mailed the items nor has personal knowledge of lender’s mailing practices. Such affidavits are insufficient and lead to denial of foreclosure. Ocwen Loan Servicing, LLC v. Sirianni, 202 A.D.3d 702, 705 (2022); Pennymac Corp. v. Levy, 207 A.D.3d 735, 736–37 (2d Dept. 2022).
Failure To Advise of Five Housing Counseling Agencies Serving That County – “The notices required by this section shall contain a current list of at least five housing counseling agencies serving the county where the property is located from the most recent listing available from [the] department of financial services.” RPAPL 1304(2). Some lenders have sent lists where not all five served the relevant county. U.S. Bank Nat'l Ass'n v. Gordon, 202 A.D.3d 872, 874 (2d Dept. 2022); Hudson Valley Fed. Credit Union v. Tavares, 206 A.D.3d 891, 892 (2d Dept. 2022)
Failure To Send To All Parties – It sometimes happens that a mortgagor of a property will not sign the loan note, but will still allow his or her property to be mortgaged and be listed as a “borrower” in the mortgage. Failure to give notice to that person means that the foreclosure must be denied. HSBC Bank USA, Nat'l Ass'n v. DiBenedetti, 205 A.D.3d 687, 689 (2d Dept. 2022).
Failure to Send Separate Notice To Each Borrower – Where there is more than one borrower, a separate notice must be sent individually addressed to each borrower. Sending the notice to both borrowers together results in defective notice. U.S. Bank Nat'l Ass'n v. Maioriello, 207 A.D.3d 428 (1st Dept. 2022); Deutsche Bank Nat'l Tr. Co. v. Loayza, 204 A.D.3d 753, 755 (2d Dept. 2022); Wells Fargo Bank, N.A. v. Davidson, 202 A.D.3d 880, 882 (2d Dept. 2022);
Failure To Allege Compliance With Statute – Compliance with the statute is a condition precedent to any suit against the borrower, and failure to allege compliance in the complaint can lead to dismissal. USA Residential Properties, LLC v. Jongebloed, 203 A.D.3d 990 (2d Dept. 2022)
Failure to Send to Borrower’s Last Known Address – The notice must be sent to “to the last known address of the borrower, and to the residence that is the subject of the mortgage.” RPAPL 1304(2) Failure to send to both fails to comply with the statute and can lead to denial of the foreclosure. Miami Home LLC v. Viera, 2022 WL 1694169, at *6 (E.D.N.Y. 2022), report and recommendation adopted, 2022 WL 1693822 (E.D.N.Y. 2022)
Although the details are spelled out in the law, in 2022 alone, numerous cases have been reported where courts have held that simple requirements of the statute were not met. As courts have held that “strict compliance” with the statute is required, it is worthwhile to review some of the common mistakes.
Addition Materials Mailed With Notice – Section 1304 requires that the notice be “served in an envelope that was separate from any other mailing or notice.” Lenders often include other information, such as notice of the rights of debtor in bankruptcy or for those in military service. Courts have repeatedly held that this void the service. JPMorgan Chase Bank, Nat'l Ass'n v. Dedvukaj, 207 A.D.3d 532, 534 (2d Dept. 2022); Ocwen Loan Servicing, LLC v. Sirianni, 202 A.D.3d 702, 705 (2d Dept. 2022); Deutsche Bank Nat'l Tr. Co. v. Bancic, 203 A.D.3d 1130 (2d Dept. 2022). This issue is now before the Court of Appeals in a case entitled Bank of America N.A. v. Kessler, No. APL-2022-00061.
Defective Affidavit of Compliance – Lenders will submit an affidavit of compliance with the statute, but often this is by a person who neither mailed the items nor has personal knowledge of lender’s mailing practices. Such affidavits are insufficient and lead to denial of foreclosure. Ocwen Loan Servicing, LLC v. Sirianni, 202 A.D.3d 702, 705 (2022); Pennymac Corp. v. Levy, 207 A.D.3d 735, 736–37 (2d Dept. 2022).
Failure To Advise of Five Housing Counseling Agencies Serving That County – “The notices required by this section shall contain a current list of at least five housing counseling agencies serving the county where the property is located from the most recent listing available from [the] department of financial services.” RPAPL 1304(2). Some lenders have sent lists where not all five served the relevant county. U.S. Bank Nat'l Ass'n v. Gordon, 202 A.D.3d 872, 874 (2d Dept. 2022); Hudson Valley Fed. Credit Union v. Tavares, 206 A.D.3d 891, 892 (2d Dept. 2022)
Failure To Send To All Parties – It sometimes happens that a mortgagor of a property will not sign the loan note, but will still allow his or her property to be mortgaged and be listed as a “borrower” in the mortgage. Failure to give notice to that person means that the foreclosure must be denied. HSBC Bank USA, Nat'l Ass'n v. DiBenedetti, 205 A.D.3d 687, 689 (2d Dept. 2022).
Failure to Send Separate Notice To Each Borrower – Where there is more than one borrower, a separate notice must be sent individually addressed to each borrower. Sending the notice to both borrowers together results in defective notice. U.S. Bank Nat'l Ass'n v. Maioriello, 207 A.D.3d 428 (1st Dept. 2022); Deutsche Bank Nat'l Tr. Co. v. Loayza, 204 A.D.3d 753, 755 (2d Dept. 2022); Wells Fargo Bank, N.A. v. Davidson, 202 A.D.3d 880, 882 (2d Dept. 2022);
Failure To Allege Compliance With Statute – Compliance with the statute is a condition precedent to any suit against the borrower, and failure to allege compliance in the complaint can lead to dismissal. USA Residential Properties, LLC v. Jongebloed, 203 A.D.3d 990 (2d Dept. 2022)
Failure to Send to Borrower’s Last Known Address – The notice must be sent to “to the last known address of the borrower, and to the residence that is the subject of the mortgage.” RPAPL 1304(2) Failure to send to both fails to comply with the statute and can lead to denial of the foreclosure. Miami Home LLC v. Viera, 2022 WL 1694169, at *6 (E.D.N.Y. 2022), report and recommendation adopted, 2022 WL 1693822 (E.D.N.Y. 2022)