MORTGAGE FORECLOSURE - RPAPL 1304 DEFENSE AVAILABLE FOR HOME LOANS ONLY

Would there have been a different resolution if the borrower had lived in one of the units? Here the court implies it might have held differently.

Vanderbilt Mtge. & Fin., Inc. v Ammon, 2020 NY Slip Op 00638, Decided on January 29, 2020, Appellate Division, Second Department:

"RPAPL 1304(1) provides, in pertinent part, that, "at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower . . . , [the] lender . . . or mortgage loan servicer shall give notice to the borrower." "[P]roper service of RPAPL 1304 notice on the borrower or borrowers is a condition precedent to the commencement of a foreclosure action, and the plaintiff has the burden of establishing satisfaction of this condition" (Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 106; see CitiMortgage, Inc. v Pappas, 147 AD3d 900, 901; Flagstar Bank, FSB v Damaro, 145 AD3d 858, 860).

In support of its motion, inter alia, for summary judgment on the complaint insofar as asserted against Glenda Ammon, Vanderbilt failed to establish, prima facie, its strict compliance with RPAPL 1304. However, in its reply papers and on its motion, inter alia, for leave to renew, Vanderbilt demonstrated that RPAPL 1304 was inapplicable in this case because the subject loan was not a "home loan" as defined by the statute. Although generally, "[a] party moving for summary judgment cannot meet its prima facie burden by submitting evidence for the first time in reply, and generally, evidence submitted for the first time in reply papers should be disregarded by the court" (Wells Fargo Bank, N.A. v Osias, 156 AD3d 942, 943-944 [internal quotation marks omitted]), this Court has held that "the specific contention that this mortgage loan was not a home loan' for purposes of RPAPL 1304 may be reached because it involves a question of law that is apparent on the face of this record and could not have been avoided by the court if it had been brought to its attention" (HSBC Bank USA, N.A. v Ozcan, 154 AD3d 822, 824; see Stassa v Stassa, 123 AD3d 804, 806; 126 Newton St., LLC v Allbrand Commercial Windows & Doors, Inc., 121 AD3d 651, 652; cf. U.S. Bank N.A. v Beymer, 161 AD3d 543, 543-544).

On the merits, the record reflects that this was not a "home loan" subject to the notice requirements of RPAPL 1304 (see RPAPL 1304[6]; Wells Fargo Bank, N.A. v Berkovits, 143 AD3d 696, 697). The purpose of the subject loan was a refinancing of a multi-unit rental/investment property, and Glenda Ammon resided elsewhere. Accordingly, compliance with RPAPL 1304 was not required with regard to the subject loan."