MORTGAGE FORECLOSURE - RPAPL 1304 AND ERAP

BCMB1 TRUST v. Rubio, 2022 NY Slip Op 50760 - NY: Supreme Court Suff. Co. 2022:

"This foreclosure action involves a note in the sum of $45,000.00 delivered to Concord Mortgage Corp, the plaintiff's predecessor-in-interest, on January 31, 2007 by defendants, Maria M. Rubio and Pascual N. Rubio. As security for the repayment of the note, defendants executed and delivered a mortgage secured by the real property located at 7 Norma Place, Amityville. Several assignments of mortgage was subsequently recorded. The defendants defaulted on the terms of the Note and Mortgage by failing to make the mortgage payment that was due November 1, 2010 and each subsequent payment. The plaintiff commenced this foreclosure action on July 31, 2021 and the defendants timely answered. Presently, the plaintiff has moved for summary judgment on the complaint claiming that it has established the elements of the default and all condition precedent. Defendants has cross moved for summary judgement claiming that the plaintiff failed to comply with RPAPL §§1303 and 1304.

The defendants argue that the notice violated the rule of Wells Fargo Bank, N.A. v. Yapkowitz, 199 AD3d 126 [2nd Dept. 2021]). Furthermore, the defendants argue that the inclusion of the Hardship Declaration violated the rule that "inclusion of any material in the separate envelope sent to the borrower under RPAPL 1304 that is not expressly delineated in these provisions constitutes a violation of the separate envelope requirement of RPAPL 1304(2)" (Bank of America, N.A. v. Kessler, 202 AD3d 10, 14 [2d Dept 2021], lv. granted ___ AD3d ___ [May 23, 2022]^[1]; see Wells Fargo Bank, N.A. v DeFeo, 200 AD3d 1105 [2d Dept, 2021]; Citimortgage, Inc. v Dente, 200 AD3d 1025 [2d Dept 2021])).

Initially, Yapkowitz holds that the mailing to two defendants must be in two separate envelopes. Here the plaintiff established that the notices were mailed in separate envelopes. The defendant claims that the fact that the notices have both names should be a violation of Yapkowitz. However, a reading of Yapkowitz is limited to the mailing methodology required pursuant to RPAPL §1304. Therefore, the defendants' claim that the plaintiff violated this Second Department precedent must be rejected.

Furthermore, as the plaintiff correctly notes, the Emergency Eviction and Foreclosure Prevention Act of 2020 (L2020 ch 381) requires for the hardship declarations to be included "with every notice provided to a mortgagor pursuant to [RPAPL] 1304[.]" In construing this statute, the Court is mindful of the canon that a "subsequent act in pari materia may be considered as an aid in the construction of an earlier statute or section (Statutes §223; see Deutsche Bank National Trust Company v. Lubonty, ___ AD3d ___, 2022 WL 2443859 [2nd Dept. July 6, 2022]). Furthermore, a statute should be construed according to its plain meaning (Matter of DaimlerChrysler Corp. v. Spitzer, 7 NY3d 653 [2006]). Here, the plain language of the statute required the Hardship Declaration be included with the RPAPL §1304 notice. Moreover, the statute provides that a court shall not accept for filing any action to foreclose a mortgage unless the foreclosing party or an agent of the foreclosing party files an affidavit, indicating that the Hardship Declaration was provided with the 1304 notice.^[2] Therefore, reading the statutes in pari materia and its plain unambiguous language, the inclusion of the Hardship Declaration does not violate the strict requirements of Kessler.

As the Statement of Material Facts has not be rebutted, as plaintiff argues, the facts are deemed admitted (see 22 NYCRR 202.8-g; Part 27 Rules). Therefore, the plaintiff has established prima facie the mortgage, note and default, against the answering defendants ((Deutsche Bank Natl. Trust Co. v. Abdan, 131 AD3d 1001 [2nd Dept. 2015]). Consequently, the motion for summary judgment is granted and the cross motion is denied.

The foregoing constitutes the decision and order of the Court.

[1] Plaintiff's statement that Kessler is misguided does not alter the legal principle of stare decisis, which binds this court unless the New York Court of Appeals holds otherwise.

[2] The legislative intent of the law was "to avoid as many evictions and foreclosures as possible for people experiencing a financial hardship during the COVID-19 pandemic or who cannot move due to an increased risk of severe illness or death from COVID-19."As such, it is necessary to temporarily allow people impacted by COVID-19 to remain in their homes. A limited, temporary stay is necessary to protect the public health, safety and morals of the people the Legislature represents from the dangers of the COVID-19 emergency pandemic"(L 220 ch 381). Getting the Hardship Declaration as quickly to the borrowers would clearly be in harmony with intent. Of course, the 1304 notice is the earliest statutory time to provide the Hardship Declaration."