Summary
The Appellate Division, First Department affirmed a judgment of foreclosure and sale in favor of Nationstar Mortgage LLC. The court held that Steve Vassi retained standing to challenge compliance with RPAPL 1304 because he remained liable on the note and potentially subject to a deficiency judgment despite transferring the property. The court nevertheless found that Nationstar established compliance with the pre-foreclosure mailing requirements, adequately supported the amount due, and did not warrant further tolling of interest.
Topics
Practice areas
Questions Presented
- Whether Vassi retained standing to challenge the foreclosure judgment and raise Nationstar's alleged noncompliance with RPAPL 1304 after transferring the mortgaged property during the foreclosure action.
- Whether Nationstar established strict compliance with RPAPL 1304's type-size and mailing requirements.
- Whether the referee's report was supported by admissible evidence, including evidence establishing the authority of the loan servicer's affiant.
- Whether Vassi demonstrated grounds for further tolling of interest.
Holdings
- A mortgagor who transfers the mortgaged property during a foreclosure action retains standing to defend the action and challenge a foreclosure judgment when the plaintiff has not waived its right to seek a deficiency judgment and the statutory period for seeking one has not expired.
- A defendant may timely raise a plaintiff's failure to comply with RPAPL 1304 in opposition to a motion to confirm the referee's report and for a judgment of foreclosure and sale.
- Nationstar established prima facie compliance with RPAPL 1304's type-size and mailing requirements, and Vassi's conclusory assertions did not raise a triable issue of fact.
- The evidence before the referee substantially supported the amount due, and the servicer's affiant sufficiently established his authority to make the affidavit through a duly witnessed and notarized limited power of attorney and his statement of authorization.
- Further tolling of interest was unwarranted because Vassi failed to identify conduct by Nationstar that would justify tolling.
Key quotations
“Notwithstanding Vassi's transfer of his interest in the mortgaged property to IPA, Vassi retained his standing to challenge the judgment of foreclosure and sale because he remains a defendant in the foreclosure action and is potentially liable for a deficiency judgment.” ([*2])
“In CIT Bank N.A. v Schiffman, the Court of Appeals held that the mailing requirements in RPAPL 1304 are satisfied by submitting evidence of "actual mailing . . . or . . . proof of a sender's routine business practice with respect to the creation, addressing, and mailing of documents"” ([*6])
Factual background
Steve Vassi executed a $400,000 note in 2008 secured by a mortgage on his Manhattan condominium, and the loan was later modified. After Vassi defaulted beginning in May 2010, CitiMortgage endorsed the note to Nationstar and assigned the mortgage to it. During the foreclosure action, Vassi transferred the property to IPA Asset Management, LLC, but Nationstar did not waive its right to seek a deficiency judgment. The property had not yet been sold when the appellate court decided the appeal.
Procedural history
Nationstar commenced a mortgage foreclosure action in 2012 after Vassi defaulted. Supreme Court granted Nationstar's unopposed 2017 motion for summary judgment, to strike the answer, and for an order of reference. After Vassi transferred the mortgaged property to IPA Asset Management during the action and after additional referee proceedings, Supreme Court granted Nationstar's fourth motion to confirm the referee's report and for a judgment of foreclosure and sale, while denying Vassi's cross-motion to toll interest. The Appellate Division held that Vassi retained standing to defend because he remained potentially liable for a deficiency judgment, but affirmed the judgment on the merits.