Bloom v. Nationstar Mortgage, LLC

Summary

The Appellate Division, Second Department, affirmed an order addressing summary judgment and class decertification in a putative class action concerning fees charged for mortgage payoff statements. The court held that charging a fee for a first payoff statement violated Real Property Law § 274-a, while the General Business Law § 349 claim could not be maintained because it was based solely on an alleged violation of 3 NYCRR 419.4(d), which provides no implied private right of action. The court upheld the certification of Class One and the decertification of Class Two.

Holdings

1. Real Property Law § 274-a prohibits a mortgagee from charging a fee for providing a first mortgage payoff statement for an owner-occupied one-to-six-family residential structure or residential condominium unit; a separate fax or expedited-delivery fee for that statement is likewise prohibited.
2. A borrower's consent to pay a fee for a first mortgage payoff statement does not constitute a defense to a violation of Real Property Law § 274-a.
3. A General Business Law § 349 claim cannot be maintained when it alleges no deceptive act independent of a violation of 3 NYCRR 419.4(d), because that regulation does not create an implied private right of action.
4. Decertification of Class Two was warranted because the class certification was based on the alleged violation of 3 NYCRR 419.4(d), which could not support the pleaded General Business Law § 349 claim.

Questions Presented

1. Whether charging a fee for providing a first mortgage payoff statement by facsimile violated Real Property Law § 274-a.
2. Whether a borrower's consent to pay a fee for a first mortgage payoff statement constituted a defense to a claim under Real Property Law § 274-a.
3. Whether the General Business Law § 349 claim could be maintained when it was based solely on an alleged violation of 3 NYCRR 419.4(d), a regulation without an implied private right of action.
4. Whether decertification of Class Two was warranted because its certification was based on the alleged violation of 3 NYCRR 419.4(d).

Disposition

affirmed