It is a borrower’s common – almost typical – claimed defense to a mortgage foreclosure action: “I don’t owe the amount the lender says”. This can take any number of forms. Among others, it might be the borrower’s assertion that no, he did not miss four payments, only two; or that the lender failed to account in computing the principal balance for three payments the borrower says he remitted last year; or that the lender is calculating interest at the wrong percentage or from the wrong date.
Howsoever the borrower may express it – and even if the borrower is correct – it is not a defense to a mortgage foreclosure, as a recent case confirms anew. [The Board of Managers of Village Mall at Hillcrest Condominium v. Dadon, 2010 WL 5173180 (N.Y. Sup.)].
While this case involved foreclosure of a condominium common charge lien, the principle is the same. Here, the borrower had answered the complaint and in opposition to the foreclosing plaintiff’s motion for summary judgment argued that he owed a lesser sum than the plaintiff recited. Not a defense ruled the court – once there is an entitlement to foreclosure, that is, where there has been a default, then a discrepancy among the figures cannot invalidate the action.
The key is that a dispute as to the exact amount owed cannot impede an award of summary judgment. Computation, after all, is for the referee. [For a more in depth review of this subject, see 2 Bergman on New York Mortgage Foreclosures §21.01[a1], LexisNexis Matthew Bender (rev. 2011)].
None of this is to suggest that lenders and servicers should reduce their vigilance in assuring that the sums claimed to have been missed and the amount due are correct. But no matter what a defaulting borrower may say about the accuracy of the calculation, it is not the quantum of the default that permits a foreclosure. It is the actuality of a default that is the basis to proceed, and the mechanics of computation is for a referee.
Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2017), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.