It is rather astonishing. Plaintiffs are still losing foreclosure actions – or at least having their motions for summary judgment defeated – for want of ability to prove that either or both the statutory RPAPL § 1304 notice or the 30 day notice which may be required by the mortgage was properly mailed. Both (where applicable) are prerequisites – conditions precedent – to initiating the foreclosure action (the 1304 notice applicable solely to home loan situations). Two recent cases bring this problem to our attention yet again: Bank of America v. Kljajic, 2019 N.Y.App.Div. Lexis 107, 91 N.Y.S.3d 231 (2d Dept. 2019); Wells Fargo Bank, N.A. v. Sakizada, 2019 N.Y.App.Div. Lexis 159, 91 N.Y.S.3d 268 (2d Dept. 2019).
What is so bewildering about the regularity of servicer miscues in this regard is that the statutory notice requirement of RPAPL § 1304 has been on the books since 2008 and the thirty day notice requirement mandated by the Fannie/Freddie uniform instrument has been in use for decades. So, the lesson of what must be done one would think would be long ingrained in the best practices of lenders and servicers. That thought notwithstanding, case law confirms that notices fail at something akin an alarming rate.
We need not revisit in its entirety the minutia of each notice. We have discussed them before in alerts and the texts are there to be seen respectively in the statute and in the mortgage form. Briefly, however, the 1304 notice, the verbiage of which is recited in the statute, must be sent by registered or certified and regular mail. The 30 day notice, the creature of the mortgage form, must be sent by regular mail and its language is set forth in the mortgage. These notices are separate and pursuant to New York statute must be sent in different envelopes.
The problem in complying as it emerges from reading too many cases on this subject is that servicers are sometimes unable to actually prove or demonstrate that the mailing was made. Either there needs to be a contemporaneous affidavit of service, or records which clearly reflect compliance with the obligations. In the alternative, the servicer must produce testimony of someone with specific knowledge of the system giving rise to the conclusion that the notices were mailed. It is the inability to demonstrate this to the courts that has been the cause of foreclosures being defeated or motions for summary judgment lost.
In the Bank of America case noted, the infirmity was in the 30 day notice. The court observed that the statements in the affidavit of the plaintiff’s employee in support of the motion for summary judgment failed to establish that the witness mailed the required notice by first class mail on any particular date or actually delivered such notice to the designated address if sent by other means which was required by the terms of the mortgage.
In the Wells Fargo case the downfall was as to both the 1304 notice and the 30 day notice. In each instance in this case the evidence submitted simply did not demonstrate compliance with the requirements.
While neither decision was absolutely clear as to how specifically the servicer failed, the actuality remains that the servicer did not meet the standard for persuading the court that the notices were sent. All of this may suggest that procedures in this regard are worthy of particular attention.
Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2019), 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.