By: Nicholas M. Moccia, Esq.
In GMAC Mtge. LLC v. Munoz, 2010 NY Slip Op 51598(U)(Sup. Ct. Suffolk County 2010), Justice Peter H. Mayer of the Supreme Court in Suffolk County, denied a foreclosing bank's application for an order of reference in the furtherance of its foreclosure action due to its failure to comply with RPAPL 1304. Justice Mayer writes:
The plaintiff's application is denied for failure to submit evidentiary proof, including an affidavit or affirmation from one with personal knowledge, of compliance with the type-size and content requirements of RPAPL §1304 regarding the pre-commencement notice required in foreclosure actions, as well as an affidavit of proper service of such notice by registered or certified mail and by first class mail to the last known address of the borrower as required by RPAPL §1304(2) or, in the alternative, an affidavit from one with personal knowledge sufficient to show why the requirements of RPAPL §1304 do not apply.
Justice Mayer noted that the foreclosing bank's complaint (with an out-of-county verification by an attorney) alleged that a notice pursuant to RPAPL 1304 was sent. Remarkably, however, Mayer rejected the complaint's allegations with regard to RPAPL 1304 as "vague, boilerplate language, particularly in a complaint verified by an attorney without even personal knowledge." Instead, Justice Mayer held that an "affidavit or affirmation from one with personal knowledge of compliance with the specific requirements of RPAPL 1304, or in the alternative, an affidavit sufficient to show why the requirements of RPAPL 1304 do not apply," was required. Accordingly, a complaint with an out-of-county verification by an attorney does not constitute "evidentiary proof" of compliance with RPAPL 1304.
In the instant matter, the foreclosing bank identified the underlying loan as a non-traditional home loan. For foreclosure actions commenced on or after September 1, 2008, RPAPL 1304 requires that with regard to a "high-cost home loan," a "subprime home loan" or a "non-traditional home loan," at least ninety (90) days before the lender or mortgage loan servicer commences legal action against the borrowe, the lender or servicer must give the borrower a specific, statutorily prescribed notice. In essence, the notice warns the borrower that he or she may lose his or her home because of the loan default, and provides information regarding assistance for homeowners who are facing financial difficulty. The specific language and type-size requirements of the notice are set forth in RPAPL §1304(1).
Pursuant to RPAPL 1304(2), the requisite 90-day notice must be "sent by the lender or mortgage loan servicer to the borrower, by registered or certified mail and also by first-class mail to the last known address of the borrower, and if different, to the residence which is the subject of the mortgage. Notice is considered given as of the date it is mailed." The notice must also contain a list of at least five housing counseling agencies approved by the U.S. Department of Housing and Urban Development, or those designated by the Division of Housing and Community Renewal, that serve the region where the borrower resides, as well as the counseling agencies' last known addresses and telephone numbers. Pursuant to RPAPL 1304(3), the 90-day period specified in RPAPL 1304(1) does not apply "if the borrower has filed an application for the adjustment of debts of the borrower or an order for relief from the payment of debts, or if the borrower no longer occupies the residence as the borrower's principal dwelling."
It should be noted that 90 day notice prescribed by RPAPL 1304 now applies to all home loans for foreclosure actions commenced on or after December 15, 2009, not just high cost, subprime and non-traditional home loans. For a peculiarly biased, but otherwise helpful exposition of the recent changes made by the New York State Assembly with regard to RPAPL 1304, see Bruce Bergman's blog post on this topic.