Mortgage Foreclosure RPAPL 1304
This week we wanted to bring your attention to an interesting decision out of the Second Department wherein the Appellate Court, in analyzing the RPAPL § 1304 notice requirements for a residential mortgage foreclosure action, reversed a lower Court’s ruling and granted Summary Judgment to the Appellant/Home-Owners and dismissed the Respondent/Lender’s Complaint.
The decision, in relevant part, was decided based on the Lender’s failure to provide the requisite notice to a necessary party who had executed the Mortgage, but not the Note, on the loan transaction.
The relevant facts of, as well as a link to, the case are set forth below.
The Supreme Court, Suffolk County’s grant of a judgment of foreclosure and sale was reversed by the Appellate Division for the failure to provide the RPAPL Section 1304 notice to a mortgagor who had not executed the note secured by the mortgage. According to the Appellate Division, the Defendant who had executed the mortgage but not the note.
“…was entitled to such notice as a ‘borrower’ within the meaning of [RPAPL Section 1304]. Although [he] did not sign the note, the plaintiff conceded that both of the defendants were title owners of the subject property and both executed the mortgage as a ‘borrower’. ‘Where, as here, a homeowner defendant is referred to as a ‘borrower’ in the mortgage instrument and, in that capacity, agrees to pay amounts due under the note, that defendant is a ‘borrower’ for the purposes of RPAPL 1304, notwithstanding…any ambiguity created by a provision in the mortgage instrument to the effect that parties who did not sign the underlying note are not personally obligated to pay the sums secured’ [citations omitted].”
HSBC Bank USA, N.A. v. Kalenborn, 2023 NY Slip Op 02109, decided April 26, 2023, is posted at
https://www.nycourts.gov/reporter/3dseries/2023/2023_02109.htm
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