In a case before Supreme Court Justice Peter Sweeney sitting in Kings County, he dismissed the bank’s foreclosure lawsuit. The bank had brought a summary judgment motion requesting an order that the house be sold at public auction, in addition they sought an order of reference with regard to this mortgage. The mortgage was on a two-family home owned by the Mitchells. The Mitchells brought a cross-application. They asked Judge Sweeney to dismiss the case. They claimed the bank had failed to serve them with Real Property Actions and Proceedings Law Section 1304’s 90 day notice prior to bringing the foreclosure lawsuit. The bank submitted evidence by their process server which alleged he had personally served Mitchell with the 1304 Notice when he served the Summons and Complaint. He claimed this took place at Mitchells’ residence.

No Personal Service

Mitchell in his opposing papers and cross-motion claimed he was never personally served with the 1304 Notice or the Summons and Complaint in this foreclosure lawsuit. He claimed he was more than a mile away at a local store at the time the alleged personal service took place by the process server.

Hearing Ordered Regarding Process Server’s Affidavit

Justice Sweeney found Mitchell submitted proof which contested the process server’s affidavit. Justice Sweeney therefore ordered a traverse hearing to determine whether service of process was properly effectuated. A special referee was appointed to supervise this proceeding. The referee found the bank’s claim that Mitchell had waived the bank’s failure to comply with Real Property Action and Proceedings Law Section 1304 was untrue. The special referee found a lender’s failure to comply with the 90 day notice provisions of Section 1304 is not an affirmative defense the defendant had to plead in his or her answer. Defendant Mitchells’ cross-motion to dismiss was therefore granted.

Conclusion

Banks have a definitive obligation to provide homeowners with 90 day’s-notice prior to initiating foreclosure lawsuits.

In a case before Justice Elliot sitting in Supreme Court in Queens County, HSBC Bank brought a motion for summary judgment (a motion for a judgment of foreclosure claiming there are no issues that need to be tried) against Murphy in a foreclosure lawsuit. HSBC claimed they had possession of the original note with the proper endorsement. They therefore claimed they were the owner of the note and mortgage. They took the position that Murphy had not made his monthly mortgage payments and was therefore in default regarding his contractual obligations.

Bank Lacks Standing Defense

Murphy claimed in his defense the bank lacked standing to bring this lawsuit. He argued that a copy of the original note with a blank endorsement annexed to its motion and the affidavits dealing with the motion were invalid. Murphy claimed the endorsement was on a separate piece of paper which amounted to being on a blank page.

Justice Elliot found the affidavit of the bank’s servicer attesting to physical possession of the original note was not sufficient. He found the endorsement did not provide significant evidence that it was “firmly affixed thereto to become part thereof.” HSBC’s servicer did not provide sufficient information with regard to the original note’s condition. Therefore, Justice Elliot ruled the bank was not entitled to summary judgment on the case and the case would continue.

Elliot S. Schlissel and his associates have been representing clients in foreclosure cases throughout the Metropolitan New York area for more than 45 years.