Reverse Mortg. Solutions, Inc. v. Lanfrit
| Decision Date | 24 October 2017 |
| Citation | 58 Misc.3d 257,66 N.Y.S.3d 833 |
| Parties | REVERSE MORTGAGE SOLUTIONS, INC., corporations, if any, having or claiming an interest in or lien upon the premises being foreclosed herein, Plaintiff, v. Marie C. LANFRIT a/k/A Marie Lanfrit, the Secretary of Housing and Urban Development, New York State Department of Taxation and Finance, "John Doe No.1–5" and "Jane Doe # 1–5" said names being fictitious, it being the intention of Plaintiff to designate any and all occupants, tenants, persons or corporations, if any, having or claiming an interest in or lien upon the premises being foreclosed herein, Defendants. |
| Court | New York Supreme Court |
Fein, Such & Crane, LLP, Westbury, Attorneys for Plaintiff.
Marie C. Lanfrit, West Islip, Defendant Pro Se.
It is,
ORDERED that plaintiff's motion for order of reference appointing a referee to compute (seq. # 001) is denied; and it is further
ORDERED that defendant's motion for leave to serve and file a late answer and vacate her default (seq. # 002) is granted; and it is further
ORDERED that defendant's proposed answer is deemed served and filed as of the date of this order; and it is further
ORDERED that this action shall be calendared for a status conference on Wednesday, January 11, 2018 at 9:30 AM in Part 27 for the court to monitor the progress of this action.
This is an action to foreclose a reverse mortgage on property known as 46 Babylon Avenue, West Islip, Suffolk County, New York ("the property"). The action was commenced by filing of a summons and complaint on November 12, 2015. Defendant Marie C. Lanfrit a/k/a Marie Lanfrit ("defendant") was personally served at the property on November 18, 2015. Defendant did not answer or appear.
The Court's records indicate that a foreclosure settlement conference was scheduled for March 11, 2016. Since the action involves a reverse mortgage it was marked not eligible for conference and referred to an IAS part. The action was administratively transferred to the general inventory of this part on June 12, 2017 pursuant to Administrative Order 76–17.
Reverse Mortgage Solutions, Inc. ("plaintiff") moves for an order of reference fixing the default of all non-appearing, non-answering defendants, for appointment of a referee to compute, and to amend the caption (Seq. # 001). Pro se defendant Marie C. Lanfrit a/k/a Marie Lanfrit ("defendant") does not oppose the motion but files a motion for leave to serve and file a late answer and vacate her default (Seq. # 002). Plaintiff opposes defendant's motion.
Although defendant's motion was not denominated a cross-motion, for purposes of simplicity and clarity the court consolidates both motion for this decision.
In determining the motions the court has considered plaintiff's submissions in support of its motion (Seq. # 001) consisting of the affirmation of counsel and attached exhibits, including the affidavit of merit of a representative of plaintiff, the pleadings, note, mortgage and assignment of mortgage, the notice of default pursuant to the mortgage, affidavits of service of the summons and complaint, an affidavit of service of the motion and a proposed order appointing a referee to compute. The court has also considered defendant's submissions in support of her motion for leave to serve and file a late answer and vacate her default (Seq. # 002) including defendant's affidavit in support and proposed answer. Plaintiff submits the affirmation of counsel in opposition to defendant's motion with supporting exhibits.
On June 2, 2010 defendant executed a fixed rate note in favor of Genworth Financial Home Equity Access, Inc. agreeing to pay the sum of $562,50.00 plus interest, at the same time defendant executed a fixed rate home equity conversion mortgage, more commonly referred to as a reverse mortgage, on the property to secure the note. Thereafter the mortgage and note were transferred by assignment dated May 16, 2011, from Genworth Financial Home Equity Access, Inc. to plaintiff, and recorded in the Suffolk County Clerk's Office on June 8, 2011. The mortgage and note were subsequently assigned by Genworth Financial Home Equity Access, Inc. to plaintiff pursuant to Confirmatory Assignment dated June 7, 2011 and recorded on June 13, 2011, and thereafter subject of a Corrective Assignment dated October 13, 2015, and recorded on October 30, 2015.
Pursuant to the terms of the mortgage, defendant was required to pay property taxes and home insurance, failure to do so would be grounds for acceleration of the debt (paragraph 9(b)(ii) of the mortgage, see plaintiff's Exhibit "G"). Defendant allegedly failed to pay the property taxes and home insurance commencing with those payments due on December 30, 2013. Pursuant to the terms of the reverse mortgage plaintiff allegedly notified defendant of the default and the amount necessary to cure the default. In support plaintiff submits a copy of the default notice, dated June 17, 2015, addressed to defendant at the property. Plaintiff did not provide proof of notice to the Secretary of Housing and Urban Development ("Secretary"), nor did it submit proof of authorization by the Secretary to proceed with this action (paragraphs 3, 9(b) and 9(d) of the mortgage).
Reverse mortgages are designed to allow elderly homeowners to borrow money against the accumulated equity in their homes and, unlike traditional mortgages, the borrower in a reverse mortgage receives periodic payments (or a lump sum) and need not repay the outstanding loan balance until certain triggering events occur (see Bennett v. Donovan, 703 F.3d 582, 584–585 [D.C.Cir.2013] ). While the triggering event is generally the death of the borrower or the sale of the home, repayment can be triggered when, an obligation of the mortgage is not performed and the Secretary of Housing and Urban Development approves of requiring immediate payment in full ( 24 C.F.R. 206.27 [c][2][iii] )(emphasis supplied)(see also paragraphs 9(b) and (d) of the mortgage).
On a motion for leave to enter a default judgment, the movant is required to submit proof of service of the summons and complaint, proof of the facts constituting the claim, and proof of the defaulting party's default in answering or appearing ( CPLR 3215[f] ; see Dupps v. Betancourt, 99 A.D.3d 855, 952 N.Y.S.2d 585 [2d Dept.2012] ; Green Tree Serv., LLC v. Cary, 106 A.D.3d 691, 965 N.Y.S.2d 511 [2d Dept.2013] ). In the present case plaintiff has failed to meet its burden in establishing its prima facie case. Pursuant to the terms of the loan documents defendant agreed to pay all property charges including, but not limited to, taxes, ground rents, flood and hazard insurance premiums. Failure to make such payments is grounds for acceleration of the debt. However, pursuant to the same loan documents, plaintiff may only accelerate the debt upon approval of the Secretary after notice to the borrower and the Secretary of the default (see paragraphs 9(b) and (d) of the mortgage) (emphasis supplied). Plaintiff failed to establish prima facie entitlement to default judgment since it failed to submit proof of defendant's default in paying property taxes and home insurance, and further plaintiff failed to submit proof it notified the Secretary of the default, and obtained approval from the Secretary to accelerate the debt and commence the action.
Pursuant to CPLR 3215(f) a party moving for default must submit proof of the facts constituting the claim. Here the only proof that defendant defaulted under the terms of the mortgage is the conclusory statement in the affidavit of Michele Mullican, plaintiff's Foreclosure Specialist, wherein she states that she reviewed plaintiff's business records and prior to commencement of the action defendant "failed to pay the property taxes and home insurance." Plaintiff fails to provide the date of the missed payments, the amount of any missed payments, or the entity that was supposed to be paid. In a motion for default judgment a plaintiff must establish enough facts to enable a court to determine that a viable cause of action exists ( Woodson v. Mendon Leasing Corp., 100 N.Y.2d 62, 760 N.Y.S.2d 727, 790 N.E.2d 1156 [2003] ). In order to sustain this burden, a plaintiff must submit evidence from one with personal knowledge of the relevant facts constituting the claim (see HSBC Bank USA, N.A. v. Betts, 67 A.D.3d 735, 888 N.Y.S.2d 203 [2d Dept.2009] ). The affidavit of plaintiff's foreclosure specialist, purportedly based on personal knowledge, is the only proof offered to prove defendant's alleged default in payment of the property taxes and home insurance. As plaintiff is not the taxing authority or insurer one questions how its Foreclosure Specialist can testify as to the default and the amounts due. If those amounts have been advanced by plaintiff on defendant's behalf there is no evidence before the court as to that fact, even if the affiant establishes her ability to testify pursuant to CPLR 4518(a), she does not state that the records show plaintiff advanced these monies, only that they were not paid. Further, failure of payment would be in the business records of another entity, making the testimony of plaintiff's Foreclosure Specialist inadmissible hearsay. Additionally, the court notes an inconsistency in the documents submitted in support of plaintiff's motion. Specifically the default notice dated June 17, 2015, indicates an "accelerated loan balance" of $327,568.45, while the affidavit of merit refers to the "total principal" of $300,057.30 due as of December 30, 2013.
Unlike a traditional mortgage foreclosure action based upon defendant's failure to make payments to plaintiff, in which a plaintiff's affidavit can sufficiently establish those facts, the present case involves a reverse mortgage and allegations that defendant failed to make payments to third-parties. Yet plaintiff offers only the conclusory statement of its...
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...e.g., Liberty Home Equity Sols., Inc. v. Raulston, 206 So.3d 58, 61 (Fla. Dist. Ct. App. 2016); Reverse Mortg. Sols., Inc. v. Lanfrit, 66 N.Y.S.3d 833, 837 (N.Y. Sup. Ct. 2017). BNYM generally alleges under Federal Rule of Civil Procedure Rule 9(c) that “all conditions precedent have been p......