Posted on 10 June 2011.
Establishes certain proof and settlement requirements for plaintiffs seeking summary judgment or a default judgment in a residential foreclosure proceeding; provides that only the owner and holder of a mortgage and note, or its agent, shall have standing to commence a mortgage foreclosure action; lack of standing shall be defense that may be raised at any time; requires the plaintiff in a foreclosure action to affirm that it is the holder and owner, or its delegated agent, of the subject mortgage and note; the summons and complaint shall include a copy of the original mortgage and note, and all endorsements, assignments and transfers thereof, and any delegations of authority by the owner and holder of the mortgage and note.
Sponsor: KLEIN / Committee: JUDICIARY / Law Section: Civil Practice Law and Rules
- Jun 8, 2011: REFERRED TO JUDICIARY
TITLE OF BILL:
to amend the civil practice law and rules, in relation to residential
foreclosure actions; and to amend the
real property actions and proceedings law, in relation to
standing to commence an action to foreclose a mortgage
PURPOSE OF BILL:
Establishes certain proof requirements for plaintiffs
in mortgage foreclosure actions.
SUMMARY OF PROVISIONS OF BILL:
Requires a mandatory settlement
conference be held as a condition precedent to the granting of
summary judgment motions in residential mortgage foreclosure
Creates standards for the granting of summary judgment and default
judgments, including an affirmative showing that plaintiff has dealt
with defendant in good faith as required by the implied covenant of
good faith contained within the mortgage.
EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:
Amends CPLR 3212
(a); creates a new CPLR (j); amends CPLR 3215 (f); amends CPLR 3408
(a) and (f); amends RPAPL 1302; creates a new RPAPL 1302-a.
There exists in all contracts, and in all mortgages, an
implied covenant to act in good faith and to deal fairly. Gordon v
Nationwide Mut. Ins. Co., 30 N.Y.2d 427, 437, cert denied 410 U.S. 931;
Security Pacific National Bank v. Evans, 62 A.D.3d 512 (1st Dept
2009); DiBlanda v. ADC Pinebrook, LLC, 44 A.D.3d 702 (2nd; Dept
2007). Unfortunately, it would appear that numerous residential
properties have been foreclosed upon without any showing that the
foreclosing mortgagee has lived up to this requirement in law. Given
that the great majority of foreclosure judgments result from either
applications for summary judgment or default judgment, it is
important that there be a demonstration to the Court that this
covenant has been abided by. The bill would also clarify that the
duty of all parties to negotiate in good faith at settlement
conferences required by CPLR 3408 includes the duty to abide by the
covenant of fair dealing, and that this obligation shall continue
throughout the pendency of the action.
Likewise, numerous residential properties have been foreclosed without
an adequate showing that the mortgagee-plaintiff owns and physically
possesses the note and mortgage, and can demonstrate a chain of
custody from mortgage inception through to the commencement of the
action. This bill would require plaintiff in a mortgage foreclosure
action to make such a showing.
This bill would also require that a plaintiff demonstrate standing and
capacity to bring the action, and that plaintiff has attended the
mandatory settlement conference required by CPLR 3408, all as a
condition precedent to the entry of summary judgment, or a default
Finally, the bill would also require that standing and capacity be
affirmatively demonstrated in order to successfully adjudicate a
mortgage foreclosure action. Further, the bill would amend the CPLR
to provide that failure to timely raise standing as a defense would
not result in waiver of same.
New bill, 2011.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Immediately, except that portion of the bill which
states requisites for the quantum of proof necessary in order to
prevail in a mortgage foreclosure action shall become effective on
the 90th day after the bill shall become law.
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