Decided on July 29, 2015 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
PETER B. SKELOS, J.P.
L. PRISCILLA HALL
SANDRA L. SGROI
BETSY BARROS, JJ.

2013-03487
(Index No. 22836/10)

 

Nassau/Suffolk Law Services Committee, Inc., Hempstead, N.Y. (Rosina Caputo of

counsel), for appellant.

 

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Esther Colace appeals, as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Adams, J.), entered January 18, 2013, as granted those branches of the plaintiff’s motion which were for summary judgment on the complaint and to strike her answer, and denied her cross motion for leave to amend her answer.

ORDERED that the order is modified, on the law, (1) by deleting the provisions thereof granting those branches of the plaintiff’s motion which were for summary judgment on the complaint and to strike the answer of the defendant Esther Colace, and substituting therefor provisions denying those branches of the plaintiff’s motion without prejudice to renewal, and (2) by deleting the provision thereof denying the cross motion of the defendant Esther Colace for leave to amend her answer, and substituting therefor a provision denying that cross motion without prejudice to renewal; as so modified, the order is affirmed insofar as appealed from, with costs to the defendant Esther Colace, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings consistent herewith.

The plaintiff commenced this action against the defendant Esther Colace (hereinafter the defendant) seeking to foreclose the mortgage on the defendant’s home in Levittown. As mandated by CPLR 3408(a), the plaintiff and the defendant subsequently participated in settlement conferences for the statutorily intended purpose of determining whether they could reach “a mutually agreeable resolution to help the defendant avoid losing . . . her home.” At the second settlement conference, the defendant’s attorney raised the issue of whether the plaintiff was negotiating in good faith as required by CPLR 3408(f). However, the action was transferred out of the foreclosure settlement conference part without any resolution of that issue. The defendant’s attorney claims that she consented to transferring the action out of the foreclosure settlement conference part because she mistakenly believed that the purpose of the transfer was to conduct a hearing to determine whether the plaintiff had negotiated in good faith. It is undisputed that when the defendant’s attorney asked the plaintiff’s attorney to consent to return the action to the foreclosure settlement conference part one day after the transfer, the plaintiff’s attorney refused to so consent. Following the transfer, the plaintiff moved, inter alia, for summary judgment on the complaint and to strike the defendant’s answer, and the defendant cross-moved for leave to amend her answer. The Supreme Court granted [*2]those branches of the plaintiff’s motion, and denied the cross motion.

Under the circumstances of this case, it was premature for the Supreme Court to entertain the plaintiff’s motion and the defendant’s cross motion. CPLR 3408 requires the parties to a residential foreclosure action to attend settlement conferences at an early stage of the litigation, at which they must “negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible” (CPLR 3408[f]). During settlement conferences, “[m]otions shall be held in abeyance” (22 NYCRR 202.12-a[c][7]). Here, the defendant submitted evidence that the plaintiff may have failed to exercise good faith during the settlement conference phase of this action with respect to her applications seeking a loan modification pursuant to the federal Home Affordable Modification Program (hereinafter HAMP). Specifically, she presented evidence that the plaintiff may have violated HAMP regulations and guidelines, which would constitute a failure to negotiate in good faith as required by CPLR 3408(f) (see U.S. Bank N.A. v Smith, 123 AD3d 914, 917). She also presented evidence that the plaintiff engaged in dilatory conduct, such as making piecemeal document requests, providing contradictory information, and repeatedly requesting documents which had already been provided (see One W. Bank, FSB v Greenhut, 36 Misc 3d 1205[A], 2012 NY Slip Op 51197[U] [Sup Ct, Westchester County]; US Bank N.A. v Alejandra Padilla, 31 Misc 3d 1208[A], 2011 NY Slip Op 50535[U] [Sup Ct, Dutchess County]). Since the defendant’s submissions raise a factual issue as to whether the plaintiff failed to negotiate in good faith, thus depriving her of a meaningful opportunity to resolve this action through loan modification or other potential workout options (see CPLR 3408[a]), the Supreme Court should have held a hearing to determine this issue prior to consideration of the plaintiff’s motion and the defendant’s cross motion.

Accordingly, we remit the matter to the Supreme Court, Nassau County, for a hearing to determine whether the plaintiff met its obligation to negotiate in good faith pursuant to CPLR 3408(f). In the event that the Supreme Court finds that the plaintiff did not meet its obligation to negotiate in good faith, it shall direct the parties to participate in further settlement conferences for the purposes of “determining whether the parties can reach a mutually agreeable resolution” of this action (CPLR 3804[a]) prior to considering and thereafter making a new determination, should the parties seek renewal, of those branches of the plaintiff’s motion which were for summary judgment on the complaint and to strike the defendant’s answer, and the defendant’s cross motion for leave to amend her answer. In the event that the Supreme Court finds that the plaintiff did meet its obligation to negotiate in good faith, it shall thereafter make a new determination, should the parties seek renewal, of the subject branches of the plaintiff’s motion and the defendant’s cross motion.

SKELOS, J.P., HALL, SGROI and BARROS, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

NYT-

The Promontory Financial Group occupies a position of trust in the global financial system, acting as a consultant to big banks, foreign nations and the Vatican. Its influence has soared over the years, positioning it as a sort of shadow regulator that provides government authorities with a window into bank misconduct. And the firm’s political ties run deep, thanks to its founder and chief executive, Eugene A. Ludwig, a former top banking regulator and a law school friend of Bill Clinton.

But an important driver of Promontory’s success — guiding New York State banks through regulatory problems — is now in jeopardy, and so is the firm’s reputation for independence.
Continue reading the main story

On Monday, New York State’s financial regulator effectively suspended Promontory from conducting most assignments for banks that are licensed in New York State and suspected of wrongdoing. The decision to suspend the firm indefinitely, an unusually aggressive move even for the Department of Financial Services, a New York agency known to scuffle with Wall Street, was detailed in a report that accused Promontory of helping to obscure some of the same bank misconduct it was supposed to unearth.

[NEW YORK TIMES]

 

I. Summary
The New York State Department of Financial Services (the “Department”) was created in 2011 to help ensure the safety and soundness of New York’s banking, insurance and financial services industries, to help ensure prudent conduct by providers of financial products and services, and to promote the reduction and elimination of unethical conduct by and with respect to banking, insurance and other financial services institutions. Pursuant to this mandate, on September 4, 2013, the Department undertook an investigation into Promontory Financial Group, LLC (“Promontory”). The conduct in question relates to reports that Promontory prepared and submitted to the Department in 2010-2011 detailing the findings of its review of certain transactions by Standard Chartered Bank (“Standard Chartered” or the “Bank”), an institution regulated by the Department.

The Department’s extensive, two-year investigation included the collection and review of thousands of documents, the taking of sworn testimony of five current and two former employees of Promontory, including two managing directors and the Chief Operating Officer, and the review of four written submissions made by Promontory’s counsel over the course of the investigation (including reports by four purported experts hired by Promontory). After careful consideration of the documents, testimony and submissions:

The investigation shows that Promontory exhibited a lack of independent judgment in the preparation and submission of certain reports to the Department in 2010-2011; and

Certain testimony regarding key issues provided by the Promontory witnesses during the course of the Department’s investigation lacked credibility.

Accordingly, the Superintendent has determined that the ends of justice and the public advantage would not be served by providing Promontory with access to confidential supervisory information pursuant to New York State Banking Law § 36(10). Therefore, the Department will review all pending and future requests to provide Promontory with confidential supervisory information under Section 36(10) and, barring any change in circumstances, the Department intends to deny all such requests until further notice.

[…]

image: American Banker

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NEW YORK SUPREME COURT – QUEENS COUNTY

HSBC BANK USA, etc.,
Plaintiff(s),

– against –

ROBERT SAN-MIGUEL, et al.,

Excerpt:
Plaintiff has failed to meet its burden in order to properly confer its standing. Initially,
plaintiff’s reliance upon the written assignment is insufficient since plaintiff failed to
demonstrate that MERS was either the holder or assignee of the note when the instrument
was purportedly assigned by the instrument dated September 18, 2009, or that it had the
authority to execute assignments on behalf of the originator of the loan (see Homecomings
Financial, LLC v Guldi, 108 AD3d 506 [2013]; Deutsche Bank Natl. Trust Co. v Spanos, 102
AD3d 909 [2013]; Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680 [2012]; Bank of
New York v Silverberg, 86 AD3d 274 [2011]).

Furthermore, Ms. Vera’s affidavit, other than her mere declaration that she knows
plaintiff has been assigned the note – without any detail as to, inter alia, the date of the
assignment – it would appear that her knowledge stems, at least in part, from the written
assignment, said assignment being defective for the reasons noted, supra. To the extent she
relies on the affirmation of plaintiff’s counsel, plaintiff’s counsel has not demonstrated
personal knowledge of when plaintiff came into possession or ownership of the loan
documents.

Moreover, while it is noted that plaintiff may rely on physical delivery of the note
alone, the fact that: (1) the allonge following the note is undated; (2) Ms. Vera is silent on
the circumstances surrounding delivery of the note (see U.S. Bank Nat. Assn. v Faruque, 120
AD3d 575 [2014]; Homecomings Financial, LLC v Guldi, 108 AD3d at 509; HSBC Bank
USA v Hernandez, 92 AD3d 843 [2012]); and (3) a second allonge is inexplicably submitted,
same being apparently attached to the defective written assignment and not to the note, as the
terms of the allonge – and established case and statutory law (see e.g. UCC § 3-202 [2]) –
require, warrant denial of the motion for summary judgment. Even assuming the second
allonge were sufficient, plaintiff presents no proof that Ocwen had the authority to execute
same on Delta’s behalf. Indeed, the only power of attorney provided was the one as it relates
to plaintiff.

Notwithstanding issues of standing, plaintiff has not established that it complied with
certain conditions precedent to suit. Namely, defendants, in their answer, denied paragraph
ninth of the complaint which alleges that no payment was made, despite demand. The
mortgage requires the lender, prior to declaring the entire balance due and commencing
foreclosure, send a notice of default which, inter alia, provides for an option to cure the
default. Plaintiff has not submitted proof that such a notice was sent. Ms. Vera’s contention
that “[i]ndeed, an acceleration letter was sent” is insufficient to prove same. Her contention
that follows, that “the declaration to accelerate contained in this very paragraph of the
complaint serves, as a matter of law . . . as that very election to accelerate,” is without
foundation.

Finally, it is noted that, in opposition to the motion, defendants point out that plaintiff,
a trust, may not have complied with, inter alia, its Mortgage Loan Sale and Contribution
Agreement regarding transfer of ownership of the subject loan documents.

 

[…]

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Decided on July 29, 2015

SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Second Judicial Department

PETER B. SKELOS, J.P.
L. PRISCILLA HALL
SANDRA L. SGROI
BETSY BARROS, JJ.

2013-09197
(Index No. 22274/09)

 

Hogan Lovells US, LLP, New York, N.Y. (David Dunn, Chava Brandriss, and Heather R. Gushue of counsel), for appellant.

Law Office of Alan J. Sasson, P.C., Brooklyn, N.Y. (Yitzchak Zelman of counsel), for respondents.

 

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Kings County (Saitta, J.), dated June 11, 2013, which granted the motion of the defendants Svetlana Roumiantseva and Iouri Roumiantsev to dismiss the complaint for lack of standing.

ORDERED that the order is affirmed, with costs.

Where the issue of standing is raised by a defendant, a plaintiff must prove its standing in order to be entitled to relief (see HSBC Bank USA, N.A. v Calderon, 115 AD3d 708, 709; Bank of N.Y. v Silverberg, 86 AD3d 274, 279; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753). A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it is either the holder or assignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v Taylor, ____ NY3d ____, ____, 2015 NY Slip Op 04872, * 3-4 [2015]; see Kondaur Capital Corp. v McCary, 115 AD3d 649, 650; Bank of N.Y. v Silverberg, 86 AD3d at 279). “The plaintiff may demonstrate that it is the holder or assignee of the underlying note by showing either a written assignment of the underlying note or the physical delivery of the note” (U.S. Bank Na. v Guy, 125 AD3d 845, 846-847; Kondaur Capital Corp. v McCary, 115 AD3d at 650). “As a general matter, once a promissory note is tendered to and accepted by an assignee, the mortgage passes as an incident to the note. However, the transfer of the mortgage without the debt is a nullity, and no interest is acquired by it because a mortgage is merely security for a debt or other obligation and cannot exist independently of the debt or obligation” (Deutsche Bank Natl. Trust Co. v Spanos, 102 AD3d 909, 911; see Citibank, N.A. v Herman, 125 AD3d 587, 588; see Aurora Loan Servs., LLC v Taylor, ____ NY3d ____, ____, 2015 NY Slip Op 04872 at * 4; Bank of N.Y. v Silverberg, 86 AD3d at 280).

On a defendant’s motion to dismiss the complaint based upon a plaintiff’s alleged lack of standing, the burden is on the defendant to establish, prima facie, the plaintiff’s lack of standing as a matter of law (see U.S. Bank N.A. v Guy, 125 AD3d at 847; HSBC Mtge. Corp. [USA] v MacPherson, 89 AD3d 1061, 1062). “To defeat the motion, a plaintiff must submit evidence which raises a question of fact as to its standing” (U.S. Bank N.A. v Guy, 125 AD3d at 847; US Bank N.A. v Faruque, 120 AD3d 575, 578; Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680, 683).

Here, in support of their motion to dismiss the complaint, the defendants Svetlana Roumiantseva and Iouri Roumiantsev (hereinafter together the defendants) submitted the plaintiff’s response to their demand for documents supporting the plaintiff’s purported basis for standing set forth in the complaint. The plaintiff allegedly obtained its right to foreclose by way of an assignment of the mortgage and note from Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), acting as nominee for the original lender. However, the documents showed that MERS was never the holder of the note and, therefore, was without authority to assign the note (see Citibank, N.A. v Herman, 125 AD3d 587, 589). As a result, the defendants demonstrated, prima facie, that the plaintiff’s purported basis for standing was not valid.

In opposition, the plaintiff submitted, among other things, a copy of an endorsement in blank dated December 7, 2006. Thereafter, the Supreme Court directed the plaintiff to produce the original note and the endorsement (see CPLR 3212[c]). The endorsement was attached to the original note by only a paperclip. UCC 3-202 provides that “an indorsement must be written by or on behalf of the holder and on the instrument or on a paper so firmly affixed thereto as to become a part thereof.” Here, the purported endorsement, attached by a paperclip, was not so firmly affixed to the note as to become a part thereof (see UCC 3-202[2], Comment 3; Slutsky v Blooming Grove Inn, 147 AD2d 208, 212; cf. U.S. Bank N.A. v Guy, 125 AD3d at 847; Deutsche Bank Trust Co. Ams. v Codio, 94 AD3d 1040, 1041). As such, the purported endorsement did not constitute a valid transfer of the underlying note to the plaintiff.

The affidavit of the plaintiff’s servicing agent, which was improperly submitted for the first time in sur-reply, should not have been considered by the Supreme Court (see CPLR 2214; McMullin v Walker, 68 AD3d 943, 944; Flores v Stankiewicz, 35 AD3d 804).

Accordingly, the Supreme Court properly granted the defendants’ motion to dismiss the complaint for lack of standing.

SKELOS, J.P., HALL, SGROI and BARROS, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

New York Times-

After Lucy Circe became disabled and could no longer work, she applied to Bank of America for a mortgage loan modification on her Vermont home. Over more than two years, starting in 2012, the bank repeatedly requested copies of documents that had already been provided, asked for proof that she was no longer married to a man she did not even know, and made other errors, like asking why Ms. Circe had indicated that she didn’t want to keep her property when she had actually told the bank she did.

None of it made sense. But a disturbing report on the federal government’s Home Affordable Modification Program issued on Wednesday suggests that Ms. Circe’s experience was anything but unique.
Continue reading the main story

Advertised in 2009 as a lifeline for as many as four million troubled borrowers, the program was one of the Obama administration’s signature efforts to help homeowners. But the report, by Christy L. Romero, the government official with authority to monitor the program, shows that six years later, just 887,001 borrowers are participating in loan modifications — deals that reduce the costs of mortgages.

It appears that the program has allowed big banks to run roughshod over borrowers again and again.

[NEW YORK TIMES]

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