4518 and foreclosures

This keeps on coming up with the foreclosure cases in the Second Department.

Deutsche Bank Natl. Trust Co. v Kenny, 183 AD3d 865 [2d Dept. 2020]

In Bank of N.Y. Mellon v Gordon (171 AD3d 197, 209 [2019]), this Court ruled that business records received from another entity “may be admitted into evidence if the recipient can establish personal knowledge of the maker’s business practices and procedures, or establish that the records provided by the maker were incorporated into the recipient’s own records and routinely relied upon the recipient in its own business.” In this case, the plaintiff did not meet that burden.

The testimony of the plaintiff’s witness indicated that SPS asked for business records from Bank of America in order to provide evidence of the plaintiff’s standing in this action. The records in question were forwarded to SPS in June 2016, after the issue of standing was referred to the Special Referee to hear and determine, and therefore, were created in preparation for litigation. Accordingly, those records were not admissible as business records (see Wilson v Bodian, 130 AD2d 221 [1987]).

Since the plaintiff, after a hearing, failed to establish standing to commence the instant action, we agree with the Supreme Court’s determination to direct dismissal of the action (see McCormack v Maloney, 160 AD3d 1098 [2018]).

Bank of N.Y. Mellon v Fontana, 186 AD3d 445 [2d Dept. 2020]

The Supreme Court should have denied the plaintiff’s motion, in effect, to confirm the referee’s report and for leave to enter a judgment of foreclosure and sale. In support of its motion, the plaintiff relied upon the affidavit of a representative of its loan servicer, who attested, based upon his review of the servicer’s books and records, to the amount due under the mortgage loan. However, the plaintiff’s affiant failed to annex or otherwise produce the subject business records. Under the circumstances, the affidavit relied upon by the plaintiff constituted inadmissible hearsay and lacked probative value, and the referee’s findings with respect to the total amount due upon the mortgage were not substantially supported by the record (see U.S. Bank N.A. v Calabro, 175 AD3d 1451 [2019]; Citimortgage, Inc. v Kidd, 148 AD3d 767, 768-769 [2017]; see also Bank of N.Y. Mellon v Gordon, 171 AD3d 197, 208-209 [2019]).

Ocwen Loan Servicing, LLC v Schacker, 185 AD3d 1041 [2d Dept. 2020]

In support of its motion, the plaintiff submitted the affidavit of a foreclosure specialist for Seterus, Inc. (hereinafter Seterus), which purports to be a subservicer for the Federal National Mortgage Association as assignee of the plaintiff as assignee of OneWest. The affidavit constitutes inadmissible hearsay, as the foreclosure specialist did not attest that he had personal knowledge of OneWest’s business practices and procedures (see Wells Fargo Bank, N.A. v Talley, 153 AD3d at 585), or that any records provided by OneWest were incorporated into Seterus’s own records (see State of New York v 158th St. & Riverside Dr. Hous. Co., Inc., 100 AD3d 1293, 1296 [2012]), and also did not submit any documents to show that OneWest possessed the note at the time of the commencement of this action (see CPLR 4518 [a]; U.S. Bank N.A. v 22 S. Madison, LLC, 170 AD3d 772 [2019]; Great Am. Ins. Co. v Auto Mkt. of Jamaica, N.Y., 133 AD3d 631, 632-633 [2015]). Since the foreclosure specialist also failed to establish a foundation to show that he had personal knowledge as to whether OneWest possessed the note prior to commencement of the action (see CPLR 3212 [b]; see generally Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 509 [2015]), the plaintiff failed to establish its standing. The documents attached to the affirmation of counsel for the plaintiff are inadmissible hearsay as counsel failed to establish a foundation for admission of such documents as business records and the foreclosure specialist’s affidavit does not reference the records attached to counsel’s affirmation (see U.S. Bank N.A. v 22 S. Madison, LLC, 170 AD3d at 774). Moreover, even if a proper foundation for the admissibility of the business records had been established, the submitted documents do not show that OneWest had ownership of and the right to enforce the note at the time of the commencement of the action (see id.). The plaintiff also failed to show OneWest’s standing based upon a purported written assignment of the mortgage from MERS to OneWest, as the plaintiff did not demonstrate that MERS had the authority to assign the note (see Homecomings Fin., LLC v Guldi, 108 AD3d at 509; Bank of N.Y. v Silverberg, 86 AD3d 274, 279 [2011]).

Compare, PennyMac Corp. v Arora, 184 AD3d 652 [2d Dept. 2020].

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