90 Day Notice By Attorney

Can the 90 Day Pre-foreclosure Notices be mailed to the Borrowers by Counsel for the Lender?

RPAPL § 1304 requires that at least 90 days prior to its commencement of a residential foreclosure, the plaintiff must send to county where registered or certified mail and by first class mail, notice giving it warning of its default and the Defendant’s need to cure its mortgage loan within ninety (90) days and provides a list of at least five (5) local housing counseling agencies that serve the County  where the Defendants/borrowers reside.

Subdivision 2 of the Statute specifically provides that “the notices required by this section shall be sent by such lender, assignee (including purchasing investor) or mortgage loan servicer to the borrower, by registered or certified mail and also by first class mail to the last known address of the borrower, and to the residence that is the subject of the mortgage…”

While the statute does not specifically grant the authorization to counsel for the lender, assignee or mortgage servicer to send the 90-day notices, the New York State Courts have ruled that counsel for the original lender, the assignee or the mortgage loan servicer could send the notices. I believe that the Courts have erred in their interpretation of the statute to permit attorneys for the specified entities to be included in the class of persons permitted to send the notices. If the legislature intended on having counsel send the 90 Day Notices to the Borrowers prior to the commencement of the foreclosure action, the legislature clearly could have included the words “or their attorneys” in the statute.

In Flagstar Bank, FSB v. Mendoza, 139 AD3d 898, 32 NYS3d 278 (2nd Dept. 2016), the Appellate Court held that RPAPL §1304 does not preclude an attorney acting on behalf of the lender from sending the 90-day notices. This case has been the leading authority for the Courts approval of 90 Day Notices that were sent by counsel for the Plaintiffs in foreclosure actions. Generally where counsel for the lender, servicer or the assignee send the notices, the same attorney would commence the foreclosure action upon the expiration of the 90 Day period.

If  the attorney’s office mailed the 90 Day Notices, what proof of service is required?

In order to prove compliance with the statute, counsel must prove proof of the actual mailing day notices. It would not be sufficient for counsel to simply rely on a barebones Affidavit of Service that alleges that the notices were mailed to the Borrowers at a certain address on a certain day.

In Ventures Trust 2013-I-H-R By MCM Capital Partners, LLC v. Williams, 184 Ad3d 893, 127 NYS3d 36 (2^nd Dept 2020), the Court held that “the unsubstantiated and conclusory statement of the plaintiff’s attorney in an affidavit submitted in support of the motion that RPAPL 1304 notice was properly mailed to the defendant is insufficient to establish compliance with the statute as a matter of law.” Citing Central Mortgage Co. v. Abraham, 150 AD3d 961, 55 NYS3d 336; Citibank, NA v. Wood, 150 Ad 3d at 814, 55 NYS3d 109).

In the Flagstar Bank, FSB v. Mendoza case, the Court  found that the Plaintiff had established compliance with the statute regarding the mailing of the 90 day notices where the attorney submitted an affidavit, which described the firm’s standard business practice with regard to sending the notices to borrowers, and affirmed based upon the review of the business records pertaining to the subject loan, that the notices were sent in compliance with the statute and the plaintiff submitted copies of the notices, domestic return receipts, with date of delivery and signature of one of the borrowers.

Where the Plaintiff’s attorney fails to produce an official marked USPS Certified Mailing Certificate for the alleged mailing of the notices, the Plaintiff’s counsel would have difficulty proving that the Plaintiff complied with RPAPL §1304. In many foreclosure cases, the Plaintiff cannot produce the evidence of the actual mailing of the 90 Day notices by certified and first class mail.

Where counsel for the Plaintiff mailed the 90 Day Notices prior to its commencement of the foreclosure action and the Defendant subsequently contests the service of the 90 Day Notices, this could be problematic for Plaintiff’s counsel. For instance, in certain cases, the Court has denied the Plaintiff summary judgment and an Order striking the Defendant’s affirmative defense in the Answer that the Plaintiff failed to comply with RPAPL §1304. The Courts have scheduled a hearing to take evidence and determine whether there is sufficient proof of the mailing of the 90 Day Notices. Counsel for the Plaintiff would be in the odd and uncomfortable position of testifying on behalf of the Plaintiff regarding the process and office procedures for the mailing of the notices. I can foresee other issues when counsel mails out the 90 Day Notices. What if the paralegal that mailed the Notice and signed the Affidavit of mailing no longer works for the firm? Will this person cooperate and appear in Court to testify? If they left under unfavorable circumstances, will counsel subpoena this person to appear in Court. Will the person be a “hostile witness”?

In the case of Deutsche Bank National Trust Company v. Dennis, 181 Ad3d 864, 122 AD3d 95 (2^nd Dept. 2020), the Plaintiff failed to provide the Court with adequate proof that the 90 Day Notices were actually mailed and the Court held that:

“Here, the plaintiff failed to submit an affidavit of mailing or proof of mailing by the United States Postal Service evidencing that it properly mailed notice to the defendant pursuant to RPAPL 1304. Instead, the plaintiff relied on an affidavit of Rashad Blanchard, who was employed as a loan analyst by the parent company of the plaintiff’s loan servicer, and copies of the purported notices. The plaintiff submitted only one letter that purported to constitute the statutorily required 90–day notice of default, dated December 22, 2008. Although the letter contained the statement “sent via certified mail,” with a 20–digit number below it, no receipt or corresponding document issued by the United States Postal Service was submitted proving that the letter was actually sent by certified mail more than 90 days prior to commencement of the action. The plaintiff also failed to submit any documentary evidence that notice was sent by first-class mail. Further, Blanchard did not aver that the notice was sent in the manner required pursuant to RPAPL 1304, i.e., by certified mail and first-class mail. Moreover, since he did not aver that he personally mailed the notice, or that he was  familiar with the mailing practices and procedures of American Home Mortgage Servicing, Inc., the entity that purportedly sent the notices, he did not establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed (see U.S. Bank N.A. v. Offley, 170 A.D.3d 1240, 1242, 97 N.Y.S.3d 307; U.S. Bank N.A. v. Henderson, 163 A.D.3d 601, 603, 81 N.Y.S.3d 80; Bank of Am., N.A. v. Wheatley, 158 A.D.3d 736, 738, 73 N.Y.S.3d 88).

Since the plaintiff failed to provide evidence of the actual mailing by either certified mail or first-class mail, “or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure … the plaintiff failed to establish, prima facie, that it complied with RPAPL 1304” (Citibank, N.A. v. Conti–Scheurer, 172 A.D.3d at 21, 98 N.Y.S.3d 273 [citations and internal quotation marks omitted]; see JPMorgan Chase Bank, N.A. v. Grennan, 175 A.D.3d 1513, 1518, 109 N.Y.S.3d 436; U.S. Bank N.A. v. Cope, 175 A.D.3d 527, 107 N.Y.S.3d 104). Plaintiff’s Exhibit E shows that Wells Fargo hired disgraced attorney Steven J. Baum P.C. to serve the 90 Day Notice however, in plaintiffs 200 plus age motions, there is not one page from Wells Fargo’s servicer, Steven J. Baum P.C., certifying or showing with actual firsthand knowledge any proof that he sent 90 Day Notices.”

In LNV Corp. v. Allison, 206 AD3d 710, 170 NYS3d 162 (2^nd Dept. 2022), the Appellate Division held that:

“Proof of the requisite mailing can be established with “proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure” (Citibank, N.A. v. Conti–Scheurer, 172 A.D.3d 17, 21, 98 N.Y.S.3d 273 [internal quotation marks omitted]; see LNV Corp. v. Sofer, 171 A.D.3d at 1036, 98 N.Y.S.3d 302).

 Here, although the plaintiff submitted a certified mail receipt, the receipt did not contain a postal stamp, indication that postage was paid, or an attendant signature, and the plaintiff did not submit any United States Postal Service tracking information (cf. Ditech Fin., LLC v. Naidu, 198 A.D.3d 611, 614, 156 N.Y.S.3d 27). The affidavit of Nancy Sczubleski, submitted by the plaintiff for the first time in opposition to the defendant’s cross motion, also failed to establish strict compliance with RPAPL 1304. Sczubleski did not have personal knowledge of the purported mailing (see Citibank, N.A. v. Conti–Scheurer, 172 A.D.3d at 20–21, 98 N.Y.S.3d 273; LNV Corp. v. Sofer, 171 A.D.3d at 1037, 98 N.Y.S.3d 302). Furthermore, while Sczubleski averred that she was familiar with the plaintiff’s mailing practices and procedures, the notices submitted by the plaintiff in support of its motion for summary judgment indicate that they were not mailed by the plaintiff, but rather were mailed by an entity known as MGC Mortgage, Inc. (hereinafter MGC). Sczubleski, who stated in her affidavit that she was employed by Dovenmuehle Mortgage, Inc., a sub-servicer of the loan, does not address this fact at all, let alone demonstrate that she was familiar with MGC’s mailing practices and procedures (see Citibank, N.A. v. Conti–Scheurer, 172 A.D.3d at 20–21, 98 N.Y.S.3d 273; LNV Corp. v. Sofer, 171 A.D.3d at 1037, 98 N.Y.S.3d 302).”

The Plaintiff in a foreclosure action is required to establish that a Notice pursuant to RPAPL § 1304 was properly served on Defendant. The burden of proof is on the Plaintiff. The Defendant/Borrower is not required to prove that he did not receive the notice.  Unfortunately, some Supreme Court Justices appear to place the burden on the Defendant to prove that he/she did not receive the 90 Day Notices. This is a misplacement of the burden of proof. The Plaintiff bears the entire burden of proving that it complied with RPAPL §1304

The Court is obligated to deny the Plaintiff summary judgment, regardless of the sufficiency of the opposition papers or the lack thereof, when the Plaintiff does not meet its prima facie burden by proving that it complied with the statute.

“Strict compliance with RPAPL 1304 notice to the borrowers is a condition precedent to the commencement of the foreclosure action.” Citibank v. Conti-Scheurer, 172 AD3d 17, 20, 98 NYS3d 273 (2^nd Dept. 2019). The Respondent had the burden of proving its compliance with the statutory mandate by mailing proper 90 Day Notices. See Aurora Loan Services v. Weisblum, 85 AD3d 95, 106, 923 NYS2d 609 (2^nd Dept. 2011).