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(347)-508-9316What proof is required by the Plaintiff to discharge an allegedly erroneous Satisfaction of Mortgage?
In the practice of foreclosure litigation, I have encountered situations where the Mortgagee commences a Quiet Title action to expunge an erroneous Satisfaction of Mortgage. In other cases, the Mortgagee may seek this relief as a separate cause of action in its foreclosure complaint.
If the Mortgagee’s request for this relief is contested, the Courts are forced to examine the actual evidence offered by the Plaintiff and determine whether the Plaintiff has made out its prima facie case. In cases where the underlying mortgage has been assigned multiple time, the Plaintiff may not be able to obtain an Affidavit attesting to the erroneous execution of the Satisfaction or Discharge of the mortgage. In these situations, the Court should deny the Plaintiff’s request for an Order declaring the Satisfaction of Mortgage to be null and void.
In US Bank National Association v. Kandra, 197 AD3d 590 (2nd Dept. 2021), the Appellate Department reversed the lower court Order granting the Mortgagee’s cross motion to vacate an erroneous Discharge of Mortgage. The Second Department ruled that:
- “However, the plaintiff failed to establish its entitlement to the relief sought. In support of its cross motion to expunge the satisfaction of mortgage, the plaintiff submitted, inter alia, the affidavit of Denise Dickman, an assistant vice president of HSBC, the plaintiff’s loan servicer, who averred that she was familiar with the business records maintained by HSBC for the purpose of servicing mortgage loans for the plaintiff and that she had personal knowledge of the manner in which those business records were created. Dickman further averred that the satisfaction of mortgage was intended to be recorded against the second mortgage, under which the defendant had defaulted and which HSBC had “charged off as uncollectable.” However, “[d]ue to a clerical error, a loan number was not included with the processing request for the charge off,” and, consequently, a satisfaction of mortgage was “prepared, executed and filed in error” against the first mortgage.
- Since Dickman attested that she was familiar with HSBC’s record-keeping practices and procedures, her affidavit laid a proper foundation for the admission of the business records on which she relied in asserting that the satisfaction of mortgage was erroneously filed due to a clerical error (cf. U.S. Bank N.A. v. Martin, 144 A.D.3d 891, 892, 41 N.Y.S.3d 550). However, Dickman’s assertions as to the contents of those records were inadmissible since the records themselves were not submitted with her affidavit (see American Home Mtge. Servicing, Inc. v. Carnegie, 181 A.D.3d 632, 121 N.Y.S.3d 148; Bank of N.Y. Mellon v. Gordon, 171 A.D.3d 197, 205–206, 97 N.Y.S.3d 286). Therefore, her averments were inadmissible hearsay and lacked probative value (see Nationstar Mtge., LLC v. Cavallaro, 181 A.D.3d 688, 689, 117 N.Y.S.3d 866).”
In US Bank National Association v. Noble, 144 AD3d 788, 41 NYS3d 79 (2nd Dept. 2016), the Appellate Court ruled that:
- “the plaintiff failed to demonstrate, prima facie, that the satisfaction of mortgage was erroneously or fraudulently issued (cf. Mortgage Elec. Registration Sys., Inc. v. Smith, 111 A.D.3d 804, 806, 975 N.Y.S.2d 121). Mitcherson stated in her affidavit that, “[p]ursuant to Rushmore’s business records as servicer for the loan,” the loan was “never satisfied, paid off, or discharged and remained a valid existing lien at all times while [ ] serviced by Rushmore.” However, the satisfaction of mortgage was dated September 29, 2012, and was recorded on December 5, 2012. Mitcherson stated in her affidavit that the plaintiff took possession of the note and mortgage on December 31, 2012, and that Rushmore became the servicer of the note on January 25, 2013. Therefore, Mitcherson could not establish the loan’s payment history up to the date of the satisfaction by relying on Rushmore’s records, but had to rely on the records of the plaintiff’s predecessor-in-interest. Since Mitcherson did not assert that she consulted or relied on the records of the plaintiff’s predecessor-in-interest, the plaintiff failed to establish, prima facie, that the satisfaction of mortgage was fraudulently or erroneously issued (see e.g. HSBC Mortgage Servcs., Inc. v. Royal, 142 A.D.3d 952, 37 N.Y.S.3d 321, 2016 N.Y. Slip Op 05973 [2d Dept.2016]; Citibank, N.A. v. Cabrera, 130 A.D.3d 861, 14 N.Y.S.3d 420).”
In the case of Green Tree Mortgage v. Michael young, et. al. Kings County Supreme Court Index # 511821/2015, the Plaintiff commenced an action to expunge and vacate a Satisfaction of its mortgage in the original sum of $308,750.00, which it alleges was erroneously filed with the City Registrar of Kings County on May 3, 2013. The Bank has not been able to obtain an Order declaring the Discharge of the Mortgage to have been erroneous and expunged. The main problem facing Green Tree and its assignees has been the fact that this loan has been transferred and assigned numerous times. The allegedly erroneous Satisfaction of Mortgage was executed by Bank of America and apparently an Affidavit could not be obtained from either the person who actually executed the Satisfaction or anyone affiliated with Bank of America.
By Order dated January 10, 2023 and entered on February 15, 2023, the Hon. Carl J. Landicino ruled that: “the Plaintiff has failed to demonstrate, prima facie, that the satisfaction of mortgage was erroneously or fraudulently issued.”
In support of its motion, the Plaintiff had provided an Affidavit of Nathaniel Tincher, a VP of Selene Finance, LP, as the servicer and attorney in fact for MTLGQ Investors, LP, the assignee of Green Tree. Our office asserted and the Court agreed that the Affidavit was hearsay and lacked probative value as no records from Selene Finance, MTLGQ, Green Tree Servicing, DITECH, Bank of America, Countrywide, First Magnus Corporation or MERS relating to the invalidity of the satisfaction of the mortgage or the outstanding indebtedness were arttached.
