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.
STATE OF NEW YORK
________________________________________________________________________
7264
2011-2012 Regular Sessions
IN ASSEMBLY
April 25, 2011
___________
Introduced by M. of A. WEINSTEIN, P. RIVERA, MAISEL, ROBINSON, LANCMAN,
BARRON, ABINANTI, BRAUNSTEIN, BRONSON, COLTON, DINOWITZ, GALEF,
HIKIND, JAFFEE, MARKEY, M. MILLER, REILLY, ROBERTS, RUSSELL, SCARBOR-
OUGH, WEPRIN, WRIGHT, ZEBROWSKI -- Multi-Sponsored by -- M. of A.
BRENNAN, COOK, FARRELL, GLICK, GOTTFRIED, GUNTHER, HEASTIE, JEFFRIES,
LENTOL, McENENY, PHEFFER, SCHIMEL, SWEENEY -- read once and referred
to the Committee on Judiciary
AN ACT to amend the civil practice law and rules, in relation to resi-
dential foreclosure actions; and to amend the real property actions
and proceedings law, in relation to standing to commence an action to
foreclose a mortgage
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision (a) of rule 3212 of the civil practice law and
2 rules, as amended by chapter 492 of the laws of 1996, is amended and a
3 new subdivision (j) is added to read as follows:
4 (a) Time; kind of action. [Any] Except as otherwise provided in this
5 rule, any party may move for summary judgment in any action, after issue
6 has been joined; provided however, that the court may set a date after
7 which no such motion may be made, such date being no earlier than thirty
8 days after the filing of the note of issue. If no such date is set by
9 the court, such motion shall be made no later than one hundred twenty
10 days after the filing of the note of issue, except with leave of court
11 on good cause shown. In any residential foreclosure action involving a
12 home loan, to which section thirteen hundred four of the real property
13 actions and proceedings law applies, in which the defendant is a resi-
14 dent of the property subject to foreclosure, a motion for summary judg-
15 ment shall be denied unless and until a mandatory settlement conference
16 has been held pursuant to rule 3408 of this chapter, and the court has
17 concluded that no further such conferences should be scheduled in an
18 attempt to resolve the matter in accordance with such rule.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09828-02-1
A. 7264 2
1 (j) Standards for summary judgment in cases involving residential
2 foreclosure. A motion for summary judgment in an action involving a home
3 loan, to which section thirteen hundred four of the real property
4 actions and proceedings law applies, in which the defendant is a resi-
5 dent of the property subject to foreclosure, shall not be granted to a
6 plaintiff seeking to foreclose upon a mortgage or a note, unless the
7 plaintiff has set forth in an affidavit by a person with knowledge of
8 the facts as required by subdivision (b) of this rule:
9 1. that plaintiff has demonstrated that it has satisfied its obli-
10 gation to deal with defendant in good faith as required by the implied
11 covenant of fair dealing and good faith contained within the mortgage,
12 in its dealings with the defendant both prior and subsequent to defend-
13 ant's execution of the mortgage and note, through commencement of the
14 instant action, including but not limited to any inducements to execute
15 same, and any modification sought by defendant to said mortgage and/or
16 note;
17 2. that plaintiff holds, owns and physically possesses the note and
18 the mortgage;
19 3. that plaintiff can demonstrate the chain of custody of both the
20 note and the mortgage from the time same was executed by the defendant,
21 through to the time of commencement of the instant action;
22 4. that plaintiff has standing to bring the instant action;
23 5. that plaintiff possesses capacity to bring the instant action; and
24 6. that plaintiff has attended a mandatory settlement conference as
25 required by rule 3408 of this chapter, and has negotiated in good faith,
26 at all times, including any adjourned dates, in attempting to reach a
27 mutually agreeable resolution as required by subdivision (f) of such
28 rule.
29 § 2. Subdivision (f) of section 3215 of the civil practice law and
30 rules, as amended by chapter 453 of the laws of 2006, is amended to read
31 as follows:
32 (f) Proof. On any application for judgment by default, the applicant
33 shall file proof of service of the summons and the complaint, or a
34 summons and notice served pursuant to subdivision (b) of rule 305 or
35 subdivision (a) of rule 316 of this chapter, and proof of the facts
36 constituting the claim, the default and the amount due by affidavit made
37 by the party, or where the state of New York is the plaintiff, by affi-
38 davit made by an attorney from the office of the attorney general who
39 has or obtains knowledge of such facts through review of state records
40 or otherwise. Where a verified complaint has been served, it may be used
41 as the affidavit of the facts constituting the claim and the amount due;
42 in such case, an affidavit as to the default shall be made by the party
43 or the party's attorney. In an action arising out of an action involv-
44 ing a home loan, to which section thirteen hundred four of the real
45 property actions and proceedings law applies, in which the defendant is
46 a resident of the property subject to foreclosure, the applicant shall
47 include an affidavit from a person with knowledge of the facts:
48 1. that plaintiff has demonstrated that it has satisfied its obli-
49 gation to deal with defendant in good faith as required by the implied
50 convent of fair dealing and good faith contained within the mortgage, in
51 its dealings with the defendant both prior and subsequent to defendant's
52 execution of the mortgage and note, through commencement of the instant
53 action, including but not limited to any inducements to execute same,
54 and any modification sought by defendant to said mortgage and/or note;
55 2. that plaintiff holds, owns and physically possesses the note and
56 the mortgage;
A. 7264 3
1 3. that the plaintiff can demonstrate the chain of custody of both the
2 note and the mortgage from the time same was executed by the defendant,
3 through to the time of commencement of the instant action;
4 4. that plaintiff has standing to bring the instant action;
5 5. that plaintiff possesses capacity to bring the instant action; and
6 6. that plaintiff has attended a mandatory settlement conference as
7 required by rule 3408 of this chapter, and has negotiated in good faith,
8 at all times, including any adjourned dates, in attempting to reach a
9 mutually agreeable resolution as required by subdivision (f) of such
10 rule.
11 When jurisdiction is based on an attachment of property, the affidavit
12 must state that an order of attachment granted in the action has been
13 levied on the property of the defendant, describe the property and state
14 its value. Proof of mailing the notice required by subdivision (g) of
15 this section, where applicable, shall also be filed.
16 § 3. Subdivisions (a) and (f) of rule 3408 of the civil practice law
17 and rules, subdivision (a) as amended and subdivision (f) as added by
18 chapter 507 of the laws of 2009, are amended to read as follows:
19 (a) In any residential foreclosure action involving a home loan [as
20 such term is defined in section], to which section thirteen hundred four
21 of the real property actions and proceedings law applies, in which the
22 defendant is a resident of the property subject to foreclosure, the
23 court shall hold a mandatory conference within sixty days after the date
24 when proof of service is filed with the county clerk, or on such
25 adjourned date as has been agreed to by the parties, for the purpose of
26 holding settlement discussions pertaining to the relative rights and
27 obligations of the parties under the mortgage loan documents, including,
28 but not limited to determining whether the parties can reach a mutually
29 agreeable resolution to help the defendant avoid losing his or her home,
30 and evaluating the potential for a resolution in which payment schedules
31 or amounts may be modified or other workout options may be agreed to,
32 and for whatever other purposes the court deems appropriate.
33 (f) Both the plaintiff and defendant shall negotiate in good faith, as
34 required by the implied covenant of fair dealing contained within the
35 mortgage, to reach a mutually agreeable resolution, including a loan
36 modification, if possible. The duty to negotiate in good faith shall
37 continue throughout the pendency of the action.
38 § 4. Subdivision 1 of section 1302 of the real property actions and
39 proceedings law, as amended by chapter 472 of the laws of 2008, is
40 amended to read as follows:
41 1. Any complaint served in a proceeding initiated pursuant to this
42 article relating to a high-cost home loan or a subprime home loan, as
43 such terms are defined in section six-l and six-m of the banking law,
44 respectively, must contain an affirmative allegation that at the time
45 the proceeding is commenced, the plaintiff[:
46 (a) is the owner and holder of the subject mortgage and note, or has
47 been delegated the authority to institute a mortgage foreclosure action
48 by the owner and holder of the subject mortgage and note; and
49 (b)] has complied with all of the provisions of section five hundred
50 ninety-five-a of the banking law and any rules and regulations promul-
51 gated thereunder, section six-l or six-m of the banking law, and subdi-
52 vision two of section thirteen hundred two-a and section thirteen
53 hundred four of this article.
54 § 5. The real property actions and proceedings law is amended by
55 adding a new section 1302-a to read as follows:
A. 7264 4
1 § 1302-a. Standing to commence an action. 1. No person shall have
2 standing to commence an action pursuant to this article unless it is the
3 owner and holder of the subject mortgage and note, or has been delegated
4 the authority to institute a mortgage foreclosure action by the owner
5 and holder of the subject mortgage and note. Notwithstanding the
6 provisions of subdivision (e) of rule thirty-two hundred eleven of the
7 civil practice law and rules, any defense based on the plaintiff's lack
8 of standing in a foreclosure proceeding shall not be waived if a defend-
9 ant fails to raise the defense in a responsive pleading or pre-answer
10 motion to dismiss.
11 2. Every summons and complaint to commence a foreclosure action shall
12 include an affirmative allegation that at the time the proceeding is
13 commenced, the plaintiff is the owner and holder of the subject mortgage
14 and note, or has been delegated the authority to institute a mortgage
15 foreclosure action by the owner and holder of the subject mortgage and
16 note. In addition, the plaintiff shall plead in its complaint that the
17 originals of the subject mortgage and note are in its possession and
18 control, and that such plaintiff is otherwise entitled to enforce the
19 subject mortgage and note pursuant to law.
20 3. There shall be filed with every summons and complaint to commence a
21 foreclosure action:
22 (a) a copy of the original subject mortgage and note, and proof of the
23 ownership thereof including all original endorsements, assignments and
24 transfers of such mortgage and note; and
25 (b) if applicable, proof of delegation of authority from the owner and
26 holder of the subject mortgage and note to institute a mortgage foreclo-
27 sure action on behalf of such owner and holder.
28 4. The court shall make an affirmative finding of standing which shall
29 be included in the judgment of foreclosure and sale.
30 § 6. This act shall take effect immediately, provided that the amend-
31 ments to subdivision (a) of rule 3408 of the civil practice law and
32 rules, made by section three of this act, shall not affect the expira-
33 tion and reversion of such subdivision and shall expire therewith, and
34 provided, further, that section four of this act and subdivisions 2 and
35 3 of section 1302-a of the real property actions and proceedings law, as
36 added by section five of this act, shall take effect on the ninetieth
37 day after it shall have become a law.
