Washington Mut. Bank v Patterson

[*1] Washington Mut. Bank v Patterson 2008 NY Slip Op 52507(U) [21 Misc 3d 1145(A)] Decided on December 15, 2008 Supreme Court, Kings County Demarest, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 15, 2008
Supreme Court, Kings County

Washington Mutual Bank, Plaintiff,

against

Eugene Patterson; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., AS NOMINEE FOR WMC MORTGAGE CORP.; THE CITY OF NEW YORK ENVIRONMENTAL CONTROL BOARD; "JOHN DOE" AND "JANE DOE" said names being fictitious, it being the intention of Plaintiff to designate any and all occupants of premises being foreclosed herein, Defendants.



33435/07



Attorney for Plaintiff:

Fein, Such & Crane, LLP

28 East Main Street, Suite 1800

Rochester, NY 14614

Carolyn E. Demarest, J.

Plaintiff moves for an order of reference for a referee to ascertain and compute the amount due to the plaintiff in this action to foreclose a mortgage on real property situated in the County of Kings, State of New York, at 204 Jefferson Avenue, Brooklyn, NY 11216.It is critical for a plaintiff seeking judicial redress to have standing before this court. "If standing is denied, the pathway to the courthouse is blocked" (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 812 [2003], cert denied 540 US 1017 [2003]). "Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request" (Caprer v Nussbaum, 36 AD3d 176, 181 [2d Dept 2006]).

According to the documents submitted in support of plaintiff's motion, the plaintiff's action is predicated upon rights it presumed to acquire by virtue of an assignment from Mortgage Electronic Registration Systems, Inc. ("MERS") as Nominee for WMC Mortgage Corp. on September 17, 2007. This action was commenced by the filing of a summons and complaint on September 4, 2007, prior to the date of the written assignment. However, a plaintiff may not [*2]foreclose on a mortgage where the plaintiff does not have title to the mortgage (Kluge v Fugazy, 145 AD2d 537, 538 [2d Dept 1988]). The written assignment in the present matter from MERS states that the effective date of the assignment is July 29, 2007. "The crucial issue then is whether the written assignment, dated after the commencement of the action but stated to be effective on a date before the commencement, was effective to give plaintiff the requisite interest in the mortgage and thus standing to commence an action to foreclose" (Deutsche Bank Trust Co. Ams. v Peabody, 20 Misc 3d 1108A [Sup Ct, Saratoga County 2008]).

Where there is no evidence that plaintiff, prior to commencing the foreclosure action, was the holder of the mortgage and note, took physical delivery of the mortgage and note, or was conveyed the mortgage and note by written assignment, an assignment's language purporting to give it retroactive effect prior to the date of the commencement of the action is insufficient to establish the plaintiff's requisite standing (see Deutsche Bank,20 Misc 3d at 1108A (dismissing foreclosure action as plaintiff did not have an interest in the mortgage on the date of the action's commencement, and thus lacked standing to initiate the action, despite a retroactive effective date in the assignment of a mortgage); Countrywide Home Loans, Inc. v Taylor, 17 Misc 3d 595 [Sup Ct, Suffolk County 2007] (denying motion for order of reference due to plaintiff's lack of standing as retroactive date in assignment of mortgage to plaintiff was insufficient to establish plaintiff's ownership interest at the time the action was commenced); Countrywide Home Loans, Inc. v Hovanec, 15 Misc 3d 1115A [Sup Ct, Suffolk County 2007] (denying motion for order of reference as retroactive date in assignment was insufficient to establish plaintiff's ownership interest in the mortgage at the time the action was commenced and thus the court was unable to accept the affidavit in support of the motion by an officer of the plaintiff as a proper party affidavit pursuant to CPLR 3215(f)); Bankers Trust Co. v Hoovis, 263 AD2d 937 [3d Dept 1999] (rejecting "defendant's contention that plaintiff lacked standing based on the allegation that plaintiff did not obtain the assignment of mortgage until after the commencement of the action" where defendant did not contradict plaintiff's documentation that the note and mortgage were physically delivered to the plaintiff prior to the initiation of the action); Fremont Inv. & Loan v Laroc, 2008 NY Slip Op 52166U, *3-4 [Sup Ct, New York County 2008] (holding that plaintiff had standing to bring the foreclosure action where the equitable interest was transferred to the plaintiff by the physical delivery of the note and mortgage prior to the initiation of the action and it was undisputed that plaintiff was the holder of the mortgage and note from the outset despite the plaintiff's written assignment to itself after the commencement of the action "to avoid any objection to the standing of MERS as a nominee for the lender to bring a foreclosure action")).

The court recognizes, as explained by the Court of Appeals, that ownership interest in a mortgage may be transferred among MERS members without being publicly recorded (see Merscorp, Inc. v Romaine, 8 NY3d 90, 96 [2006]). However, unlike in Fremont, the relationship between the assignor and assignee is not clear in this matter and thus the plaintiff failed to demonstrate that it was the holder of the mortgage and note from the outset. Therefore the plaintiff failed to establish that it had standing to commence the present foreclosure action and the motion for an order of reference must be denied (see Fremont Inv. & Loan, 2008 NY Slip Op 52166U at *4; Countrywide Home Loans, Inc., 15 Misc 3d at 1115A).

Accordingly, the plaintiff's motion for Order of Reference is denied without prejudice. Plaintiff is granted leave to file a renewed motion for Order of Reference with supporting [*3]documents establishing plaintiff's ownership interest in the subject mortgage and note prior to the commencement of this foreclosure action within 90 days or this matter will be dismissed for lack of standing. In addition, upon renewal, plaintiff must submit an affidavit which indicates whether or not this is a residential foreclosure loan where the loan at issue is a subprime home loan as defined in the recently enacted Real Property Actions and Proceedings Law § 1304 or a high cost home loan as defined in Banking Law § 6-1.

The foregoing constitutes the decision and order of the court.

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J.S.C.