Aurora Loan Servs., LLC v Bajwa

[*1] Aurora Loan Servs., LLC v Bajwa 2010 NY Slip Op 51143(U) [28 Misc 3d 1204(A)] Decided on July 2, 2010 Supreme Court, Kings County Silber, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 2, 2010
Supreme Court, Kings County

Aurora Loan Services, LLC, Plaintiff,

against

Laeeq Bajwa, NEW YORK CITY ENVIRON- MENTAL CONTROL BOARD, ET AL., Defendant(s).



6607/09



Plaintiff's attorney

Steven J. Baum, P.C., P.O. Box 1291, Buffalo, NY 14240.

Debra Silber, J.

The plaintiff's ex parte application for appointment of a Referee to compute in this foreclosure proceeding, concerning property known as 450 Sapphire Street, Brooklyn, New York, and for an order "amending the Summons and Complaint, Affidavits of Service and any other pleading in this action which reflect an incorrect Block and Lot as BLOCK 4519 LOT 30, TENTATIVE LOT 125 be amended Nunc pro tunc to reflect that the correct Block and Lot is BLOCK 4519 LOT 124, and that the caption of said action be amended to reflect the same" is denied with leave to renew, as is explained below.

The Exhibits annexed to the papers, combined with the public internet web site known as ACRIS and maintained by the New York City Department of Finance, Office of the City Register, reflect that on September 27, 2006, the defendant purchased two homes on two lots on Block 4519, which are on Sapphire Street. and then, on December 28, 2006, he purchased two homes on two lots on Block 4518, (these are on Stanley Avenue). All four lots were purchased from the same seller, a developer of a planned unit development, and all four were on land in the process of being subdivided. All four properties purchased by defendant are now in various stages of foreclosure. For the two homes on Block 4519, the tentative lot numbers were 124 and 125, but the numbers actually assigned were 123 and 124. Lot 124 was Lot 30 (known as 450 Sapphire Street — the property at issue herein), and Lot 123 was lot 28 (known as 448 Sapphire Street). The deed for 450 Sapphire was recorded as Block 4519 Lot 125 (the metes and bounds say "previously known as Lots 30 & 28", which is not accurate, as it was just lot 30). However, none of the land was assigned Lot number 125. The deed for 448 Sapphire Street, described thereon as Lot 28 "to be known as 124" was recorded as Lot 28 but is now Lot 123 NOT 124. The easiest way to detect the error is by noting that former lot 30 is 30 feet wide, but former lot 28 is 20 feet wide. [*2]

To summarize, the deed for the tax lot at issue in this foreclosure was recorded against the tentative lot number instead of the existing lot number, and the tentative lot number did not turn out to be the lot number actually assigned by the City. Thus, the deed for 450 Sapphire Street needs to be corrected and recorded against the valid lot number, which is Block 4519, Lot 124, formerly Lot 30. Annexed hereto is a printout from the New York City Department of Finance of the current tax map for Block 4519. It is not sufficient that the summons and complaint are corrected, as plaintiff requests, as defendant's deed must be recorded on the correct lot number.

The mortgages for the two lots defendant bought on Block 4519 were recorded against the former Lot numbers, so there is no problem with the recording. However, an individual principal of the seller LLC took out two mortgages in his own name on a lot the seller LLC transferred to him individually, which were improperly recorded against Lot 30 as well, subsequent to the recording of the mortgage being foreclosed in the instant action. However, while they are recorded against Lot 30, they refer to 1425 Stanley Avenue, which would be Lot 128, which is in fact owned by this individual, the principal of the developer. Thus, the two mortgagees are necessary parties to this action, unless they can be persuaded to correct the recording of their mortgages so as to record them against the correct property, seemingly Lot 128. The mortgages were recorded after the mortgage which is the subject of the foreclosure, and before this action was commenced.

The mortgage which is the subject of this action was given by Paragon Mortgage Bankers Corp., by mortgage dated September 27, 2006, for the principal sum $612,000, on property described as Block 4519 Lot 30, and "450 Sapphire Street" (Exhibit E to the papers). For the other lot on Block 4519 purchased by defendant, the same lender gave the defendant a mortgage for $596,000, which is recorded against Lot 28 (now 123). Similarly, the same individual principal of the seller took out two mortgages against this lot on his own behalf, except, for this lot, he also recorded a deed to himself, subsequent to the deed to defendant and subsequent to the mortgage executed by defendant in plaintiff's favor, although that deed purports to convey Lot 129, which corresponds to 1423 Stanley Avenue, while defendant's property is 448 Sapphire Street.

Pursuing the paper trail, and wondering if this mess was sloppiness or intentional fraud which should be brought to the attention of the authorities, while trying to remember the court was merely asked to appoint a referee to compute, the court plowed on, to see whether there are more obstacles to foreclosure that need to be addressed. Curiosity got the better of the undersigned, however, and a quick Google search of the developer disclosed at least two federal fraud and racketeering lawsuits pending in the United States District Court for the Eastern District of New York [FN1]. In one case, the plaintiff is the FDIC. Perhaps all the lenders and purchasers should get together and pursue a suit to correct all of the recordings. Hopefully there is only one buyer for each house. In any event, the court has decided to send a copy of this decision to the Chief of Enforcement, New York State Department of Law, Real Estate Financing Bureau, so they can investigate and take action if warranted, or, if they wish, forward the matter [*3]to either the U.S. Attorney's Office or the Kings County District Attorney's Office. It is noted that these homes are part of a Planned Unit Development in Brooklyn, and the Sponsor, Loring Estates, LLC, has registered with the New York State Department of Law and has therefore agreed to be subject to their enforcement jurisdiction.

Subsequent to the closing on the two mortgages with Paragon for defendant's two lots on Block 4519, (Paragon also provided the mortgages for defendant's two properties on Block 4518, but they were subsequently assigned to a different assignee than plaintiff herein), the mortgages were assigned to Lehman Brothers Bank, FSB, by assignment dated July 30, 2008 and recorded August 18, 2008, and were subsequently assigned to MERS, and then were assigned to plaintiff Aurora by assignments dated November 5, 2008 and recorded April 1, 2009. Both assignments to plaintiff were recorded against Lot 124, for both 458 and 450 Sapphire Street, as Lot 125 does not exist, as described above.[FN2] However, the interim assignments from Paragon to Lehman Brothers and from Lehman Brothers to MERS are not recorded under any of the lot numbers mentioned herein, and are instead recorded against Block 4519, Lot 19, which was discovered only by searching by the document numbers for the interim assignments which are indicated on the assignments to plaintiff. Unfortunately, Lot 19 no longer exists either. The property on that lot number (19) was conveyed to the seller/developer in 2003, and that lot, which was 80 x 100 feet, was subsequently subdivided.

Plaintiff commenced this action in March of 2009 to foreclose on the mortgage. The Notice of Pendency was filed against Block 4519, Lot 30 Tentative Lot 125, neither of which now exist, as lot 30 was changed to 124, not 125. Plaintiff asks to amend all of the papers Nunc pro tunc to refer to Lot 124. However, that is not the only problem, and thus this action may not proceed. The Summons, Complaint and Notice of Pendency must be corrected, but more importantly, the plaintiff must correct the recording errors at the Office of the City Register referred to herein.

At the present time, to summarize, the deed is recorded against Lot 125, which does not exist, the mortgage is recorded against Lot 30, which is the former Lot number, the two interim assignments are recorded against Lot 19, and the assignment to plaintiff is recorded against Lot 124, which is the correct lot number. Additionally, there are mortgages recorded against Lot 30 which should be recorded against different Lots. It is also noted that the internet records of the NYC Buildings Department, as a result of filings by the developer, indicate that both 448 and 450 Sapphire Street are on Lot 124, formerly 23. This isn't right either. Additionally, there does not seem to be a Certificate of Occupancy for 450 Sapphire Street, which presumably would have been a prerequisite to the closing of the mortgage.

Because the deed is recorded on the wrong lot, the Notice of Pendency is recorded on the wrong lot, the interim assignments are recorded on the wrong lot, and there are two mortgages recorded on the lot which is the subject of the foreclosure whose mortgagees were not named in the action (although the mortgages seemingly should be recorded against a different lot), the problem is not just one of correcting the Summons, Complaint and Notice of Pendency. All the [*4]documents, that is, the deed and mortgage and the assignments, must be recorded against the Lot plaintiff seeks to foreclose on, or this case cannot go forward. Otherwise, a successful buyer at a foreclosure auction could not obtain clear title from the Referee.

This shall constitute the Decision and Order of the Court.

Dated: July 2, 2010

E N T E R :

Hon. Debra Silber

A.J.S.C. Footnotes

Footnote 1:FDIC v. Kontagiannis et al, 2009cv03936; DLJ Mortgage v. Kontagiannis et al, 2008cv04607.

Footnote 2:Further, while Lot 123 is also owned by defendant, (448 Sapphire Street) it has a deed and mortgage against it which belong on Lot 120. Defendant's deed and mortgage for 448 Sapphire Street were recorded against Lot 28, which was changed to 123.