HSBC Bank USA, N.A. v Rahman

[*1] HSBC Bank USA, N.A. v Rahman 2015 NY Slip Op 51321(U) Decided on September 8, 2015 Supreme Court, Queens County McDonald, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 September 8, 2015
Supreme Court, Queens County

HSBC Bank USA, National Association AS TRUSTEE FOR NOMURA ASSET ACCEPTANCE CORPORATION, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-AP1, Plaintiff,

against

Mohammad Mostafizur Rahman F/K/A MD M. RAHMAN, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AS NOMINEE FOR FREMONT INVESTMENT & LOAN, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY PARKING VIOLATIONS BUREAU, NEW YORK CITY TRANSIT ADJUDICATION BOARD, UNITED STATS OF AMERICA-DEPARTMENT OF THE TREASURY-INTERNAL REVENUE SERVICE, PORTFOLIO RECOVERY ASSOCIATES, LLC, CRIMINAL COURT OF THE CITY OF NEW YORK, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, MIDLAND FUNDING LLC, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE CIVIL ENFORCEMENT-CO-ATC, UNIFUND CCR PARTNERS, CAPITAL ONE BANK, MRC RECEIVABLES CORP., TARGET NATIONAL BANK, DISCOVER BANK, GREAT SENECA FINANCIAL CORPORATION, COLLINS FINANCIAL SERVICES, INC., CITIBANK (SOUTH DAKOTA), N.A., EMPIRE PORTFOLIO INC, CAPITAL ONE N.A., HILLSIDE PLACE LLC, NEW YORK FINANCIAL SERVICES LLC, NORTH FORK BANK, DELTA MANAGEMENT LLC, PLATINUM RECOVERY SERVICES INC., VELOCITY INVESTMENTS, LLC, PALISADES COLLECTION, L.L.C., WORLWIDE ASSET PURCHASING LLC, CCU, LLC, DEPARTMENT OF HOUSING PRESERVATION & DEVELOPMENT, RAB PERFORMANCE RECOVERIES, LLC, ASSET ACCEPTANCE LLC, CHASE BANK USA, N.A., STUYVESANT FUEL SERVICE CORP., RETAIL RECOVERY SERVICE OF NEW JERSEY, COLORADO CAPITAL INVESTMENTS INC., SNITOW KANFER, HOLTZER & MILLUS, LLP, CITIBANK, N.A., RUSHMORE RECOVERIES VIII LLC, MOUNT SINAI QUEENS, CITIMORTGAGE INC, VALLEY NATIONAL BANK, CAVALRY PORTFOLIO SERVICES LLC, HSBC BANK USA, NATIONAL ASSOCIATION, ADVANTAGE ASSET II, INC., BANCO POPULAR NORTH AMERICA, OLD REPUBLIC INSURANCE COMPANY, ATLANTIC CREDIT & FINANCE INC, COMMISSIONER OF LABOR STATE OF NEW YORK, DEPARTMENT OF LABOR, METROPOLITAN LEASING, LLC, PLATINUM FINANCIAL SERVICES CORP., QUEENS HOSPITAL CENTER/NYCHHC, MIDLAND CREDIT MANAGEMENT INC, TXCOLLECT INC, BASIC LEASING CORP, ECAST SETTLEMENT CORPORATION, NEW CENTURY FINANCIAL SERVICES INC, HERITAGE ASSET MANAGEMENT, INC., "JOHN DOE 1 to JOHN DOE 25", said names being fictitious, the persons or parties intended being the persons, parties, corporations or entities, if any, having or claiming an interest in or lien upon the mortgaged premises described in the complaint, Defendants.



19689/13
Robert J. McDonald, J.

The following papers numbered 1 to 10 read on this motion by plaintiff for an Order granting plaintiff summary judgment and striking the defendant Mohammad Mostafizur Rahman f/k/a MD M. Rahman's verified answer and dismissing the affirmative defenses; appointing a referee to compute the amount due to plaintiff; and amending the caption.

Papers

Numbered

Notice of Motion-Affidavits-Exhibits................1 - 5

Affirmation in Opposition-Affidavit-Exhibits........6 - 8

Reply Affirmation-Exhibits..........................9 - 10

Upon the foregoing papers, it is ordered that the motion is determined as follows:

This is an action to foreclose a mortgage encumbering property located at 108-20 85th Avenue, Richmond Hill, NY 11418. Defendant Mohammad Mostafizur Rahman f/k/a MD M. Rahman (defendant) executed a mortgage in favor of Mortgage Electronic Registration Systems, Inc. as nominee for First National Bank of Arizona on July 7, 2005 to secure a promissory note in the principal amount of $412,500.00. The parties entered into a Home Affordable Modification Program (HAMP) on July 1, 2011. Thereafter, the note and mortgage were assigned to plaintiff by an assignment of mortgage dated August 23, 2012 and recorded on September 4, 2012. Plaintiff asserts that defendant defaulted on the mortgage and note when he failed to make his monthly mortgage payments beginning April 1, 2013.

Pursuant to the terms of the mortgage, plaintiff alleges that a notice of default and 90 day pre-foreclosure notice were sent to defendant. Plaintiff subsequently accelerated defendant's mortgage and brought this foreclosure action by filing a lis pendens and summons and verified complaint on October 23, 2013. Plaintiff submits affidavits of service on all defendants, including occupant MD. ARAZZAQUE. Defendant borrower submitted a [*2]Verified Answer dated November 26, 2013. The remaining defendants failed to answer the summons and complaint and are in default.

Five settlement conferences were held pursuant to CPLR 3408. On January 6, 2015, plaintiff advised the court that defendant was denied for a loan modification and his subsequent appeal was denied as well. As such, the matter was released from the residential foreclosure settlement conference part, and plaintiff was directed to proceed with the action.

In support of the motion for summary judgment, plaintiff submits the affirmation of counsel; the affidavit of Susana Leal-Salgado, a Vice President Loan Documentation of Wells Fargo Bank, N.A. dba America's Servicing Company (Wells Fargo), the servicing agent to plaintiff; copies of the Note, Mortgage, Assignment of Mortgage, and HAMP; copies of the notice of default letter and the 90-day notice both dated May 20, 2013; a copy of the pleadings; and copies of the affidavits of service.

It is well established that the proponent of a summary judgment motion "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact," (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557 [1980]). In a residential mortgage foreclosure action, a plaintiff establishes its prima facie entitlement to judgment as a matter of law by producing the mortgage and the unpaid note, and evidence of the default (see Midfirst Bank v Agho, 121 AD3d 343 [2d Dept. 2014]). Furthermore, a plaintiff must make a prima facie showing of proper service of the RPAPL 1304 notice containing the statutorily mandated content as a condition precedent to the commencement of the foreclosure action (see Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 108 [2d Dept. 2011]). The failure to make such a prima facie showing requires the denial of the motion regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985]).

Here, plaintiff has established a prima facie case by producing the note, mortgage, assignment of mortgage, and the affidavit of Ms. Leal-Salgado attesting to defendant's default in payment and plaintiff's proper service of the RPAPL 1304 notice.

The burden shifts to the answering defendant to submit proof sufficient to raise a genuine question of fact rebutting the plaintiff's prima facie showing (see Grogg Assocs. v South Rd. Assocs., 74 AD3d 1021 [2d Dept. 2010]; Woods v Zik Realty Corp., 172 AD2d 606 [2d Dept. 1991]).

In opposition, defendant asserts that there are material questions of fact in that he did not receive the "Help for Homeowners in Foreclosure" or two copies of the 90-day notice, his loan modification application was wrongfully denied, there is no assignment of mortgage, and Ms. Leal-Salgado lacks knowledge sufficient to state the facts surrounding his loan.

Defendant first alleges that he did not receive the "Help for Homeowner's in Foreclosure". A process server's affidavit constitutes prima facie evidence of proper service of process (see Deutsche Bank Nat. Trust Co. v Pestano, 71 AD3d 1074 [2d Dept 2010]; Wells Fargo Bank, NA v Chaplin, 65 AD3d 588 [2d Dept 2009]). Bare, conclusory and unsubstantiated denials of receipt of process are insufficient to rebut the presumption of proper service (see U.S. Bak Natl. Assn. v Tate, 102 AD3d 859 [2d Dept. 2013]; Stevens v Charles, 102 AD3d 859 [2d Dept. 2013]; NYCTL 2009-A Trust v Tsafatinos, 101 AD3d 1092 [2d Dept. 2012]). Here, defendant submits an affidavit merely stating that he did not receive the "Help for Homeowners in Foreclosure". Plaintiff has submitted the process server's affidavit stating that the "SUMMONS AND COMPLAINT; 1303 NOTICE-Help for Homeowners in Foreclosure" were properly served on November 14, 2013 pursuant to CPLR 308(2). Accordingly, defendant's unsubstantiated denial of receipt of the "Help for Homeowner's in Foreclosure" is insufficient to rebut the presumption of proper service.

Defendant also alleges that he did not receive two copies of the 90-day notice pursuant to RPAPL 1304. However, in her affidavit, Ms. Leal-Salgado states that the 90-day pre-foreclosure notice was sent to defendant. A copy of the notice was attached to the moving papers, is dated May 20, 2013, and is addressed to defendant at the mortgaged premises. Ms. Leal-Salgado also acknowledges that her affidavit is based on her personal examination of plaintiff's business records which were made in the ordinary course of business. The presumption of receipt by the addressee "may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed" (Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2d Dept. 2001]). As Ms. Leal-Salgado has identified that she personally reviewed the business records and that the 1304 notice was sent to defendant, plaintiff presented sufficient proof that it complied with RPAPL 1304. Moreover, defendant's contest to Ms. Leal-Salgado's affidavit is meritless. Ms. Leal-Salgado states that she is authorized to make the affidavit upon personal knowledge and review of the business records maintained by Wells Fargo.

Regarding defendant's argument that plaintiff lacks standing [*3]based upon an invalid assignment of mortgage, a plaintiff establishes that it has standing where it demonstrates that it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note (see Bank of NY v Silverberg, 86 AD3d 274 [2d Dept. 2011]; Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95 [2d Dept. 2011]). An assignment of the mortgage without assignment of the underlying note or bond is a nullity (see Deutsche Bank Natl. Trust Co. v Barnett, 88 AD3d 636 [2d Dept. 2011]). Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation (U.S. Bank, N.A. v Collymore, 68 AD3d 752 [2d Dept. 2009]). Here, Ms. Leal-Salgado states that plaintiff "is in possession of the Promissory Note. The Promissory Note was indorsed in blank." She further states that plaintiff "was in possession of the Note on or before October 23, 2013, the date the action was commenced." Accordingly, plaintiff demonstrated its standing because an endorsement of a note in blank together with its delivery by the owner or its agent to a transferee is sufficient to transfer ownership of said note and of a mortgage given to secure it (see Kondaur Capital Corp. v McCary, 115 AD3d 649 [2d Dept. 2014]; Mortgage Electronic Registration Sys., Inc. v Coakley, 41 AD3d 674 [2d Dept. 2007]). In light of the finding that plaintiff had standing as the holder of the note, it is not necessary to determine if plaintiff also established that it had standing through an assignment.

Lastly, defendant argues that plaintiff wrongfully denied his application for a loan modification. The fact that defendant wishes to modify the mortgage is not a defense to the foreclosure action (see Wells Fargo Bank, N.A. v Meyers, 108 AD3d [2d Dept. 2013]). The court may not endeavor to force an agreement upon plaintiff (see Wells Fargo Bank, N.A. v Meyers, 108 AD3d 9 [2d Dept 2013]). Moreover, defendant does not dispute the existence of the note, mortgage and default.

As plaintiff has made a prima face case for summary judgment, the burden shifted to defendant to produce evidence in admissible form sufficient to raise a material issue of fact in opposition to the motion. Defendant failed to do so.

Accordingly, plaintiff's motion is granted.

Plaintiff is awarded summary judgment against defendant, defendant's answer shall be struck, and the affirmative defenses dismissed; a Referee shall be appointed to compute the amount due to plaintiff under the Note and Mortgage; and the caption shall be amended by substituting the name of MD. ARAZZAQUE in place and stead of "JOHN DOE 1" and by discontinuing the action against the [*4]remaining defendants sued herein as "JOHN DOE 2" to "JOHN DOE 25".

Settle Order.

Dated: September 8, 2015

Long Island City, NY

______________________________

ROBERT J. MCDONALD

J.S.C