Bank of America, N.A. v. B. was a mortgage foreclosure action initiated by Bank of America against J.B. and D.W. concerning a property located in Mount Vernon, New York. The bank sought summary judgment, an order of reference, and ultimately a judgment of foreclosure and sale. The Westchester County Supreme Court granted these motions, confirmed the referee’s report, and ordered the property's sale.
On appeal, the Appellate Division, Second Department, reversed the lower court’s judgment, focusing on two main issues: compliance with RPAPL 1304 and the evidentiary foundation of the referee’s report. RPAPL 1304 requires that borrowers receive a 90-day notice before foreclosure proceedings begin, including a list of at least five housing counseling agencies serving the county where the property is located. Although one agency was mistakenly listed under the wrong county, the correct phone number and zip code were provided. The court found this error harmless under CPLR 2001, which allows courts to disregard non-prejudicial mistakes.
Bank of America also had to establish standing to foreclose, which it did by showing it possessed the note at the time the action commenced. The note was endorsed to Bank of America via an allonge and was attached to the summons and complaint. J.B. and D.W. failed to raise any factual dispute regarding standing, and the court reaffirmed that the mortgage follows the debt, making challenges to the mortgage assignment irrelevant.
However, the AD2 found fault with the referee’s report used to calculate the amount owed. The report relied on an affidavit from T.C., a senior vice president at Carrington Mortgage Services, acting as attorney-in-fact for Bank of America. T.C. did not demonstrate personal familiarity with the record-keeping practices of either Carrington or Bank of America. His calculations were based on unidentified and unproduced business records, rendering the affidavit inadmissible hearsay under CPLR 4518(a). The court emphasized that a referee’s findings must be substantially supported by the record, and in this case, they were not.
As a result, the AD2 denied Bank of America’s motion to confirm the referee’s report and for a judgment of foreclosure and sale. The matter was remanded to the Supreme Court for a new computation of the amount due, followed by further proceedings and the entry of an amended judgment.
Here the bank had standing -- but not standing-ovation style evidence ....
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DECISION