A New York Supreme Court held that the notice of default requirement in New York Real Property Actions and Proceedings Law (RPAPL) § 1304 applies only to a borrower and not a borrower’s estate.

As a result, according to the Court, foreclosing entities do not have to provide a notice of default pursuant to the RPAPL to a borrower’s estate after the death of the borrower.

A copy of the opinion in US Bank NA v. Levine may be found here: Link to Opinion.

A mortgagee commenced a residential mortgage foreclosure action after a deceased borrower’s estate failed to make payments. The mortgagee moved for summary judgment, and the borrower’s estate opposed the motion.

The major issue of contention was whether the notice of default provision of the RPAPL § 1304 applies when the borrower is deceased.

As you may recall, RPAPL § 1304 among other things mandates that the mortgagee must provide the borrower notice that the loan is in default and that the home is at risk, at least 90 days before beginning an action against a borrower to foreclose on the mortgage. Proper service of the notice is a condition precedent to the commencement of the foreclosure action.

The New York Supreme Court, a trial court in Westchester County, considered various arguments from the borrower’s estate but ultimately granted summary judgment and an order of reference in favor of the mortgagee.

The trial court noted that there was no New York Appellate Division case on point, but that several trial courts had addressed the issue. Following other lower courts in the State of New York, the trial court found persuasive the method of service required by section 1304.

Under RPAPL § 1304[2], the notice is to be sent to the borrower by registered or certified mail and by first class mail to the last known address of the borrower. The trial court found the statute’s language was specific to a borrower even if there were other non-borrowing parties with some interest in the property.

The trial court also noted that while section 1304 does not define the term “borrower,” logic dictates that a “borrower” is someone who, at a minimum, “either received something and/or is responsible to return it.”

Accordingly, the Court held that the statute requires only that the borrower be given notice, and when the borrower is deceased, the provisions of RPAPL § 1304 are not applicable.

The trial court also rejected the estate’s argument that there was an issue of fact precluding summary judgment. Furthermore, the trial court did not find persuasive the estate’s laches argument because the borrower had not made a mortgage payment since 2008.

Last, the trial court held that a previous dismissal of a prior action commenced against the borrower was not dismissed on the merits and was consequently not res judicata precluding the present action.

Thus, the trial court granted the mortgagee’s motion for summary judgment.