DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR REGISTERED HOLDERS OF MORGAN STANLEY ABS CAPITAL INC TRUST 2007 NC3 MORTGAGE PASS THROUGH CERTIFICATES SERIES 2007 NC3 v. DIMATTEI HSBC NA 12 (2022)

Upon the papers submitted(notice of motion with supporting papers including a statement of material facts, opposition with supporting papers and response to the statement of material facts and reply), it is

ORDERED that the plaintiff's motion for summary judgment and an order of reference is granted, and it is further

ORDERED that the plaintiff is directed to settle an order of reference.

Defendants, Geraldine DiMattei a/k/a Geraldine R. DiMattei and Frank Yannello a/k/a Frank J. Yannello received a loan in the amount of $299,000.00 from New Century Mortgage Corporation and executed a note, dated December 22, 2006. The loan was secured by a mortgage on the real property known as 4 Berry Lane, Miller Place, New York. The note was transferred to the plaintiff in 2007 and the mortgage was assigned to the plaintiff in 2010. The defendants executed a Loan Modification Agreement, effective May 11, 2010, which modified the principal balance to $336,287.49. The defendants failed to make the monthly payments starting on August 1, 2012. The plaintiff commenced an action in February 13, 2013. On February 12, 2019, the plaintiff's servicer executed a notice of revocation of the acceleration of the loan. On May 13, 2019, the Court granted the plaintiff's motion to discontinue the prior action.

Thereafter, as the default was not cured, the plaintiff commenced this action on January 17, 2020. The defendants timely answered with affirmative defenses and a counterclaim, which the plaintiff served a reply thereto. Presently, the plaintiff has moved for summary judgment and an order of reference. In opposition the defendants claim that the notice of default was not sent in separate envelopes. Moreover, the notice required pursuant RPAPL § 1304 has additional language in violation of the strict requirements of the statute.

The Second Department has clearly stated that where the two defendants are borrowers, notices required under RPAPL § 1304 must be in separate envelops ( Wells Fargo Bank, N.A. v. Yapkowitz, 199 AD3d 126 [2nd Dept. 2021]). Such a requirement derives from the statutory language and the intent of the Home Equity Theft Prevention Act (id.). However, the 30 day default notice is required pursuant to the modified loan agreement and only provides that the default notice must be mailed or delivered (par. 8 NYSCEF doc. no. 58). Furthermore, the agreement provides that notice to one borrower is sufficient to all borrowers., unless applicable law requires otherwise (id.). Contrary to the defendants’ position Yapkowitz cannot be read for the requirement of separate envelops for the 30 day default notice, as that is contractual, not statutory for notice pursuant to RPAPL 1304. Moreover, the conclusory claim by defendant, Geraldine DiMattei a/k/a Geraldine R. DiMattei, that she did not receive the 30 day notice is insufficient to rebut the proof of mailing ( see United Nations Federal Credit Union v. Diarra, 194 AD3d 506 [1st Dept. 2021]).

The defendants also argue that notice pursuant to § 1304 had additional language, specifically “Attached to this notice is a list of government approved housing counseling agencies in your area ․” (emphasis added) and then a list of nine pages of counseling agencies which includes many not in the defendants area. The Second Department has recently held that “inclusion of any material in the separate envelope sent to the borrower under RPAPL 1304 that is not expressly delineated in these provisions constitutes a violation of the separate envelope requirement of RPAPL 1304(2)” (Bank of America, N.A. v. Kessler, 202 AD3d 10, 14 [2d Dept 2021], lv. granted ––– AD3d –––– [May 23, 2022]; see Wells Fargo Bank, N.A. v DeFeo, 200 AD3d 1105 [2d Dept, 2021]; Citimortgage, Inc. v Dente, 200 AD3d 1025 [2d Dept 2021])). This “strict approach” provides clear guidelines that any “additional material” violates the requirements of RPAPL § 1304. However, the list of counseling agencies is expressly delineated by RPAPL 1304(1). Moreover, the statute provides that a statewide listing by county is available on the state website (id.). Providing this list is assistance to the borrower. Moreover, as the Second Department has noted, the address of the agency does not mean that the agency does not provide service in the borrower's area ( US Bank N.A. v. Haliotis, 185 AD3d 756 [2nd Dept. 2020]). Furthermore, the statute requires that the notice contains a current list of at least five housing counseling agencies servicing the county where the property is located (RPAPL 1304(2)). This does not prohibit counseling agencies outside the area. Kessler understanding of “additional material” are items not required by the statute (see e.g. Wells Fargo v Bedell, 205 AD3d 1064 [2nd Dept, 2022]( notice pertaining to the rights of a debtor in military service and a debtor in bankruptcy is additional material). Here the counseling agencies are required by statute.

It must be noted that adopting the defendants’ position would be inconsistent with Kessler bright-line jurisprudence, which reflects the Court of Appeal's jurisprudence in foreclosure action (Freedom Mtge. Corp. v. Engel, 37 NY3d 1[2021]. Under defendants’ argument, a court would have to determine the area served by every agencies on the list. Having an agencies listed that does not come within the area of the mortgagor would be deemed “additional material.” This would not be a bright-line approach to review of the notice required under the statute. Consequently, the motion is granted.

Robert F. Quinlan, J.