U.S. Bank National Association, respondent, v. Mahmood Ali, et al., defendants, Asim Shahzad, appellant. (2026)

Argued—March 30, 2026

DECISION & ORDER

G/

In an action to foreclose a mortgage, the defendant Asim Shahzad appeals from an order and judgment of foreclosure and sale (one paper) of the Supreme Court, Nassau County (Elizabeth Fox–McDonough, J.), entered September 20, 2024.  The order and judgment of foreclosure and sale, upon an order of the same court (David P. Sullivan, J.) dated May 17, 2023, inter alia, granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Asim Shahzad, to strike that defendant's answer, and for an order of reference, upon an order of the same court (David P. Sullivan, J.) also dated May 17, 2023, among other things, granting the same relief to the plaintiff, striking that defendant's answer, and appointing a referee to compute the amount due on the note, and upon an order of the same court (Elizabeth Fox–McDonough, J.) dated August 20, 2024, granting the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, granted the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, confirmed the referee's report, and directed the sale of the subject property.

ORDERED that the order and judgment of foreclosure and sale is reversed, on the law, with costs, those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Asim Shahzad, to strike that defendant's answer, and for an order of reference and the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale are denied, and the two orders dated May 17, 2023, and the order dated August 20, 2024, are modified accordingly.

In 2009, the defendant Asim Shahzad (hereinafter the defendant), among others, executed a note in favor of Ameritrust Mortgage Bankers, Inc. (hereinafter Ameritrust).  The note was secured by a mortgage on certain real property located in Nassau County.  The mortgage agreement stated, inter alia, that it “does not authorize acceleration or foreclosure if not permitted by regulations of the Secretary [of Housing and Urban Development].”  In December 2019, the plaintiff, Ameritrust's successor in interest, commenced the instant action to foreclose the mortgage against the defendant, among others.  The defendant interposed an answer, alleging that the plaintiff failed to conduct a meeting with the defendant as required by the regulations of the Secretary of Housing and Urban Development (hereinafter HUD).

In September 2022, the plaintiff moved, among other things, for summary judgment on the complaint insofar as asserted against the defendant, to strike the defendant's answer, and for an order of reference.  In opposition, the defendant argued that the plaintiff was not entitled to accelerate the debt because it failed to comply with, inter alia, 24 CFR 203.604, a HUD regulation requiring a meeting prior to acceleration.  In an order dated May 17, 2023, the Supreme Court, among other things, granted those branches of the plaintiff's motion.  In another order also dated May 17, 2023, the court, inter alia, granted the same relief to the plaintiff, struck the defendant's answer, and appointed a referee to compute the amount due on the note.  The plaintiff moved to confirm the referee's report and for a judgment of foreclosure and sale, and the court granted that motion in an order dated August 20, 2024.  In an order and judgment of foreclosure and sale entered September 20, 2024, the court granted the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, confirmed the referee's report, and directed the sale of the subject property.  The defendant appeals.

The Supreme Court should not have granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant, to strike that defendant's answer, and for an order of reference.  Contrary to the plaintiff's contention, the affirmative defense alleging a failure to comply with 24 CFR 203.604 was pleaded with the particularity required by CPLR 3015(a).  Here, the plaintiff failed to establish that it complied with that regulation or that it was exempt from complying with it (see Bank of Am., N.A. v. Spencer, 166 AD3d 1514, 1515;  Green Planet Servicing, LLC v. Martin, 141 AD3d 892, 893).  Accordingly, the court should have denied those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant, to strike the defendant's answer, and for an order of reference.

The parties' remaining contentions need not be reached in light of our determination.

IANNACCI, J.P., BRATHWAITE NELSON, LANDICINO and GOLDBERG VELAZQUEZ, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court