The opinion of the court was delivered by: VINCENT L. BRODERICK
VINCENT L. BRODERICK, U.S.D.J.
This mortgage foreclosure suit presents issues relating to the routine naming of municipalities as defendants by federal mortgage agencies to preserve the right of the agencies to attempt to foreclose possible local government liens where owners default on federally granted, insured or acquired mortgages.
The action is brought by plaintiff Federal Home Loan Mortgage Corporation ("FHLMC") pursuant to 12 USC § 1452(e) against several defendants, including the Village of Highland Falls (the "Village"). The plaintiff's application for the appointment of a receiver for the subject property was granted by Judge Charles L. Brieant of this court by order dated January 27, 1993.
Plaintiff FHLMC now seeks a judgment of foreclosure and sale and moves for, among other things, summary judgment against the Village, the only defendant answering or responding to the complaint.
The Village opposes the motion for summary judgment and seeks to be dismissed from the case on the grounds that, among other things, no obligations to the Village for real property taxes, water and sewer charges are outstanding and that any future Village liens would have priority under New York state law.
I grant summary judgment against the Village of Highland Falls to the extent indicated in part III below, and dismiss the Village from this action in all other respects as set forth in that same part.
As further explained in part IV, I deny without prejudice FHLMC's application for a deficiency judgment. I shall be in a position to rule upon issues relating to liability for a deficiency only when the foreclosure and sale of the property has been concluded and the net assets of the sale ascertained.
I grant the application of FHLMC for attorney's fees.
On January 24, 1989 FHLMC became the assignee of a mortgage held by the Southern Federal Savings and Loan Association of Georgia and executed by Peregrine. As such, FHLMC became the holder of a first mortgage for a principal sum of $ 705,000
on the property that is the subject of this action. On that same date FHLMC also received as additional collateral from Peregrine assignment of all rents, issues, and profits due with respect to the mortgaged property.
Beginning on August 1, 1992, Peregrine failed to make the required monthly payments of principal and interest. FHLMC sent Peregrine a demand letter on October 5, 1992, and then notified Peregrine by letter dated October 16, 1992 that under the terms of the Note and Mortgage it was accelerating all debts due and, in the absence of payment in full, would begin this action for foreclosure. The verified complaint was filed on October 29, 1992.
The parties engaged in settlement negotiations which failed to achieve a resolution of this action; by motion dated February 26, 1993 FHLMC sought judgment of foreclosure and sale, default judgments against the non-responding named ...