The opinion of the court was delivered by: Michael A. Telesca United States District Judge
Plaintiff Federal Home Loan Mortgage Corporation ("Freddie Mac" and/or "plaintiff") commenced this action to foreclose its first mortgage lien encumbering certain real property located at 86 South Union Street, Rochester, New York (the "Property"). All of the named defendants have been served with the Summons and Complaint. Except for the John Doe defendants described in the caption of the Complaint, all of the defendants have voluntarily appeared in this action.
According to plaintiff, the "John Doe" defendants are, on information and belief, statutory tenants pursuant to the municipal or state rent laws. As such their rights of tenancy and possession cannot be terminated by this action. Plaintiff does not seek to terminate the rights of any such statutory tenants and thus requests that the John Doe defendants be dismissed from this case. Plaintiff claims that an amendment of the caption of the Complaint does not prejudice the parties to this action.
Defendants Ambassador Associates, L.P., Ambassador Housing Development Fund Company, Inc. (together referred to as the "Mortgagor"), Silver Holdings, LLC, Silver Ambassador, LLC and Silver Street Development Corporation II (collectively, the "Ambassador Defendants") appeared in this action by serving an Answer (the "Answer"). The Answer consists of admissions, denials and denials on information and belief as well as one affirmative defense alleging that the appointment of a receiver is preclusive to Freddie Mac's right to demand a foreclosure, and requesting dismissal of the Complaint.
Defendants Conifer Realty, Inc., Richard J. Crossed, Peter Obourn and John Fennessey (collectively, the "Conifer Realty Defendants") appeared in this case by service of Notices of Appearance and Waiver in Foreclosure, waiving service of papers and notices of all proceedings in this action except Judgment of Foreclosure and Sale and Notice of Dismissal of the action, among others.
Defendants Home Properties, L.P., and Home Properties, Inc. f/k/a Home Properties of New York, Inc. (collectively, the "Home Properties Defendants") appeared in this action by service of a Notice of Appearance waiving service of all papers and of notices of all proceedings except judgment of foreclosure and sale and other related documents.
Defendant The State of New York (the "State") appeared in this action by service of a Notice of Appearance waiving notice of all papers and notices of all proceedings in this action except notice of dismissal and executed judgment of foreclosure and sale. Finally, defendant City of Rochester (the "City") appeared in this action by service of a Notice of Appearance and Waiver in Foreclosure waiving service of all papers and notices of all proceedings in this action except notice of application for dismissal, notice of sale and other related materials.
Plaintiff moves for summary judgment pursuant to Fed. R. Civ. P. 56 requesting that this Court grant plaintiff's request regarding foreclosure of the mortgaged Property. Plaintiff argues that its mortgage lien is superior to the liens and/or interests of all other defendants. In addition, plaintiff requests that pursuant to Fed. R. Civ. P. 55, this Court grant default judgment against the Conifer Realty Defendants, Home Properties Defendants, the State and the City for failure to answer or move with respect to the Complaint. Finally, plaintiff requests that this Court dismiss the action against the John Doe defendants. No opposition has been filed to plaintiff's summary judgment motion by any of the defendants and thus for purposes of this motion I will assume that the facts are not in dispute. For the reasons set forth below, plaintiff's motion is granted.
I. Facts Surrounding The Execution Of The Promissory Note And The Mortgage, Assignment of Leases and Rents and Security Agreement
On or about January 27, 1995, the Mortgagor executed and delivered to Community Lending Corporation ("CLC") a Promissory Note (the "Note") whereby the Mortgagor promised to pay to the order of CLC the original principal amount of Seven Hundred Seventy Five Thousand and 00/100 Dollars ($775,000) with interest thereon in installments of principal and interest. In order to secure the payment of the principal sum and interest set forth in the Note, the Mortgagor executed and delivered to CLC a Mortgage; Assignment of Leases and Rents and Security Agreement dated January 27, 1995 (the "Mortgage"), granting CLC a first mortgage lien on the Property, whereby the Mortgagor mortgaged the Property to CLC in fee. The Mortgage was duly recorded in the Office of the Clerk of Monroe County on January 30, 1995. For value received, CLC endorsed the Note to plaintiff by Allonge attached to said Note dated December 11, 2001 and assigned the Mortgage to plaintiff by Assignment of Security Instrument dated December 11, 2001 (the "Assignment"). Plaintiff has been the owner and holder of the first mortgage lien established by the Mortgage since that date.
II. Mortgagor's Default On It's Obligations Under the Mortgage
The Mortgagor defaulted on its obligations due under the Mortgage beginning with failing to make a payment due on September 1, 2005 and on the first day of each and every month thereafter. As a result of the Mortgagor's default, plaintiff gave the Mortgagor written notice of the default pursuant to the Note and Mortgage by letter dated September 14, 2005, giving the Mortgagor an opportunity to cure its default on or before September 23, 2005. The Mortgagor failed to cure the default. Consequently, plaintiff elected to accelerate the amounts due and owing under the Note and Mortgage. By letter dated September 29, 2005, plaintiff notified the Mortgagor that the whole of the debt secured by the Mortgage was immediately due and payable. To date, the Mortgagor has not paid the full, accelerated amount due to plaintiff. The Mortgagor's failure to make payments constitutes a default under the Mortgage.
Because of the Mortgagor's failure to pay sums due under the Note and Mortgage, plaintiff commenced this foreclosure action on October 18, 2005. In addition, plaintiff filed a notice of pendency in the Office of the Clerk of Monroe County on November 30, 2005. As of December 31, 2005, the total amount due to plaintiff was $719,078.91 together with interest on the outstanding principal balance at the variable default interest rate of six percent per annum above the then current adjusted Note rate, currently the rate of 12.07% per annum, or $227.92 per day past December 31, 2005, plus taxes, assessments, water and sewer charges, insurance premiums and other charges affecting the Property, which plaintiff may be required to pay to protect its interest in the Property after December 31, 2005, which are to be added to the principal balance and accrued interest, and attorney's fees incurred. Since plaintiff's counsel has incurred legal fees to enforce its rights under the Mortgage there will be additional attorney's fees associated with this action until the Property is sold.
III. Pertinent Terms of The Mortgage, Assignment of Leases and Rents and Security Agreement
Pursuant to the Mortgage plaintiff has the express right to foreclose and sell the Property. In addition, Paragraph 17 of the Mortgage provides not only for foreclosure in the event of a breach but also the appointment of a receiver without notice and payment of costs of ...