Steven J. Baum, P.C. Stephen J. Paluch, Esq., Of Counsel Attorneys for Plaintiff.
Cesar Polanco and Mayra Reyes Defendants, Pro Se.
Lawrence H. Ecker, J.
This mortgage foreclosure action raises a novel and important issue regarding the legality of substituting nunc pro tunc a newly signed affidavit of merit and amount due in place of the original affidavit after the latter was used by the mortgagee to obtain an order of reference and judgment of foreclosure and sale.
Plaintiff Litton Loan Servicing, LP ("Plaintiff") moves for an order pursuant to CPLR §5019(a) and CPLR §2001 requesting the court substitute an affidavit of merit and amount due, nunc pro tunc, in place of the affidavit attached to the initial motion papers and validating the order of reference, as well as the judgment of foreclosure and sale, both previously granted by the court, and permitting plaintiff to proceed to foreclosure sale.
On November 4, 2009, plaintiff commenced this foreclosure action by filing a summons and complaint with the Orange County Clerk (Motion, Exhibit A). After defendant Cesar A. Polanco ("Polanco") failed to appear, plaintiff moved for an order of reference to appoint a referee to compute the amount due on the note. In support of the application, plaintiff submitted an affidavit of merit and amount due, dated November 24, 2009. The affidavit was executed by plaintiff's Foreclosure Manager, Christopher Spradling, and purports to establish the amount Mr. Polanco owed under the note (Motion, Exhibit C). On July 13, 2010, this court (Lubell, J.) granted plaintiff's application for an order of reference. (Motion, Exhibit B). The order of reference amended the caption to add Mayra Reyes as a co-defendant and appointed Ryan S. Karben, Esq. as Referee. Mr. Karben subsequently submitted a referee's report on August 19, 2010 which indicated as of that date, Polanco owed $234, 291.38 under the note. Thereafter, plaintiff moved for an order confirming the referee's report and for a judgment of foreclosure and sale. The moving papers included the same affidavit of Christopher Spradling. On September 13, 2010, this court (Lubell, J.) granted plaintiff's application.
On October 20, 2010, then Chief Administrative Judge Ann T. Pfau instituted Administrative Order 548/2010, applicable to residential foreclosure actions. Pursuant to the order, plaintiff's counsel is required to submit an affirmation attesting to the accuracy of the documents and notarizations submitted to the court. The Office of Court Administration, in its press release announcing the new affirmation filing requirement, stated it was instituted "to protect the integrity of the foreclosure process and prevent wrongful foreclosures...The new filing requirement was introduced by the Chief Judge in response to recent disclosures by major mortgage lenders of significant insufficiencies — including widespread deficiencies in notarization and "robosigning" of supporting documents — in residential foreclosure filings in courts nationwide..." 
Addressing the purpose of the affirmation requirement, Chief Judge Lippman noted:
"We cannot allow the courts in New York State to stand by idly and be party to what we know is a deeply flawed process, especially when that process involves basic human needs — such as a family home — during this period of economic crisis. This new filing requirement will play a vital role in ensuring that the documents judges rely on will be thoroughly examined, accurate, and error-free before any judge is asked to take the drastic step of foreclosure." 
On March 2, 2011, Administrative Order 431/2011 replaced Administrative Order 548/2010 nunc pro tunc to November 18, 2010.  It enlarged the scope of counsel's investigative duties under Administrative Order 548/2010. Pursuant to Administrative Order 431/2011, the affirmation must be submitted at one of three stages: (I) for cases not filed as of October 20, 2010, the affirmation is to be filed with the request for judicial intervention; (ii) for cases where a judgment of foreclosure and sale has not been entered, the affirmation must be submitted at the time of filing for an order of reference or judgment of foreclosure and sale; and (iii) for cases where a judgment of foreclosure and sale has been entered, but the property has not been sold, the affirmation is to be submitted at least five business days before the foreclosure auction. In the instant case, as plaintiff obtained a judgment of foreclosure and sale prior to the issuance of Administrative Order 548/2010 and 431/2011, plaintiff's counsel was obligated to submit the affirmation at least five business days before the foreclosure sale.
While preparing for the foreclosure sale, plaintiff attempted to comply with Administrative Order 431/2011 but was unable to do so. Plaintiff's counsel explains "[t]his firm was notified by its client that they cannot confirm the accuracy with regard to the execution and/or notarization of the Affidavits of Merit and Amount Due....and, therefore, the certification cannot be provided." (Motion, Paluch Aff., ¶7). The attorney affirmation goes on to state, "....while the Plaintiff cannot confirm the proper execution and/or notarization of said Affidavit, they have verified that the amounts set forth and that the claims set forth are true and accurate. In fact, the information contained in the Affidavit of Merit and Amount Due mirrors that which is set forth in the Complaint." (Motion, Paluch Aff., ¶8). Plaintiff seeks to remedy this by submitting a new affidavit of merit and amount due in place of the original affidavit nunc pro tunc. Plaintiff claims this application should be granted as it would not prejudice a substantial right of any party as there is "no new material fact set forth in the Affidavit" and "there is no dispute that the information set forth...is correct." (Motion, Paluch Aff., ¶12-13).
The court notes the new affidavit eliminates the paragraph contained in the original affidavit which states that "deponent has reviewed the original note, mortgage, and if applicable, assignments of mortgage, kept in the regular course of business by thus institution. Deponent finds the same to be in proper form, duly executed and notarized where applicable, and mortgage tax paid there." (Motion, Spradling Aff. ¶5).Of further note, the July 14, 2011 proposed affidavit of merit and amount due was not executed by an officer of plaintiff, but rather by William Ashley, Vice-President of Green Tree Servicing (Motion, Exhibit E). Mr. Ashley states the note executed by Polanco has since been transferred to Green Tree Servicing by assignment dated January 26, ...