United States District Court, E.D. New York
For Eastern Savings Bank, FSB, Plaintiff: Jerold C. Feuerstein, LEAD ATTORNEY, David R. Groman, Kristine L. Grinberg, Kriss & Feurstein, LLP, New York, NY.
For Ebony Thompson, Katrina Breedy, Defendants: Steven A Biolsi, LEAD ATTORNEY, Law Office of Steven A Biolsi, Forest Hills, NY.
DECISION AND ORDER
HON. WILLIAM F. KUNTZ, II, United States District Judge.
Eastern Savings Bank, FSB (" Plaintiff" ) brought this action to foreclose on a mortgage encumbering certain real property located at 1696 Rockaway Parkway, Brooklyn, New York 11236, on which a mortgage was executed on May 26, 2006 by Ebony Thompson and Katrina Breedy (" Defendants" ). On May 21, 2013, Defendants filed a motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, and Plaintiff filed
its own motion for summary judgment two day later, on May 23, 2013. See Dkts. 32 (" Defs.' Mot." ) & 37 (" Pl.'s Mot." ). Because Plaintiff has failed to establish that it has standing to bring the foreclosure action, Defendants' motion for summary judgment is granted, and, in tum, Plaintiff's motion is denied.
Plaintiff is a federally chartered savings bank with its primary office located in Maryland, and Defendants are residents of New York. See Dkt. 1 (" Compl." ) ¶ ¶ 2-3. On May 26, 2006, Defendants executed a Note in the amount of $500,000 in favor of non-party Home123 Corporation (" Home123" ). See Pl.'s Mot., Ex. A (" Note" ); Compl., ¶ 10; Dkt. 39 (" Pl.'s 56.1 St." ) ¶ 2. On the same day, Defendants executed and delivered to Home123 a Mortgage encumbering real property located at 1696 Rockaway Parkway, Brooklyn, N.Y. 11236, as security for the Note. See Pl's Mot., Ex. B (" Mortgage" ); Pl.'s 56.1 St., ¶ 3.
Home123 then assigned the Mortgage to non-party GMAC Mortgage, LLC (" GMAC" ) on May 31, 2006 (Assignment No. 1). GMAC allegedly took title to the loan strictly for the purpose of servicing the loan for non-party UBS Real Estate Securities, Inc. (" UBS" ). Pl.'s 56.1 St. ¶ 10. The Note and Mortgage were then assigned to UBS by Assignment of Mortgage (Assignment No. 2), which is dated November 6, 2007 and recorded in the Register's Office on February 20, 2008. See Pl.'s Mot., Ex. E (" Assignment of Mortgage #2" ); Compl. ¶ 13; Pl.'s 56.1 St. ¶ 13. UBS assigned the Note and Mortgage to Plaintiff by Assignment of Mortgage (Assignment No. 3) dated February 6, 2008, and it was recorded in the Register's Office on February 20, 2008. See Pl.'s Mot., Ex. F (" Assignment of Mortgage #3" ); Compl. ¶ 14; Pl.'s 56.1 St. ¶ 14. The Note and Mortgage were physically delivered to Plaintiff by UBS. Dkt. 37-2 (Aff. of Terry Brown, (" Brown Aff." )) ¶ 13; Dkt. 35-5 (Aff. of Matthew Bollo (" Bollo Aff." )) ¶ 5. However, because the original assignment from Home123 to GMAC was not properly recorded, there was a gap in chain of title. Accordingly, Assignment No. 1 was executed on April 29, 2011 and recorded by the Registrar's Office on August 11, 2011--nearly five years after the original assignment--in order to correct the gap. See Pl.'s Mot., Ex. D; Compl. ¶ 12; Pl.'s 56.1 St. ¶ 12.
The terms of the Note require Defendants to make regular monthly payments to Plaintiff on the first day of each month, commencing on July 1, 2006. See Brown Aff. ¶ 15; Note at 1 (" [Defendants] will pay principal and interest by making a payment every month .... On the first day of each month beginning on July 1, 2006." ). The Note explains that " [i]f [Defendants] do not pay the full amount of each monthly payment on the date it is due, [Defendants] will be in default." Note at 3. If such a default occurs, the Note requires Plaintiff to send Defendants written notice that if the overdue amount is not tendered by a given date, Plaintiff may immediately demand Defendants to pay the full amount of the loan, in addition to all accrued interest. Id.
Defendants defaulted on the loan by failing to make the monthly payment due on September 1, 2006 and all subsequent monthly payments thereafter. Brown Aff.
¶ 17. On September 19, 2011, Plaintiff sent Defendants a demand letter which informed them that if Plaintiff " fails to receive payment from [Defendants] in the [overdue amount], plus reimbursement of [Plaintiff's] attorney's fees and costs in the amount of $300.00, within thirty (30) days from receipt of this letter ... the entire unpaid balance under this Security Instrument and Note will be accelerated and become due and owing in full to [Plaintiff]." Pl's Mot., Ex. C (" Default Notice" ) at 1. Nonetheless, Defendants failed to pay any of the overdue amount as demanded by the letter. Brown Aff. ¶ 21; Pl.'s 56.1 St. ¶ 8.
As a result, on March 12, 2010, Plaintiff filed the instant foreclosure action. See Com pl.; Pl.'s 56.1 St. ¶ 8. According to Plaintiff, the total amount it is owed, including the unpaid principal balance due under the Note and all accrued unpaid interest, protective advances and late charges, totals $782,492.90. Pl.'s 56.1 St. ¶ 19. Plaintiff originally filed a foreclosure action in New York State Supreme Court to enforce the ...