RPAPL § 1304:

The Little Foreclosure Notice that Could

RPAPL § 1304: The Little Foreclosure Notice that Could

In response to equity theft scams that plagued New York homeowners in the 2000s, the State Legislature signed the Home Equity Theft Protection Act (HETPA) into law in July 2006.[1] HETPA included amendments and additions to New York’s Banking Law, Real Property Law, and Real Property Actions and Proceedings Law (RPAPL).[2] Arguably one of the most significant additions was the 90-day notice requirement enacted by RPAPL § 1304.

Effective as of September 2008, RPAPL § 1304 in its original form required foreclosing parties to give specific notice to borrowers of high-cost, subprime, or non-traditional home loans, as defined by the statute, at least ninety days before commencing a legal action.[3] The statutory purpose of RPAPL’s pre-foreclosure notice furthered “the express policy of the state to preserve and guard the precious asset of home equity” by providing homeowners with the information necessary to do so.[4] In fact, its manifest purpose was to help homeowners avoid litigation by remedying the lack of communication between lenders and distressed homeowners, which led to many needless foreclosures during the subprime mortgage crisis.[5]

While homeowners with subprime mortgages were the first to be affected after the housing bubble burst, homeowners with prime credit histories also experienced high foreclosure rates as housing prices decreased.[6] In response, the Legislature expanded RPAPL § 1304 to apply to any home loan, as defined by the statute.  RPAPL § 1304 in its current form became effective on January 14, 2010.[7] For legal actions commenced before January 14, 2010, RPAPL § 1304 only applies to high-cost, subprime, and non-traditional home loans, while those actions commenced on or after January 14, 2010 apply to any home loan.

RPAPL § 1304’s strict notice requirements remain the same and include content, timing, and service provisions.[8] In addition to the notice being sent at least ninety days before commencement of a legal action, RPAPL § 1304 requires notices contain specific language, including a warning about the impending foreclosure, as well as information concerning the homeowner’s right to cure the default and access counseling agencies.[9] A list of such agencies must also be provided and the entire notice must be typed in at least fourteen-point font.[10]

The content requirements are met with equally specific service requirements, as RPAPL § 1304 requires notices be sent “by registered or certified mail and also by first-class mail to the last known address of the borrower, and if different, to the residence that is the subject of the mortgage.”[11]

The Appellate Division, Second Department, which has jurisdiction over Kings County, Queens County, Nassau County and Suffolk County, has held that strict compliance of RPAPL § 1304 is necessary to maintaining a foreclosure action, finding the statute to be “a mandatory condition precedent.”[12] The Second Department also held that the foreclosing party has the prima facie burden of establishing compliance with § 1304, meaning the foreclosing party must prove it complied with the notice requirements in its complaint.[13] New York’s lower and appellate level courts have held lenders to absolute compliance by dismissing cases in which foreclosing parties did not perfectly adhere to the requirements of RPAPL § 1304.  Examples include the dismissal of cases in which the notice was not sent to all borrowers,[14] did not have the required list of agencies attached,[15] or was not sent via registered or certified mail and by first-class mail.[16]

RPAPL § 1304 is a powerful tool for New York homeowners in the midst of foreclosure.  Any instance of a lender not complying with the 90-day notice may be grounds for dismissal of the foreclosure action.  It is important to know, however, that dismissal is without prejudice,[17] meaning lenders can resend a notice that complies with the statute and commence a subsequent foreclosure action.  Although lenders do get another “bite at the apple,” dismissals give homeowners time to contact foreclosure counseling services, time to discuss repayment options with their lenders, and, ultimately, time to save their homes.

Recently, Rozario & Associates argued a cross-motion to dismiss the foreclosure action and the Court issued a decision, granting our cross-motion but scheduling a traverse hearing as to whether the plaintiff bank complied with RPAPL § 1304.  While we disagree with the Court’s decision to schedule a hearing, as we strongly believe based on existing case law the case should be summarily dismissed if plaintiff bank fails to prove strict adherence to RPAPL § 1304, it is expected that the Complaint will be dismissed.[18]


[1] N.Y. Real Property Law § 265-a (“Home Equity Theft Protection Act,” 2006). [2] Id.
a href=”#_ftn3″ name=”_ftnref3″>[3] N.Y. Real Property Actions and Proceedings Law § 1304 (2007). [4] “Home Equity Theft Protection Act,” supra[5] Senate Introducer Memorandum in Support, Bill Jacket, L. 2008, ch. 472, at 10. [6] See, Vikas Bajaj & Louise Story, Mortgage Crisis Spreads Past Subprime Loans, N.Y. Times, Feb. 12, 2008, at A1. [7] N.Y. Real Property Actions and Proceedings Law § 1304 (2009).[8] See, RPAPL § 1304(1). [9] Id. [10] Id. [11] Id. at § 1304(2). [12] SeeAurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 923 N.Y.S.2d 609 (2nd Dept. 2011). [13] Id. at 106. [14] Seeid. [15] SeeEastern Savings Bank, FSB v. Bowen, 38 Misc.3d 1208, 967 N.Y.S.2d 866 (N.Y. Sup. 2013). [16] SeeAurora Loan Servs., LLCsupra[17] See, e.g.Aurora Loan Servs., LLCsupra[18] Bank of New York Mellon v. Green, Index No. 25530/09 (Kings County).

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