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Present: HON. DONALD SCOTT KURTZ

At Part 26 of the Supreme Court of the State of New York, Kings County on the 25th day of

Ma rch, 2013


Justice, Supreme Court Index No.: 9220/09


DECISION/ORDER

U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR SCMC MORTGAGE-BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-7,
Plaintiff,
- against-

JACQUELINE GREEN, CREDIGY RECEIVABLES INC., MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC, AS NOMINEE FOR FIRST UNITED MORTGAGE BANKING CORP., NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY PARKING VIOLATIONS BUREAU, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, NEW YORK COMMUNITY BANK, PEOPLE OF THE STATE


OF NEW YORK, JOHN DOE (said name being fictitious, it being the intention of Plaintiff to designate any and all parties, corporations, or entities, if any, having or claiming an interest or lien upon the mortgaged premises.),
Defendants.


Recitation, as required by CPLR §2219(a), of the papers considered in the review of these motions:



Papers

Notice of Motion/Cross Motion/Attorneys' affirmations supplementing the motions ............................................ ..

Answering Affidavits/Affirmations ............................... .. Reply Affidavits/ Affirmations/Memoranda of Law.......

Referee's Report............................................................... .

Nu mbered

1,2



5-7

8



Upon the foregoing cited papers, this motion to confirm the referee's report dated March 19, 2012 and the cross-motion to reject the referee's report is decided as follows:
Plaintiff commenced this foreclosure action by the filing of a summons and verified complaint on April 15, 2009. Defendant, Jacqueline Green (hereinafter "defendant"), filed an untimely pro se answer on May 14, 2009. Pursuant to CPLR §3408, the case was transferred to the Foreclosure Settlement Conference Part (hereinafter "FSCP"). The first conference before the Referee was held on August 6, 2009 and defendant attended the conference without legal representation. She was encouraged to seek legal assistance and the conference was adjourned to October 29, 2009. On that date, defendant appeared with counsel. An initial settlement conference was conducted and plaintiff provided defendant with a Home Affordable Modification Plan (hereinafter "HAMP") modification application to be completed and submitted. The matter was then adjourned to February 1, 2010. By letter dated January 29, 2010, plaintiff sent defendant a form letter stating that she may qualify for a HAMP modification.
The Referee reports that when the parties appeared on February 1, 2010, they agreed that a complete HAMP application was submitted. Plaintiff now contends that the application was not complete. Nevertheless, both parties agree that defendant was, in fact, offered a HAMP trial plan which required her to make three successive monthly trial payments from February through April



\

2010. The matter was then adjourned to May 11, 2010. On May 111

the parties reported that


defendant made all three payments timely, yet plaintiff maintained that it needed updated documents before it could finalize the HAMP modification. The matter was fmiher adjourned to June 28, 2010. By letter dated June 17, 2010, plaintiff had informed defendant that she did not qualify for a HAMP modification since she did not submit the requested documents. When the parties returned to the FSCP on June 28, 2010, plaintiff s attorney notified defendant that since the required documents were not received by June 17, which the Referee stated was an arbitrary date imposed by plaintiff without advising defendant, defendant's modification was denied. The Referee directed plaintiff to reinstate the finalized HAMP modification and the matter was adjourned to August 19, 2010.
After ten months of continued conferencing, plaintiff s counsel, for the first time, reported that an alleged investor's restriction in a pooling and servicing agreement prohibited it from modifying defendant's loan altogether. Thereafter, the Referee issued several directives directing various people with personal lmowledge of the pooling agreement to appear. She also directed the parties to appear with documentation supporting the investor's restriction. After several more months and many adjournments, there was no progress. The Referee then issued the Report and Recommendation dated March 19, 2012.
The report found that plaintiff had failed to negotiate in good faith and that the servicer' s "dilatory tactics frustrated the purpose of CPLR 3408(a)." The report recommended, inter alia, requiring plaintiff to finalize defendant's 2010 HAMP trial modification; tolling all interest accrued on the subject loan since the commencement of the mandatory conferencing in September 2009; and barring the accrual of interest thereon until the paiiies enter into a final loan modification.


CPLR §3408 requires a mandatory settlement conference in every "residential foreclosure action" involving a home loan as defined in RPAPL §1304 "in which the defendant is a resident of the property subject to foreclosure." CPLR §3408(a). The statute further provides that both the plaintiff and the defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible." CPLR §3408(±). Good faith is an "intangible and abstract quality with no technical meaning or statutory definition." Adler v. 720 Park Ave. Corp., 87 AD2d 514, 515 (1st Dept 1982). Compliance with the good faith requirement of CPLR §3408 "must be based on the totality of the circumstances." Wells Fargo Bank, N A. v. Van Dyke, 101 AD3d 638, 638 (1st Dept 2012).
In support of her motion to confirm the Referee's report, defendant argues that she was unaware that plaintiff required additional paperwork during the trial modification period. She submits an affidavit from her attorney stating that her office checked with the servicer on February 9, 2010 and then again on April 19, 2010 and was informed that they had all the paperwork necessary to process defendant's permanent modification. Nevertheless, plaintiff verbally requested updated documents at the May 11th conference. By letter dated June 17, 2010, plaintiff informed defendant that it was

unable to offer her a HAMP modification because she did not provide the documents requested. The letter referred to a notice purportedly sent more than 30 days earlier which allegedly listed the specific documents needed. However, defendant denied having received said notice.
In opposition to the motion to confirm and in support of its cross-motion to reject the Referee's report, plaintiff fails to attach the purported notice which allegedly detailed the specific documents needed to finalize defendant's trial modification. Moreover, plaintiff does not deny that defendant's attorney called the servicer twice to make sure she had all the documents needed to modify defendant's loan. Instead, plaintiff maintains that it could never have modified defendant's loan due to an investor restriction.
At the May 11, 2010 conference, plaintiff verbally demanded documents from defendant in violation of the Depaiiment of Treasury Supplemental Directive 09-08 (November 3, 2009, effective January 1, 2010) which governs the servicer's obligation to provide borrowers with various notices. Specifically, the directive states that "the servicer must mail the b01Tower a notice listing all documents needed to complete the evaluation and a date by which the information must be received before the borrower becomes ineligible for HAMP." Department of Treasury Supplemental Directive 09-08, supra. Moreover, plaintiff set an arbitrary date by which defendant had to submit such documents but failed to inform the defendant or the Referee of such date. Plaintiff merely argues that over a month had passed and defendant did not submit the documents which had been verbally requested and, therefore, her application was denied. The Referee adjourned the conference for the purpose of allowing the defendant enough time to comply with plaintiff s verbal request for documents, yet plaintiff denied the application eleven days prior to the adjourn date.
The Court finds that the Referee's report supports a finding that plaintiff failed to negotiate in good faith to reach a mutually agreeable resolution pursuant to CPLR 3408(±). Consequently, the Referee's report is confirmed to the extent that all interest accrued on the subject note and mortgage is
tolled from the commencement of the mandatory conferencing in September 2009 until service of a copy of this Order with notice of entry. The Court declines to invoke its equity powers requiring plaintiff to finalize defendant's 2010 HAMP modification. See JP Morgan Chase Bank Nat. Ass )n v. Ilardo) 36 Misc3d 359, 378 (Sup Ct, Suffolk County 2012). See Norwest Bank Minnesota) NA v.

E.M V. Realty Corp., 94 AD3d 835 (2d Dept 2012); HSBC Bank USA) Nat. Ass'n v. McKenna, 37 Misc3d 885 (Sup Ct, Kings County 2012). The cross-motion to reject the Referee's report is denied. The parties are directed to appear for a conference on May 7, 2013.
The foregoing shall constitute the Decision and Order of the Court.

Justice, Supreme Court

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