Opinion
62076/2018
06-28-2019
NATIONSTAR MORTGAGE LLC d/b/a Champion Mortgage Company, Plaintiff, v. Mary HOAR; et al., Defendants.
Attorneys for Plaintiff: Pincus Law Group, PLLC (Renee J. Aragona, Esq.) Attorneys for defendant: Zerilli & Associates, P.C. (Joseph M. Becker, Esq.)
Attorneys for Plaintiff: Pincus Law Group, PLLC (Renee J. Aragona, Esq.)
Attorneys for defendant: Zerilli & Associates, P.C. (Joseph M. Becker, Esq.)
William J. Giacomo, J. Factual and Procedural Background
The borrower, Ira Goldman, now deceased, obtained a reverse mortgage from Generation Mortgage Company against the property located at 29 Marshall Road, Yonkers, New York, on June 3, 2010, up to a maximum principal balance of $660,000. The mortgage was thereafter assigned to plaintiff. The note and mortgage both provide that the lender may require immediate payment in full if "a [b]orrower dies and the property is not the principal residence of at least one surviving [b]orrower". Goldman died on November 7, 2015.
Plaintiff commenced this foreclosure action with the filing of a summons and complaint on August 8, 2018. The defendant Mary Hoar joined issue with the service of her answer. The remaining defendants have not appeared or answered.
Plaintiff now moves for summary judgment against the defendant Mary Hoar, a default judgment against the non-appearing parties, and an order of reference.
In opposition, Mary Hoar (hereinafter defendant) attests that in 1984 she became the sole owner of the premises. She and Goldman, her life partner, were never legally married. In 2010, they decided to obtain a reverse mortgage on the premises. Defendant states that at that time she was only 61 years old and therefore not eligible for a reverse mortgage. Goldman, however, was of sufficient age.
In conjunction with applying for the reverse mortgage, defendant and Goldman executed a quitclaim deed dated June 3, 2010, transferring title to the property to "Ira Goldman, a Life Estate with Full Powers Remainder unto Mary Hoar". On that same day, the note and mortgage were executed. Goldman signed the note as the sole borrower. The mortgage was made between mortgagor "Ira Goldman, A Life Estate With Full Powers Remainder Unto Mary Hoar" and the bank. The mortgage was signed by Ira Goldman as borrower and Mary Hoar, as remainderman.
Defendant attests that she was assured that when Goldman passed away she would be able to remain in the home. At the time of Goldman's death, defendant was still living in the home and has continued to reside in the home as her primary residence.
Defendant argues that she is a borrower and therefore this foreclosure action is improper. Defendant further argues that she has a life estate in the property that is not subject to the mortgage.
Discussion
In order to establish a prima facie case in an action to foreclose a mortgage, a plaintiff must produce the mortgage, the note, and evidence of default (see JPMorgan Chase Bank, N.A. v. Weinberger , 142 A.D.3d 643, 644, 37 N.Y.S.3d 286 [2d Dept. 2016] ; HSBC Bank USA, N.A. v. Spitzer , 131 A.D.3d 1206, 1206-1207, 18 N.Y.S.3d 67 [2d Dept. 2015] ). Here, plaintiff established its prima facie entitlement to judgment as a matter of law by producing the mortgage, the note, and evidence of default in payment.
In opposition, defendant argues that the note and the mortgage only permit acceleration upon the death of a "borrower" if the property is not the principal residence of at least one surviving borrower. Defendant argues that she is a borrower and continues to reside in the home.
"While the meaning of a contract is ordinarily a question of law, when a term or clause is ambiguous and the determination of the parties' intent depends upon the credibility of extrinsic evidence or a choice among inferences to be drawn from extrinsic evidence, then the issue is one of fact [ ]. Whether such an ambiguity exists is a question for the court" ( Amusement Business Underwriters v. American International Group, Inc. , 66 N.Y.2d 878, 880-881, 498 N.Y.S.2d 760, 489 N.E.2d 729 [1985] [internal citations omitted] ).
In support of her argument, defendant relies upon Nationstar Mortgage LLC v. Goeke , 151 A.D.3d 1237, 57 N.Y.S.3d 223 (3d Dept. 2017) and Aurora Loan Servs. v. Weisblum , 85 A.D.3d 95, 923 N.Y.S.2d 609 (2d Dept. 2011) overruled in part Citibank, N.A. v. Contin-Scheurer , 172 A.D.3d 17, 98 N.Y.S.3d 273 (2d Dept. 2019).
The facts of Goeke are similar to the facts herein. In Goeke , the defendant and her husband obtained a reverse mortgage loan. Both parties signed the mortgage, however, only the defendant's husband signed the note. After the husband died, the lender commenced a foreclosure action against the defendant. In determining whether the defendant was a borrower, the Third Department found that the terms of the note and mortgage were ambiguous and therefore, considered extrinsic evidence. The Court found that the defendant signed two notices that identified her as a non-borrower. However, those notices described a non-borrower as someone who had no vested ownership interest in the property. The Goeke Court found that defendant did not divest her interest in the property as she held a reversionary interest and her husband held a life estate. Further, the loan application solely identified the husband as the borrower with empty co-borrower boxes, however, both parties' names were listed on the HUD Settlement Statement. Moreover, the defendant submitted an affidavit attesting that the agent who discussed the reverse mortgage with them explained that the defendant could remain in the home in the event of her husband's death.
The Goeke Court found that the extrinsic evidence as to whether the defendant was a borrower was also conflicting. Therefore, the Court denied the plaintiff and the defendant's motions for summary judgment on the grounds that material issues of fact existed as to whether the parties intended for the plaintiff to be able to foreclose on the property despite defendant continuing to make it her principal residence.
In Weisblum , the Court was faced with the issue of whether one of the defendants was a borrower and entitled to a RPAPL 1304 notice. There, Steven Weisblum and Patti Weisblum initially obtained a mortgage loan in April 2006 and obtained a subsequent loan in December 2006. Along with the second mortgage, the Weisblums executed a Consolidation Extension and Modification Agreement ("CEMA") consolidating both loans into a single lien. In the CEMA both parties were identified as the borrowers and they both signed the agreement. However, the consolidated note was only signed by the bank and Steven Weisblum.
In determining whether Patti Weisblum was entitled to a notice pursuant to RPAPL 1304, which provides that such notice must be sent to the "borrower" but does not define the term, the Court found that the record was sufficient to establish that Patti Weisblum was a borrower. The Court found that that both parties executed the CEMA, were collectively defined in the CEMA as the "borrower", and agreed to pay the amounts due under the consolidated note, which was expressly incorporated by reference in the CEMA. In addition, the CEMA provided that the holder of the consolidated note "may enforce its rights" against each borrower, and the bank sought to enforce its rights under the consolidated note and mortgage against both of the Weisblums.
The circumstances of this case, albeit unfortunate, are distinguishable from Goeke and Weisblum . Initially, this Court finds that the note and mortgage are not ambiguous as to whether the defendant is a borrower. It is clear from these documents that only Goldman is the intended borrower. Pursuant to the note, "borrower" means "each person signing at the end of this Note". The note was only executed by Goldman. The mortgage identifies the mortgagor and borrower as "Ira Goldman, A Life Estate With Full Powers Remainder unto Mary Hoar". Although both Goldman and defendant signed the mortgage and the typewritten word "Borrower" was not crossed out on the defendant's signature line she signed the document as "Mary Hoar, Remainderman".
"A remainder is an estate created in favor of a person other than the creator that is to commence in possession at a future time, either without the intervention of a precedent estate or on the determination by lapse of time, or otherwise, of a precedent estate created at the same time" (11 Warren's Weed New York Real Property § 119.01 [2019] ).
Even if the note and mortgage were ambiguous as to whether defendant is a borrower, the extrinsic evidence resolves any such ambiguity leading to the sole inference that the defendant is not a borrower. "Extrinsic evidence may be used to clarify ambiguities, but not to create them" ( JP Morgan Chase Bank, N.A. v. Cellpoint Inc. , 54 A.D.3d 366, 367, 865 N.Y.S.2d 219 [2d Dept. 2008] ).
As plaintiff correctly points out, the other documents executed at or near the time of the note and mortgage establish that the defendant is not a borrower. The note, loan application and addendum, good faith estimate, and the HUD settlement statement, solely identify Goldman as the borrower. Most significantly, however, is the Ownership Interest Certification of a non-borrowing spouse which was executed by defendant on May 15, 2010, and expressly states the following:
If you have an ownership interest in the above reference property but will NOT be a borrower under the proposed reverse mortgage, you need to be
aware of the following:
The Lender does not recommend or require any changes to the ownership of real property as a condition to making a reverse mortgage loan. However, the reverse mortgage program has certain restrictions that prevent some property owners from being eligible borrowers. These restrictions also prohibit an individual from holding an ownership interest in the property, if they are not an eligible borrower.
As a result of these restrictions, any non-eligible owners will be required to relinquish their ownership interest in the property. By relinquishing your ownership interest, you are affecting your legal rights. Generation Mortgage Company strongly suggests that you consult with your financial and/or legal advisor(s) to determine if this reverse mortgage loan is in your best interests.
If you continue to reside in the property after divesture and the borrower predeceases you or no longer occupies the property as their primary residence, the reverse mortgage will become due and payable. Typically, the borrower's estate must pay off the reverse mortgage through the proceeds of the sale of the property or through a refinance into a new mortgage.
Upon signing the certification, defendant acknowledged that she read the disclosure, understood the possible consequences of not being a borrower, and agreed that the lender made no representations regarding her legal rights. Unlike Goeke , the ownership interest certification clearly evidences the parties intent. Thus, even considering extrinsic evidence, the Court finds that the documentary evidence on this record establishes that the defendant is not a borrower as a matter of law (see e.g. Cadet v. James B. Nutter & Co. , 133 A.D.3d 561, 19 N.Y.S.3d 307 [2d Dept. 2015] ).
The Court also finds that defendant's argument that she has a life estate in the property that is not subject to the mortgage is without merit. The quitclaim deed conveys a life estate to Goldman, with defendant as remainder.
Accordingly, the plaintiff's motion for summary judgment, pursuant to CPLR 3212, against Mary Hoar, a default judgment against the non-appearing parties, the appointment of a referee, and to amend the caption is GRANTED and the order of reference is signed herewith.
Counsel for all parties are directed to appear in the Mandatory Appearance Part — Foreclosure, Room 800, on August 8, 2019, at 2:00 p.m . for further proceedings.