Freedom Mortgage Corporation v. Heirs

Background

Freedom Mortgage Corporation sued Michelle Heirs to foreclose on a mortgage encumbering property at 3 Prospect Drive, Yonkers, New York. Heirs obtained a residential mortgage loan from Greenway Mortgage Funding Corp. on April 25, 2016, in the original principal amount of $365,345. The loan was documented by a promissory note and secured by a mortgage. The mortgage was later assigned to Freedom Mortgage, which the court found was the holder of the note and assignee of the mortgage.

Heirs stopped making loan payments beginning July 1, 2018. Freedom Mortgage sent a 90-day pre-foreclosure notice, filed the required notice with New York’s Superintendent of Financial Services, and mailed a notice of default. Freedom Mortgage filed the foreclosure action on February 11, 2019. Although Heirs initially failed to answer, she later filed an answer after the court directed her to respond. She did not file opposition to the summary-judgment motion.

Summary-Judgment Standard

Summary judgment is appropriate when the evidence shows that there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. The court must view the evidence in the light most favorable to the nonmoving party. Although Heirs was representing herself, the court independently reviewed the record and did not treat her failure to oppose the motion alone as sufficient grounds for granting it.

Analysis

Under New York law, a mortgagee establishes a prima facie foreclosure case by producing the note, the mortgage, and proof of default. This creates a presumptive right to foreclose, after which the defendant must establish an affirmative defense.

The court held that Freedom Mortgage met that initial burden. It produced the note and mortgage and submitted an affidavit and supporting documents showing that Heirs had defaulted. Heirs did not provide an affidavit or other evidence disputing those submissions.

Heirs asserted two related defenses: that Freedom Mortgage had agreed to a mortgage modification that made the case moot, and that Freedom Mortgage had previously agreed to a modification but later reneged. The court rejected both defenses. Heirs offered no evidence that the alleged modifications existed and did not describe them with enough specificity to create a genuine factual dispute.

The court also explained that, under New York law, a mortgage modification must be written and signed by the party to be charged. The court further stated that the parole evidence rule bars evidence of an alleged oral modification that contradicts an express term of the note and mortgage. Because Heirs produced no documentary proof of a written modification, the court concluded that any oral modification would not be legally effective.

Disposition

Judge Kenneth M. Karas granted Freedom Mortgage’s Motion for Summary Judgment. The court directed the Clerk to terminate the motion, enter judgment for Freedom Mortgage, close the case, and mail Heirs a copy of the opinion.