Nationstar Mortgage LLC v. Hunte

Background

Nationstar Mortgage LLC brought a foreclosure action against Esther Hunte concerning property identified in the opinion as 42 Brooker Drive, Newburgh, New York. In a June 1, 2020 opinion, the court partially granted Nationstar’s second motion for summary judgment but identified uncertainty about the validity of a loan modification agreement and its possible effect on damages.

The court then considered Nationstar’s additional submissions and Hunte’s motion to dismiss. Hunte was litigating without a lawyer. Her arguments included that a related New York state-court action was pending, that Nationstar lacked standing because of defects in the chain of assignments, that Nationstar acted in bad faith and had unclean hands, and that Nationstar had not proved a default.

Motion to Dismiss

The court denied Hunte’s motion to the extent it sought dismissal of the complaint. It stated that the June Opinion had already considered and rejected the arguments about the related state-court action, standing, bad faith and unclean hands, and proof of default.

The court also rejected abstention based on the Rooker-Feldman and Colorado River doctrines. It explained that the federal action concerned nonpayment beginning March 1, 2016, after the state-court case had been settled, and that the two proceedings were not clearly parallel.

Hunte also asked the court to strike an affidavit from the record. The court declined to do so, explaining that the affidavit adequately supported the admission of payment-system notes as business records. The court separately noted that the record was unclear about whether Nationstar had violated federal rules concerning foreclosure activity during loss-mitigation review, but stated that such a violation was not a defense to foreclosure.

Loan Modification

The court examined whether the loan modification agreement became effective. Nationstar’s declaration stated that its representative signed the agreement on June 5, 2015, before a notary whose commission was valid at that time. The court therefore found no factual dispute about Nationstar’s signature.

The remaining issue was whether Hunte received a copy of the agreement signed by Nationstar. Nationstar’s affidavit stated that its business records showed the executed agreement was mailed to Hunte on June 12, 2015, but the affidavit did not describe Nationstar’s standard mailing process or state that the affiant personally mailed the agreement. The court concluded that Nationstar had not shown that the agreement was sent to or received by Hunte.

The agreement stated that the loan documents would not be modified unless and until Hunte received a copy signed by Nationstar. The court treated that receipt requirement as a condition that had to occur before the contract became effective. Because that condition was not shown to have occurred, the court concluded that the modification agreement was void. It rejected Nationstar’s argument that Hunte’s ten payments ratified the agreement, explaining that a void agreement cannot be ratified.

Disposition

The court stated that, as explained in the June Opinion, Nationstar was entitled to a foreclosure judgment. However, it remained unclear whether that judgment should rest on the original mortgage and note or on the modification agreement, and how that choice would affect damages. The court therefore declined to enter judgment at that time and allowed Nationstar to make further submissions concerning Hunte’s receipt of the modification agreement and damages under the original mortgage and note.