Miami Home LLC v. Salazar

Background

Miami Home LLC brought a foreclosure action against Manuel Salazar. On January 22, 2021, Salazar moved to stay, or pause, the action under New York’s COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020. The Act requires courts to stay foreclosure actions involving residential real property when a judgment of sale has not been issued. If the mortgagor provides a hardship declaration to the court, the stay must last until May 1, 2021.

Salazar submitted a hardship declaration. Miami Home LLC did not provide evidence rebutting it. Instead, the company argued that Salazar had been in default since 2012. The court held that this did not contradict Salazar’s statement that his financial situation had worsened because of the COVID-19 pandemic. The court also noted that the Act protects mortgagors who had been in default for a long time, including in actions filed on or before March 7, 2020.

Court’s Analysis

The court rejected Miami Home LLC’s argument that the Act applies only to foreclosure actions in state court. It found no language in the Act limiting its application to state-court cases and noted that the Act’s exemptions did not include actions brought in federal court. The court reasoned that limiting the Act to state-court actions would conflict with its purpose of avoiding foreclosures involving people experiencing financial hardship during the pandemic. The court also cited other cases in the circuit that had stayed pending foreclosure cases under the Act.

Disposition

For these reasons, Judge J. Paul Oetken granted Salazar’s motion to stay the action until May 1, 2021. The Clerk of Court was directed to close the motion at Docket Number 13.