Nationstar Mortgage LLC v. Hunte

Background

Nationstar Mortgage LLC brought this foreclosure action against Esther Hunte concerning a mortgage on 42 Brooker Drive, Newburgh, New York. The court previously granted in part and denied in part Nationstar’s second motion for summary judgment. It found that Nationstar had established a basic case for foreclosure but did not enter judgment because questions remained about the enforceability of a June 2015 loan-modification agreement and the resulting damages.

After additional submissions and a hearing, the court again found that Nationstar had not shown that the loan-modification agreement was valid and enforceable. Nationstar later moved for a judgment of foreclosure and sale based on the original loan documents. At a June 1, 2022 hearing, the court granted that motion in full, and it entered the judgment on June 6, 2022.

Motion to Stay Pending Appeal

Hunte moved to stay the June 6 judgment while pursuing an appeal. A stay pending appeal requires consideration of four factors: the applicant’s likelihood of success, possible irreparable injury without a stay, harm to other interested parties, and the public interest.

Hunte primarily relied on a “dual-tracking” theory. She argued that the Dodd-Frank Act and related Consumer Financial Protection Bureau regulations barred a mortgage servicer from proceeding with foreclosure in certain circumstances when a borrower had submitted a complete loss-mitigation application. The court stated that it had repeatedly held that a dual-tracking claim under those regulations was not a defense to foreclosure, and Hunte had not formally presented such a claim in this action.

Hunte also challenged the accuracy of Nationstar’s damages figures. The court treated that argument as a challenge related to the original loan documents. It said that the foreclosure judgment used the original promissory note, whose validity Hunte had not challenged, rather than the disputed loan-modification agreement. The court further applied judicial estoppel, a doctrine that generally prevents a party from taking a contradictory position after successfully maintaining an earlier position in the same legal proceeding.

Court’s Ruling

Judge Karas denied the Motion to Stay Judgment Pending Appeal. The court found that Hunte had not made the required strong showing that she was likely to succeed on appeal. Although the court charitably understood her claimed irreparable harm as potentially involving the loss of the property through a foreclosure sale, it found that the remaining factors also weighed against a stay. Nationstar had been unable to foreclose since at least the court’s June 2020 decision and had advanced more than $100,000 in escrow. The court also found that the public interest favored finality in a case pending for more than six years. The court declined Hunte’s alternative requests for the same reasons and directed the clerk to terminate the motion.