[*1]
HSBC Bank USA, N.A. v Cherry
2007 NY Slip Op 52378(U) [18 Misc 3d 1102(A)]
Decided on December 17, 2007
Supreme Court, Kings County
Schack, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on December 17, 2007
Supreme Court, Kings County


HSBC Bank USA, N.A., as Indenture Trustee For the Registered Noteholders of Renaissance Home Equity Loan Trust 2005-4, Renaissance Home Equity Loan Asset-Backed Notes, Series 2005-4, Plaintiff,

against

Albert Cherry, Machanda Dixon, et al., Defendants.




21335/07



Appearances:

Plaintiff:

Peter T. Roach & Associates, PC

Jericho NY

Defendant:

There is no defense counsel because this was a plaintiff RJI order appointing a referee to compute and no defendant answered.

Arthur M. Schack, J.

Plaintiff's application, upon the default of all defendants, for an order of reference, for the [*2]premises located at 3570 Canal Avenue, Brooklyn, New York (Block 6978, Lot 20, County of Kings) is denied without prejudice. The "affidavit of merit" submitted in support of this application for a default judgment is not by an officer of the plaintiff or someone with a power of attorney from the plaintiff. Leave is granted to plaintiff, HSBC

BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-4, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-4

(HSBC), to renew its application for an order of reference upon presentation to the Court of compliance with the statutory requirements of CPLR § 3215 (f), with "an affidavit of facts" executed by someone who is an officer of HSBC or has a valid power of attorney from HSBC. Further, the Court, upon renewal of the application for an order of reference requires a satisfactory explanation to questions with respect to: the assignment of the instant nonperforming mortgage loan from the original lender, Delta Funding Corporation to HSBC Bank; the employment history of one Scott Anderson, who assigned this mortgage to HSBC and then swears to be HSBC's servicing agent; and the relationship between HSBC, Ocwen Federal Bank, FSB (OCWEN), Deutsche Bank and Goldman Sachs, who all seem to share office space at Suite 100 of 1661 Worthington Road, West Palm Beach, Florida 33409 (Suite 100).

Background


Defendants, Albert Cherry and Machanda Dixon, borrowed $237,000 from Delta

Funding Corporation, on November 14, 2005. The note and mortgage were recorded in the Office of the City Register, New York City Department of Finance on January 23, 2006, at City Register File Number (CRFN) 2006000038736. Delta Funding Corporation, by Mortgage Electronic Registration Systems, Inc. (MERS), its nominee for the purpose of recording the mortgage, assigned the note and mortgage to plaintiff HSBC, on June 13, 2007, with the assignment recorded on August 13, 2007 at CRFN 2007000416732.

Plaintiff's moving papers for an order of reference fails to present an "affidavit

made by the party," pursuant to CPLR § 3215 (f). The application contains an "affidavit of merit" by Scott Anderson, who states that he is "the Senior Vice President of Residential Servicing for Ocwen Federal Bank, FSB, servicing agent of HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-4, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-4, the plaintiff herein." For reasons unknown to the Court, plaintiff HSBC has failed to provide any power of attorney authorizing OCWEN to go forward with the instant foreclosure action. Therefore, the proposed order of reference must be denied without prejudice. Leave is granted to plaintiff HSBC to comply with CPLR § 3215 (f) by providing an "affidavit made by the party," whether by an officer of HSBC or someone with a valid power of attorney from HSBC. Then, and only then, will the Court grant the proposed order of reference for the instant mortgage.

Further, according to plaintiff's application, the default of defendants Cherry and Dixon began with the nonpayment of principal and interest due on August 1, 2006. Yet, more than ten months later, plaintiff HSBC was willing to take an assignment of a nonperforming loan from Delta Funding Corporation. The Court wonders why HSBC would purchase a nonperforming loan, more than ten months in arrears? [*3]

Additionally, plaintiff HSBC must address a second matter if it renews its application for an order of reference upon compliance with CPLR § 3215 (f). In the instant action, as noted above, Scott Anderson, in his affidavit, executed on June 15, 2007, states he is Vice President of OCWEN. Yet, the June 13, 2007 assignment from MERS to HSBC is signed by the same Scott Anderson as Vice President of MERS. Did Mr. Anderson change his employer between June 13 2007 and June 15, 2007. The Court is concerned that there may be fraud on the part of HSBC, or at least malfeasance. Before granting an application for an order of reference, the Court requires an affidavit from Mr. Anderson describing his employment history for the past three years.

Lastly, the court notes that Scott Anderson, in the MERS to HSBC assignment gave his address as Suite 100. This is also the address listed for HSBC in the assignment. In a foreclosure action that I decided on May 11, 2007 (Deutsche Bank National Trust Company, as Trustee of Argent Mortgage Securities, Inc. Asset-backed Pass Through Certificates Series 2005-W4 Under the Pooling and Servicing Agreement Dated as of November 1, 2005, Without Recourse v Gustavo Castellanos, et. al., 15 Misc 3d 1124 [A]), Deutsche Bank assigned the mortgage to MTGLQ Investors, L.P.. I noted, at 4-5, that MTGLQ Investors, L.P.:

According to Exhibit 21.1 of the November 25, 2006 Goldman Sachs

10-K filing with the Securities and Exchange Commission . . . is a

"significant subsidiary" of Goldman Sachs. . . . [T]he January 19, 2007

assignment has the same address for both the assignor Deutsche Bank

and the assignee MTGLQ Investors, L.P., at 1661 Worthington Road,

Suite 100, West Palm Beach, Florida 33409. The Court will not

speculate about why two major financial behemoths, Deutsche Bank

and Goldman Sachs share space in a West Palm Beach, Florida office

suite.

In the instant action, with HSBC, OCWEN and MERS, joining with Deutsche Bank and Goldman Sachs at Suite 100, the Court is now concerned as to why so many financial goliaths are in the same space. The Court ponders if Suite 100 is the size of Madison Square Garden to house all of these financial behemoths or if there is a more nefarious reason for this corporate togetherness. If HSBC seeks to renew its application for an order to reference, the Court needs to know, in the from of an affidavit, why Suite 100 is such a popular venue for these corporations.

Discussion

Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of the defendant or defendant's admission of mortgage payment arrears, to appoint a referee "to compute the amount due to the plaintiff." In the instant action, plaintiff's application for an order of reference is a preliminary step to obtaining a default judgment of foreclosure and sale. (Home Sav. Of Am., F.A. v Gkanios, 230 AD2d 770 [2d Dept 1996]).

Plaintiff has failed to meet the clear requirements of CPLR § 3215 (f) for a default judgment.


On any application for judgment by default, the applicant

shall file proof of service of the summons and the complaint, or

a summons and notice served pursuant to subdivision (b) of rule

305 or subdivision (a) of rule 316 of this chapter, and proof of [*4]

the facts constituting the claim, the default and the amount due

by affidavit made by the party . . . Where a verified complaint has

been served, it may be used as the affidavit of the facts constituting

the claim and the amount due; in such case, an affidavit as to the

default shall be made by the party or the party's attorney. [Emphasis

added].

Plaintiff has failed to submit "proof of the facts" in "an affidavit made by the party." The "affidavit of merit" is submitted by Scott Anderson, "the Senior Vice President of Residential Servicing for Ocwen Federal Bank, FSB, servicing agent of HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-4, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-4, the plaintiff herein." Mr. Anderson must have, as plaintiff's agent, a valid power of attorney from HSBC to OCWEN for that express purpose. Additionally, if a power of attorney is presented to this Court and it refers to pooling and servicing agreements, the Court needs a properly offered copy of the pooling and servicing agreements, to determine if the servicing agent may proceed on behalf of plaintiff. (EMC Mortg. Corp. v Batista, 15 Misc 3d 1143 (A) [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 14 Misc 3d 1201 (A) [Sup Ct, Suffolk County 2006]).

Also, in the instant action, the complaint is unverified. In Blam v Netcher, 17

AD3d 495, 496 [2d Dept 2005], the Court reversed a default judgment granted in Supreme Court, Nassau County, holding that:

In support of her motion for leave to enter judgment against

the defendant upon her default in answering, the plaintiff failed to

proffer either an affidavit of the facts or a complaint verified by a

party with personal knowledge of the facts (see CPLR 3215 (f):

Goodman v New York City Health & Hosps. Corp. 2 AD3d 581

[2d Dept 2003]; Drake v Drake, 296 AD2d 566 [2d Dept 2002];

Parratta v McAllister, 283 AD2d 625 [2d Dept 2001]). Accordingly,

the plaintiff's motion should have been denied, with leave to renew

on proper papers (see Henriquez v Purins, 245 AD2d 337, 338

[2d Dept 1997]).

(See Hazim v Winter, 234 AD2d 422 [2d Dept 1996]; Finnegan v Sheahan, 269 AD2d 491 [2d Dept 2000]; De Vivo v Spargo, 287 AD2d 535 [2d Dept 2001]; Peniston v Epstein, 10 AD3d 450 [2d Dept 2004]; Taebong Choi v JKS Dry Cleaning Eqip. Corp., 15 AD3d 566 [2d Dept 2005]; Matone v Sycamore Realty Corp., 31 AD3d 721 [2d Dept 2006]; Crimmins v Sagona Landscaping, Ltd., 33 AD3d 580 [2d Dept 2006]).

Therefore, the instant application for an order of reference is denied without prejudice, with leave to renew. The Court will grant plaintiff HSBC an order of reference when it: submits an affidavit by either an officer of HSBC or someone with a valid power of attorney from HSBC, possessing personal knowledge of the facts; presents an affidavit from Scott Anderson clarifying his employment and what corporation he serves as an officer. Further, irrespective of his employment history, Mr. Anderson must explain why HSBC would purchase a nonperforming loan from Delta Funding Corporation, and why HSBC, OCWEN, MERS, Deutsche Bank and [*5]Goldman Sachs all share office space in Suite 100.

Conclusion


Accordingly, it is

ORDERED, that the application of plaintiff, HSBC BANK N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-4, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-4, for an order of reference for the premises located at 3570 Canal Avenue, Brooklyn, New York (Block 6978, Lot 20, County of Kings), is denied without prejudice; and it is further

ORDERED, that leave is granted to plaintiff, HSBC BANK N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-4, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-4, to renew its application for an order of reference for the premises located at 3570 Canal Avenue, Brooklyn, New York (Block 6978, Lot 20, County of Kings), upon presentation to the Court upon presentation to the Court of an affidavit from Scott Anderson, within thirty (30) days from the date of this decision and order: describing his employment history for the past three years; an explanation of why plaintiff HSBC BANK N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-4, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-4 would purchase a nonperforming loan from Delta Funding Corporation; and, an explanation of why does HSBC BANK N.A., share office space at Suite 100, 1661 Worthington Road, West Palm Beach, Florida 33409 with Ocwen Federal Bank FSB, Mortgage Electronic Registration Systems, Inc., Deutsche Bank and Goldman Sachs.

This constitutes the Decision and Order of the Court.

ENTER

___________________________

HON. ARTHUR M. SCHACK

J. S. C.