Prior to the enactment of Real Property Actions and Proceeding Law (“RPAPL”) § 1302-a, the defendants waived their affirmative defense of standing in a residential foreclosure action by failing to raise that defense in a response or motion pre-response to reject. See, for example, JP Morgan Chase Bank, Nat’l Ass’n v. Butler, 129 AD3d 777, 780 (2d Dep’t 2015). However, since the promulgation of RPAPL § 1302-a, which entered into force on December 23, 2019, defendants can invoke a permanent defense to all time in a residential foreclosure action. This question arises both when the borrower has defaulted in the foreclosure action and seeks to set aside that default to assert a permanent defense and when a response has been filed but no permanent defense has been filed. was invoked initially. The Second Department recently issued rulings dealing with both the interaction between the new law and a borrower’s failure to respond and the ability of a respondent responding to amend to assert a permanent defense after the judgment. summary has been granted. In addition, the Court of Appeal recently clarified the application of the statute in the context of an appeal of an order made before the enactment of the RPAPL § 1302-a.

In November 2020, in interpreting for the first time the RPAPL § 1302-a, the Appeal Division, second department, considered that standing remains a non-jurisdictional defense, which a defendant borrower must invoke in such a manner. affirmative to implicate him in a foreclosure action. See GMAC Mortg., LLC v. Coombs, 191 AD3d 37, 47 (2d Dep’t 2020). The Second Department noted that “the waiver of the affirmative defense of standing under CPLR 3211 (e) may be revoked by the amendment of a pleading in accordance with CPLR 3025”. Identifier. 45. In addition, the Court held that the Supreme Court, at its discretion, may authorize a defendant to raise a summary judgment defense first. Identifier. at 48-49. In Coombs, although the Second Department determined that the trial court should have allowed the defendant to raise an affirmative standing defense in an amended response, the Appeal Division also found that the plaintiff had presented sufficient evidence of standing in its replies. Identifier. at 50-51; see also One W. Bank, FSB v. Rosenberg, 2020 NY Slip Op 08070 (2d Dep’t 2020) (“Although the defendant has not waived the defense of standing, the evidence submitted by the plaintiff has demonstrated his standing and the defendant has failed not raised a question of fact which could be the subject of trial ”) (internal citations omitted); but see US Bank NA v. Blake-Hovanec, 2021 NY Slip Op 00893, * 8- * 9 (2d Dep’t 2021) (finding that the trial court should have allowed the defendant’s cross-motion to amend to assert an affirmative defense of lack of standing for act, and “[i]In response, the applicant has not demonstrated his legal capacity ”).

In the context of a defaulting borrower, rather than a responding defendant who omitted a permanent defense, the Second Department determined that while a permanent defense can be the “meritorious defense” required to set aside that default, a defendant borrower must always first establish a reasonable excuse for that default in order to raise any potentially meritorious standing defense. See, for example, One W. Bank, FSB v. Rosenberg, 189 AD3d 1600, 1601-1602 (2d Dep’t 2020) (finding that the trial court should have found the defendant’s excuse reasonable, although the defendant did not establish the plaintiff’s lack of standing and “compliance with legal and / or contractual notification requirements” to establish its prima right to foreclosure).

Additionally, in December 2020, the Court of Appeal closed the year with a decision providing some clarity on the appellate review of permanent waiver issues following the enactment of RPAPL § 1302-a, apparently finding that an appellate court is considering standing on the basis of law at the time the summary judgment was rendered. See US Bank NA v. Nelson, 36 NY3d 998, 2020 NY LEXIS 2869, * 1 (December 17, 2020). More specifically, in Nelson, the Court of Appeal upheld the Second Department’s decision that the defendants withdrew their defense because they “failed to raise standing in their answers or in [timely] pre-response motions as required by CPLR 3211 (e) and accordingly, under the law in effect at the time of the orders appealed from, [and so] the defense has been lifted. Identifier. to * 1 (emphasis added). In particular, RPAPL § 1302-a was promulgated during the appeal period.

However, the Court of Appeal did not address the question of whether this statute allows defendants to raise the defense. in the court of first instance, presumably through a motion to quash and vary the response, while specifying that an appellate court must review the order appealed against based on the law time of the underlying Supreme Court order. Identifier. Any possible remedy under the law adopted subsequently is left only to the court of first instance. Identifier. at * 1- * 2 (“The defendants are free to apply to the court of first instance for all compensation available to them under this law. “) (I underline).



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