An Order to Show Cause, dated the 3rd day of November, 2006, having been brought on by Sharon S. Cato, one of the named defendants herein, petitioning the court to allow her a twenty-one (21) day extension to exercise her right of redemption to 540 Willoughby Avenue, Brooklyn, NY 11206, and staying any transfer in the rights, title, and interest thereto. Ms. Cato asserts that she was misled by a party with ties to the successful foreclosure auction bidder that all she had to do to overcome the foreclosure of her said home was to file for bankruptcy.

In opposition, the plaintiff Freemont Investment & Loan, by its attorney, asserts that on May 26, 2005, it had extended Ms. Cato a $522,000.00 loan for the purchase of the afore-mentioned property, for which she made one payment and thereafter defaulted as of August 1, 2005. Ms. Cato subsequently defaulted on the summons and complaint seeking foreclosure, and did not appear at the foreclosure sale despite having been given notice thereof. In addition, she filed three separate bankruptcies in an attempt to forestall the foreclosure, which were all dismissed for failure to file the required documentation. The subject property was sold at public sale in full compliance with all applicable laws, rules, and procedures of this state. Finally, neither plaintiff nor its counsel was privy to any alleged deception practiced on the plaintiff.

Australian Open Realty, LLC, the successful auction bidder of the subject property, has cross-moved for an order granting it mandatory intervention in this action, pursuant to CPLR 1012 (a ) (3), and denying Ms. Cato's order to show cause. Its attorney repeats the chronology set forth by the plaintiff, and argues that the long-standing rule in New York is that ". . .absent fraud, collusion, mistake, or misconduct, the owner of the equity of redemption in real property has an absolute right to redeem her property up to the moment of a sale occurs. . . .[h]owever, once a judicially allowed sale takes place, the equity of redemption is extinguished and forever lost." In addition, "even where a defendant's equity or redemption has not already been extinguished, the exclusive mechanism for a defendant to redeem her property is governed by RPAPL §1341[,]" [*2]which requires the payment into court of the full amount owed in principal and interest, the costs of the action, and the expenses of the proceedings to sell. Finally, it is asserted that the plaintiff has offered no valid basis to set aside the foreclosure sale inasmuch as she did not comply with the foregoing statutory requirements; she did receive proper notice of the sale; and her reliance on a non-party misrepresentation, with no relationship to any of the parties herein is of no legal consequence.

Counsel for plaintiff opposes the just discussed cross-motion on the ground that Australian Open Realty, LLC has established no prejudice since it can be made whole by a refund of its foreclosure sale deposit in the event that Ms. Cato's application is granted. A fortiori, counsel asserts that the actual bidder at the foreclosure sale on behalf of Australian Open Realty, LLC was the person who had ill-advised Ms. Cato with regards to preventing the foreclosure.

In response to the foregoing, Australian Open Realty, LLC's president submitted an affirmation wherein he 1. acknowledged discussions with Ms. Cato but made the following distinctions; to wit, Ms. Cato's first bankruptcy filing was prior to any contact with him; that with the second filing, she signed up for credit counseling with him, but failed to follow-up; i.e., ". . .to properly promulgate a plan, make plan payments to the Trustee[,] or provide financial disclosure documents to the chapter 13 trustee[;]" 2. contended that from the dismissal date of the second bankruptcy filing (September 26, 2006) to the date of the foreclosure sale (November 2, 2006), he had absolutely no contact with Ms. Cato; and, 3. asserted that he ". . .always had the right—as did every member of the public—to freely bid at the regularly held public foreclosure sale."

This court, in the matter of Abley Properties, Inc. v. Dennis Reid, et. al., 2005 NY Slip Op 51438(U), duly noted that "[t]he law in this area is unequivocal. The owner of the equity redemption or any person with an interest in the mortgaged premises has a right to redeem the property at any time prior to the actual sale under a judgment of foreclosure' (see NYCTL 1996-1 Trust v. LFJ Realty Corp., supra ; United Capital Corp. v. 183 Lorraine St. Assoc., 251 AD2d 400, 675 NYS2d 543; First Federal Savings & Loan assn. of Port Washington v. Smith, 83 AD2d 601, 441 NYS2d 309; Belsid Holding Corp. v. Dahm, 12 AD2d 499, 207 NYS2d 91). RPAPL §1341 explicitly provides that "where an action is brought to foreclose a mortgage upon real property upon which any part of the principal or interest is due and another portion of either is to become due, and the defendant pays into court the amount due for principal and interest and the costs of the action, together with the expenses of the proceedings to sell, if any, the court shall: 1. Dismiss the complaint without costs against the plaintiff, if the payment is made before judgment directing sale; or 2. Stay all proceedings upon judgment, if the payment is made after judgment directing sale and before sale; but, upon a subsequent default in the payment of principal or interest, the court may make an order directing the enforcement of the judgment for the purpose of collecting the sum then due." The Appellate Division has made it abundantly clear that [i]n the absence of fraud, collusion, mistake, or misconduct, a court is without discretion to set aside a sale of foreclosure unless the requirements of RPAPL §1341 are met.' Hence, where a defendant ". . . failed to make a payment into court and to make a motion to stay the sale of the property as required by RPAPL §1341(2), [the] right to redemption expired" (see NYCTL 1996-1 Trust v. LFJ Realty Corp., supra , citing, Bankers Fed. Sav. & Loan Assn. v. House, 182 AD2d 602, 581 NYS2d 858; EMC Mtge. Corp. v. Bobb, 296 AD2d 476, 745 NYS2d 204; Green Point Sav. Bank v. Oppenheim, 237 AD2d 409, 655 NYS2d 560). Insofar as any allegation of improper service is concerned, the Appellate Division made it clear, in American Business Credit, Inc. v. Sanabria, 2005 WL 1532405 (NYAD 2d Dept.), 2005 NY Slip Op. 05542, that a . . .conclusory denial of receipt [of process] was [*3]insufficient to raise an issue of fact in opposition to the plaintiff's prima facie evidence of proper service' (citing, Dolec Consultants v. Lancer Litho Packaging Corp., 245 AD2d 415, 666 NYS2d 458; Manhattan Sav. Bank v. Kohen, 231 AD2d 499, 647 NYS2d 256; Sando Realty Corp. v. Aris, 209 AD2d 682, 619 NYS2d 140)."

In the matter sub judice, this court notes that on May 26, 2005, Ms. Cato was given a mortgage note of $522,000.00 by the plaintiff. As of December 29, 2006, Ms. Cato's outstanding debt was in the amount of $594,749.72. Ms. Cato had furnished the court with a proposed contract of sale for $450,000.00. The auction buyer bid $561,000.00 on the subject property. When counsel for Ms. Cato was advised of that figure, she apprised the court that Ms. Cato had another buyer who had offered $560,000.00 for the property. The court was subsequently advised that that buyer would meet the auction price. By letter, dated December 22, 2006 (following a December 19, 2006 telephone conference with the parties herein), plaintiff's counsel advised that a deficiency judgment would not be pursued in the captioned matter.

Although neither plaintiff nor her attorney have raised any issues insofar as the initial loan to Ms. Cato, this court is dumbstruck as to how she qualified for such a loan in the first instance. That her current predicament is simply the result of a drastic change in her financial circumstances soon after loan acquisition or that it was an instance of unadulterated predatory lending is a matter, though not presently before the court, that plaintiff and her counsel should, if they see fit, pursue with the New York State Banking Department or the New York State Attorney General's Office.

That being said, this court, having considered all of the preceding, certainly sympathizes with Ms Cato's plight, and readily understands her feelings of having been manipulated by Australian Open Realty, LLC's operative. Nevertheless, this court has not been presented with sufficient proof from which to adduce that the plaintiff had not in fact been properly served, or to conclude that there was any actual fraud, collusion, mistake, or misconduct in the within matter, much less that any collusion occurred in the auction sale by and/or between plaintiff, Freemont Investment & Loan, and the auction buyer, Australian Open Realty, LLC.

WHEREFORE, on the basis of all of the foregoing, Ms. Cato's Order to show Cause is denied in its entirety. Australian Open Realty, LLC's cross-motion is accordingly denied as moot. This constitutes the decision and order of the court.

ENTER:________________________________

JSC