Plaintiff's motion presents a very narrow issue which only affects a circumscribed number of foreclosure actions. The issue sub judice involves only those actions pending as of November 18, 2010, the effective date of Administrative Order 431/11, in which a Judgment of Foreclosure and Sale had been rendered, but the foreclosure sale had not yet occurred. Despite its limited application, the topic nevertheless bears discussion as germane to the ever-expanding case law generated in response to the national banking crisis which culminated after years of wide-spread predatory lending practices involving sub-prime, high cost and non-traditional home loans and continues in the wake of the economic downturn of 2008.

On December 13, 2005, Gilbert Beneway ("the homeowner") executed a 30-year adjustable rate note with the high interest rate of 10.5% for the first three years, adjustable every year thereafter with a cap of 16.5%, in favor of plaintiff Emigrant Mortgage Company, Inc. ("the Bank"). The loan amount of $112,750 was secured by property located at 216 Whalesback Road in Dutchess County, as evinced by the Mortgage Agreement executed the same date.

In June, 2008, the homeowner defaulted under the terms of the note, and the Bank commenced this foreclosure action on February 2, 2009. The complaint, as required by law, alleged that at the time the action was commenced, "plaintiff is the holder and owner of the subject mortgage and note, and has complied with Banking Law Section 595-a and 6-L or 6-M, if applicable and RPAPL Section 1304" (Complaint ¶6).

The homeowner did not answer the complaint, and the Bank applied for an Order of Reference which was rendered May 11, 2009. The order named Leslie Baum, Esq. as Referee to ascertain and compute the amount due. Thereafter, the Bank applied for a Judgment of Foreclosure and Sale which was rendered August 27, 2009. On December 10, 2009, the Bank assigned the mortgage to Emigrant Bank, formerly known as Emigrant Savings Bank and New York Private Bank & Trust (copy of assignment of mortgage annexed to moving papers at Ex B).

In response to the growing national concern over "robo-signing" and the overall accuracy of court documents submitted in support of foreclosure, the Chief Administrative Judge issued Administrative Order 431/11, effective November 18, 2010, which required that in every residential mortgage foreclosure action plaintiff's counsel file an Attorney Affirmation certifying that counsel has taken reasonable steps to insure the accuracy of the foreclosure filings. Since the Judgment in the instant action had already been issued, but the property had not yet been sold, the Bank was required to submit an Attorney Affirmation to the Referee and file a copy with the court five business days before the scheduled sale date (see AO 431/11).

The foreclosure sale was scheduled for December 13, 2011, and on November 1, 2011, the Bank's counsel filed the Attorney Affirmation of Accuracy with the Dutchess County Clerk's Office. Counsel averred that plaintiff's vice president informed him that after the action had been commenced, the loan was assigned to its affiliate Emigrant Bank and that at the time of the assignment and at all times thereafter "[P]laintiff had and continues to have both control and physical possession of the mortgage and the other original Note, allonge, an assignment of the [*2]mortgage and the other original loan documents, and the express authority to enforce the loan for and on behalf of the Assignee" (Deutsch Affirmation ¶3).

By undated letter to the Bank's attorney and the court, the Referee requested that the court approve the Attorney Affirmation as she believed the Affirmation raised issues of standing which she was not authorized to address. The Bank's counsel responded that the court had not communicated any concern that the Attorney Affirmation was insufficient. The court granted leave for the parties to make a formal application.

The Bank now moves to compel the Referee to conduct the sale of the subject premises at public auction pursuant to the Judgement of Foreclosure and Sale and, alternately, for the court to appoint a successor Referee to conduct the sale. In support of the motion, counsel submits a new Attorney Affirmation of Accuracy (see Mignardi Affirmation). The Bank contends that the homeowner waived any issue regarding standing and that the Referee has no authority to raise this issue.

The Referee takes no position on whether the sale should proceed. Rather, she merely requests that the court "preserve the validity and integrity of the foreclosure process" by reviewing the Attorney Affirmation which is required by Administrative Order.

The homeowner cross-moves to vacate his default pursuant to CPLR 5015(a)(3) and for leave to serve a late answer.

The Second Department has held that standing is not jurisdictional and, therefore, must be raised as a defense in the answer or asserted in a pre-answer motion to dismiss. Otherwise, the defense is waived (see Wells Fargo v Mastropaolo, 42 AD2d 239 [2d Dep't 2007] accord US Bank v Emmanuel, 83 AD3d 1047 [2d Dep't 2011] Deutsche Bank v Young, 66 AD3d 819 [2d Dep't 2009] Countrywide Home Loans v Delphonse, 64 AD3d 624 [2d Dep't 2009] HSBC v Dammond, 59 AD3d 679 [2d Dep't 2009]).^[FN1]

Apart from the issue of standing is the administrative requirement that banks must file an attorney affirmation of accuracy before any foreclosure sale may take place. The Chief Administrative Judge of the Courts of New York issued this requirement in response to the national "robo-signing" scandal, which raised severe and far-reaching questions about the [*3]legitimacy of the filings and prosecutions of countless foreclosure actions. This Administrative Order (AO 431/11 superceding AO 548/2010) requires plaintiffs' counsel in residential mortgage foreclosure actions to file with the court an affirmation that they have taken reasonable steps to verify the accuracy of documents submitted in support of the foreclosure action. As explained by Chief Judge Jonathan Lippman in a press release (OneWest Bank v Drayton, 29 Misc 3d 1021, 1040 - 41 [Sup Ct, Kings County 2010]):

"We cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs - such as a family home - during this period of economic crisis. This new filing requirement will play a vital role in ensuring that the documents judges rely on will be thoroughly examined, accurate, and error-free before any judge is asked to take the drastic step of foreclosure."

Given the procedural posture of this action, the Affirmation of Accuracy was not required to be filed with the court until five days before the foreclosure sale. Contrary to the Bank's contention, the Referee is not challenging plaintiff's standing in this action. Rather, the Referee is requesting that the court review the Affirmation of Accuracy before allowing the foreclosure action to proceed. Indeed, the rational behind the issuance of the Administrative Order would be rendered meaningless were the court not allowed to examine the affirmation to ensure the accuracy of the documents prior to the auction, after which a homeowner has little if any recourse against a defective foreclosure action. Upon such review, the court finds that the Affirmation of Accuracy complies with Administrative Order 431/11.

Even if the defense of standing were not waived, the court finds that the Affirmation of Accuracy does not raise any issues regarding the Bank's standing to bring this foreclosure action. The Bank properly alleged in the complaint that it was the owner and holder of the subject note and mortgage at the time the action was commenced and that the homeowner was in default. The Bank further alleged that the proper pre-action notices were given to the homeowner. In addition, in support of its application for a judgment of foreclosure and sale, the Bank submitted a copy of the mortgage and note. Moreover, contrary to the homeowner's contention, "an original mortgagee can continue an action even though it assigned its interest in the mortgage and note to another entity during the pendency of an action" (Indymac Bank v Thompson, 99 AD3d 669, 669 [2d Dep't 2012] see also GRP Loan, LLC v Taylor, 95 AD3d 1172 [2d Dep't 2012]). Accordingly, the Attorney Affirmation filed with the County Clerk on November 1, 2011, which includes a copy of the Assignment of Mortgage and copy of the Allonge to the Note, do not, without more, raise any issues regarding this plaintiff's right to foreclose upon the subject mortgage.

The homeowner cross-moves to, inter alia, vacate the default judgment based on fraud because the Bank did not have standing to commence the action. Although there is no specific time limit for seeking relief pursuant to CPLR 5015(a)(3), a party must move within a reasonable time (see Aames Capital Corp. v Davidsohn, 24 AD3d 474 [2d Dep't 2005]). Here, the homeowner waited over three years until the eve of the sale to move to vacate the default judgment. Indeed, it was only after the Referee raised her concerns about standing and the Bank moved to compel the sale that the homeowner sought any affirmative relief. In any event, the homeowner's allegations of fraud are broad and unsubstantiated (id.; see also Deutsche Bank v [*4]Hunter, 100 AD3d 810 [2d Dep't 2012] [record contains no evidence of fraud or misrepresentation and an alleged lack of standing is not a jurisdictional defect]). Consequently, that part of the homeowner's cross motion to vacate the default judgment is denied.

Even if the default judgment were vacated, that part of the cross motion for leave to serve a late answer would be denied. A defendant who has failed to timely answer the complaint must provide a reasonable excuse for the default and a meritorious defense to the action (see 2261 Palmer Ave. Corp. v Malick, 91 AD3d 853 [2d Dep't 2012]). Here, the homeowner can demonstrate neither. In support of the cross motion, the homeowner offers no excuse for his failure to answer the summons and complaint.^[FN2] Moreover, he fails to plead fraud with any particularity (see CPLR 3016[b] see also Davidsohn and Hunter, supra) and may not rely upon an affirmative defense that has been waived to establish a meritorious defense (see e.g. HSBC v Dammond, supra, 59 AD3d at 680; OneWestBank v Berry, 25 Misc 3d 1218[A] [Sup Ct, Suffolk County 2009]).

Accordingly, plaintiff's motion to compel is granted, and defendant's cross motion is denied in its entirely.

Order signed simultaneously herewith.

The Court read and considered the following documents upon

these applications:

PAGES NUMBERED

1.Notice of Motion.........................1-3

Affirmation-Mignardi................1-6

Affirmation-Mignardi................1-2

Affidavit-Milagros Rivera-Perez.....1-2

Exhibits............................A-I

2.Affirmation in Response-Baum.............1-3

Exhibits............................A-E

3.Notice of Cross-Motion...................1-2

Affidavit-Gilbert W. Beneway........1-2

Verified Answer with Counterclaims

Memorandum of Law...................1-6 [*5]

4.Reply Affirmation-Mignardi...............1-13

The foregoing constitutes the decision of the Court.

Dated:Poughkeepsie, New York

February 26, 2014

ENTER

HON. JAMES D. PAGONES, A.J.S.C.