Firmly Affixed Allonges and First‑Hand Mailing Proof as Nonnegotiable Conditions Precedent in New York Foreclosures: Onewest Bank FSB v. Thomas

Introduction

In Onewest Bank FSB v. Thomas, 2025 NY Slip Op 05692 (Appellate Division, Second Department), the court reversed an order and judgment of foreclosure and sale and dismissed the foreclosure complaint as to the borrowers, Jaimon and Mary Thomas. The decision crystallizes two recurring and decisive requirements in New York mortgage foreclosure practice:

• The plaintiff must prove standing at commencement by showing it was the holder or assignee of the note, including that any allonge was “firmly affixed” to the note and properly executed/attached at or before commencement.
• The plaintiff must strictly comply with RPAPL 1304’s 90‑day pre‑foreclosure notice and with any contractual default notice provisions (here, paragraph 13 of the mortgage), with proof of actual mailings or detailed testimony from a witness with first‑hand knowledge of the standard mailing procedures of the entity that performed the mailings.

The case arises from a 2014 foreclosure action on a Yonkers property. After a nonjury trial in 2017, the Supreme Court (Westchester County) found for the bank on standing and notices, later granting an order of reference (June 16, 2023) and entering a judgment of foreclosure and sale (August 1, 2024). On appeal, the Second Department exercised its broad fact‑finding power after a bench trial to reach the opposite conclusion, holding that the record undermined the plaintiff’s proof on both standing and conditions precedent.

Summary of the Opinion

The Appellate Division reversed, “on the law and the facts,” denied the bank’s motions for an order of reference and to confirm the referee’s report and for a judgment of foreclosure and sale, and dismissed the complaint against the Thomases. The court held:

• Standing was not established. The plaintiff’s trial witness admitted the purported allonges with the original note were not stapled to the note and could not say when the allonges were executed or attached. Under UCC 3‑202(2), endorsements must be on the instrument or on a paper so firmly affixed as to become part of it. The record failed to show the plaintiff was the holder of the note at commencement.
• Strict compliance with RPAPL 1304 and the mortgage’s default notice clause (paragraph 13) was not proven. The plaintiff’s witness lacked knowledge of the mailing practices of the entity that sent the 90‑day (RPAPL 1304) and 30‑day default notices, and the admitted business records did not demonstrate the requisite certified and first‑class mailings (RPAPL 1304) or first‑class mailing/actual delivery of the contractual default notices.

Having found failures on these conditions precedent, the court ordered dismissal without reaching other arguments (including the borrowers’ abandonment argument under 22 NYCRR 202.48[b]).

Analysis

Precedents Cited and Their Influence

• U.S. Bank N.A. v. Kissi, 219 AD3d 1551 (2d Dept) — Cited for the standard of appellate review after a nonjury trial (“power as broad as that of the trial court”) and for core RPAPL 1304 principles: strict compliance; dual mailing (certified/registered and first‑class); and acceptable proof via actual mailing evidence or sworn testimony describing a standard office mailing procedure by a witness with personal knowledge. Kissi frames both the de novo factual reassessment the Appellate Division may undertake and the evidentiary threshold for 1304 proof.
• Deutsche Bank Natl. Trust Co. v. Bucicchia, 193 AD3d 682 (2d Dept) — Reinforces that strict compliance with RPAPL 1304 is a condition precedent, not a mere procedural nicety; reiterates acceptable forms of proof for mailing and rejects conclusory or hearsay‑laden showings. Bucicchia anchors the Second Department’s continued insistence on either concrete mailing artifacts or live testimony from someone with first‑hand knowledge of the specific mailing procedure used.
• U.S. Bank N.A. v. Muroff, 234 AD3d 1010 (2d Dept), and Hudson City Sav. Bank v. Ellia, 210 AD3d 750 (2d Dept) — These decisions establish that when standing is placed in issue by the defendant, the plaintiff must prove it was the holder or assignee of the note at commencement. They also connect standing to UCC requirements for endorsements and allonges. In Thomas, this line of authority made the plaintiff’s evidentiary lapses on the allonge dispositive.
• UCC 3‑202(2) — Quoted for the “firmly affixed” requirement governing endorsements made via allonges. The opinion uses witness testimony that the allonges were not stapled and that the timing of execution/attachment was unknown to find the requirement unmet, undercutting holder status at commencement.
• U.S. Bank N.A. v. Bochicchio, 179 AD3d 1133 (2d Dept) — Supports the principle that plaintiffs can prove RPAPL 1304 compliance either with direct proof of mailing (e.g., certified mail receipts) or through testimony on standard mailing practices from a qualified witness. Thomas applies Bochicchio to reject records and testimony lacking personal knowledge of the actual mailer’s procedures.
• Deutsche Bank Natl. Trust Co. v. Nelson, 183 AD3d 557 (2d Dept) — Emphasizes the need for a witness with personal knowledge of the mailing practices of the entity that conducted the mailings. In Thomas, the witness lacked knowledge of the third‑party/other entity’s procedures, rendering the 1304 proof insufficient.
• U.S. Bank Trust, N.A. v. Porter, 175 AD3d 530 (2d Dept) — Illustrates failure to prove mailing/default notices in accordance with contractual requirements, reinforcing that contractual notice provisions, like RPAPL 1304, are conditions precedent requiring strict proof.

Legal Reasoning

1) Standing hinged on “firmly affixed” allonges and timing at commencement

New York law requires a foreclosure plaintiff to be either the holder or assignee of the note at the time of commencement if standing is contested. Where endorsements are on an allonge, UCC 3‑202(2) demands the allonge be “firmly affixed” to the note. In practical terms, Second Department cases have treated physical affixation (often by stapling) and clear evidence of when and how the allonge was executed and attached as indispensable.

In Thomas, the bank’s own witness conceded two critical facts: the allonges accompanying the original note were not stapled to it; and the witness could not testify when the allonges were executed or attached. That testimony defeated the bank’s claim that it was the note’s holder at commencement. Without proof that the endorsements were made and firmly affixed at or before the action began, the plaintiff could not satisfy its burden on standing.

2) Strict compliance with RPAPL 1304 and the mortgage’s default notice clause

RPAPL 1304(1)–(2) requires that at least 90 days before commencing a foreclosure, the lender, assignee, or servicer must mail a prescribed notice to the borrower by both registered or certified mail and by first‑class mail to the borrower’s last known address. Strict compliance is a condition precedent; the plaintiff must prove it to obtain relief.

The court reiterated the accepted methods of proof: either documentary evidence of actual mailings (e.g., affidavits of mailing, return receipts) or testimony from a witness with personal knowledge of a standard office mailing procedure designed to ensure proper addressing and mailing, which was followed in the particular instance. Here, the plaintiff’s witness did not possess personal knowledge of the mailing practices of the entity that purportedly sent both the RPAPL 1304 notices and the paragraph 13 default notices. The business records received into evidence did not fill that gap; they did not demonstrate that certified and first‑class mailings actually were made, nor did they show first‑class mailing or actual delivery of the contractual default notices to the borrowers’ notice address.

The failure was twofold: statutory (RPAPL 1304) and contractual (paragraph 13). Because each constituted a condition precedent, deficiency on either independently required dismissal. The court emphasized that the trial record did not support the Supreme Court’s contrary findings after the 2017 nonjury trial.

3) Appellate fact‑finding after a bench trial

Invoking its broad power on appeal after a nonjury trial, the Second Department revisited the record and rendered the judgment warranted by the facts. While deference to the trial court’s witness credibility determinations remains in “close cases,” the admissions here (unstapled allonges; uncertainty about execution/attachment; lack of knowledge of the mailer’s procedures) were dispositive and documentary in nature. Consequently, the Appellate Division reversed not just the judgment but also the underlying orders granting an order of reference and appointing a referee, and it dismissed the complaint as to the borrowers.

Impact

A. Standing: Allonge handling and testimony must be meticulous

• Physical affixation matters. Loose or unattached allonges, or uncertainty about when they were attached, will defeat holder status. Keeping the original note with permanently affixed allonges, and documenting the chain of endorsements and the timing, is critical.
• Trial witnesses must be able to speak to how and when endorsements were made and affixed. Lapses in personal knowledge or equivocal testimony invite dismissal on standing.

B. RPAPL 1304: Vendor mailings require a witness with first‑hand knowledge

• If notices are mailed by a servicer or a third‑party vendor, plaintiffs must present either concrete mailing artifacts (e.g., USPS receipts, signatures) or a witness with personal knowledge of the mailer’s standard procedures and their application to the specific notices.
• Generic servicing records or conclusory affidavits lacking personal knowledge of the mailer’s practices are insufficient. This decision continues the Second Department’s insistence on strict compliance and robust evidentiary foundations.

C. Contractual default notices: Separately fatal if not proven

• Paragraph 13‑type default notices are independent conditions precedent to acceleration. Proof must show mailing by first‑class or actual delivery to the borrower’s notice address per the mortgage terms.
• RPAPL 1304 compliance does not cure contractual noncompliance; both must be proven.

D. Procedural posture and remedies

• The Second Department’s willingness to reverse “on the law and the facts” after a bench trial and to dismiss the complaint underscores that defects in standing and notice cannot be papered over post‑trial by orders of reference or referee reports.
• For plaintiffs, the ruling incentivizes airtight evidentiary preparation before trial. For borrowers, it confirms the continued viability of cross‑examination aimed at the plaintiff’s proof of standing and notice.

Complex Concepts Simplified

• Standing in foreclosure: The plaintiff must show it held or was assigned the note when it filed suit. Without standing, the court cannot grant foreclosure relief.
• Allonge: A separate sheet used for endorsements when there is no space on the note. It must be “firmly affixed” to the note (e.g., stapled) so it effectively becomes part of the instrument. Timing matters: the affixation and endorsement must predate or coincide with the lawsuit’s commencement.
• RPAPL 1304: A New York statute requiring lenders/servicers to send a specific 90‑day pre‑foreclosure notice by both certified/registered and first‑class mail to the borrower’s last known address before filing foreclosure. The statute must be strictly followed.
• Contractual default notice (paragraph 13): Many mortgages require a separate notice of default (often 30 days to cure) mailed by first‑class or actually delivered before acceleration. This is a contract‑based condition precedent distinct from RPAPL 1304.
• Proof of mailing: Shown by either actual mailing evidence (e.g., USPS receipts, signed return cards) or testimony from a witness with personal knowledge describing a standard office mailing procedure used for the specific notices. The witness must know the mailer’s processes; hearsay about a third‑party’s process is not enough.
• Order of reference: A court order appointing a referee to compute the amount due after liability is established. It is inappropriate if standing or conditions precedent are not proven.
• Nonjury (bench) trial appellate review: The Appellate Division can independently assess the facts and render a judgment, giving some deference to the trial court’s credibility findings in close cases.
• 22 NYCRR 202.48(b) abandonment: A rule that can deem an order/judgment abandoned if not timely submitted, potentially leading to dismissal. In this case, the appellate court did not need to reach that issue due to dismissal on other grounds.

Conclusion

Onewest Bank FSB v. Thomas fortifies two pillars of New York foreclosure jurisprudence in the Second Department. First, standing must be proven with precision: endorsements via allonges must be firmly affixed, and the plaintiff must demonstrate it was the note holder or assignee at commencement. Vague or adverse testimony about how and when allonges were attached is fatal. Second, strict compliance with RPAPL 1304 and strict adherence to contractual default notice provisions are genuine conditions precedent; plaintiffs must offer either concrete mailing evidence or testimony from a witness with first‑hand knowledge of the mailer’s standardized process and its application to the notices at issue.

By reversing on the law and the facts and dismissing the complaint, the Second Department sends a clear message: foreclosure plaintiffs must come to trial with original, properly affixed loan documents and robust, first‑hand mailing proof that satisfies both statutory and contractual notice requirements. Borrowers who timely raise standing and notice defenses can prevail where the record falls short. The decision will shape litigation strategy on both sides, prompting more rigorous document custody practices and evidentiary preparation by lenders, and continued focused challenges by borrowers on these determinative threshold requirements.