Synchronizing Compliance: Deutsche Bank v. Goetz Establishes a Zero-Tolerance Timeline for RPAPL 1304 & 1306 in New York Foreclosures

Introduction

On 25 June 2025, the Appellate Division, Second Department, handed down its decision in Deutsche Bank National Trust Company v. Goetz, reversing a foreclosure and sale order because the lender failed to strictly comply with the dual notice and filing requirements set out in Real Property Actions and Proceedings Law (RPAPL) §§ 1304 and 1306.

The case arose from a 2012 mortgage foreclosure action involving the defendant-homeowner, Stephen Goetz, and Deutsche Bank National Trust Company (acting as trustee for a securitized trust) as plaintiff. At the trial level, Deutsche Bank secured summary judgment, an order of reference, and ultimately a judgment of foreclosure and sale. Goetz appealed, arguing that the bank did not strictly adhere to statutory pre-filing conditions designed to give borrowers timely notice and an opportunity to seek assistance.

The Second Department sided with Goetz, reiterating and refining the contours of compliance obligations for mortgagees. Most notably, the Court declared that (1) the 90-day pre-foreclosure notice (RPAPL 1304) must strictly meet both content and mailing-procedure requirements, and (2) the lender’s electronic filing with the New York State Department of Financial Services (DFS) under RPAPL 1306 must occur within three business days of mailing the 1304 notice— not, as here, 17 days later. Non-compliance with either statute remains a condition precedent to commencing foreclosure and is fatal to the action when raised and proven by the borrower.

Summary of the Judgment

The Second Department reversed the order and judgment of foreclosure and sale.
The plaintiff’s motion for summary judgment, dismissal of Goetz’s affirmative defenses, and order of reference were denied.
Goetz’s cross-motion for summary judgment dismissing the complaint was granted.
The Court awarded costs to Goetz.
The decision rests on two independent bases:
1. Lack of proof of strict compliance with the mailing procedure and content required by RPAPL 1304.
2. Undisputed failure to file the RPAPL 1306 notice with DFS within three business days of mailing the RPAPL 1304 notice.

Analysis

Precedents Cited

The Court’s opinion weaves together a line of recent decisions emphasizing “strict compliance” with RPAPL 1304/1306:

U.S. Bank N.A. v. Nahum, 232 A.D.3d 715 (2023) – Reaffirmed strict compliance with RPAPL 1304 as a condition precedent.
Deutsche Bank Natl. Trust Co. v. Palomaria, 230 A.D.3d 1109 (2023) – Clarified burden of proof for mailing notices.
Citibank, N.A. v. Conti-Scheurer, 172 A.D.3d 17 (2019) – Established that proof of a standard office mailing procedure, or actual mailing receipts, is necessary.
U.S. Bank N.A. v. Pickering-Robinson, 197 A.D.3d 757 (2021) – Stressed affidavits must show personal knowledge of mailing processes.
HSBC Bank USA, N.A. v. Bermudez, 175 A.D.3d 667 (2019); Deutsche Bank Natl. Trust Co. v. Spanos, 180 A.D.3d 997 (2020) – Both confirm that RPAPL 1306 electronic filing is likewise a condition precedent.
TD Bank, N.A. v. Leroy, 121 A.D.3d 1256 (2014) – Early articulation of the three-business-day requirement for RPAPL 1306 filings.

By relying on and synthesizing these cases, the Second Department fortified a cohesive rule: lenders must prove—with admissible evidence—both timely statutory notice to borrowers (RPAPL 1304) and timely reporting to DFS (RPAPL 1306).

Legal Reasoning

Strict Compliance as Condition Precedent.
The Court reiterated that RPAPL 1304 and 1306 are not mere procedural niceties but substantive prerequisites to suit. If a plaintiff fails to prove compliance, the foreclosure action cannot stand, regardless of any equitable considerations.
Deficiencies in RPAPL 1304 Proof.
- The bank relied on an affidavit from Allen Karee Lowery (Wells Fargo’s VP of loan documentation). The affidavit referenced a “standard office mailing procedure,” but did not explain the steps, fail-safe measures, or Lowery’s personal knowledge of them.
- No authenticated copies of USPS certificates of mailing, tracking logs, or returned “green cards” (certified mail receipts) were annexed.
- The 90-day notice itself omitted a list of five regional housing counseling agencies—a mandatory content element in effect at the time of mailing.
Violation of RPAPL 1306 Timing.
Electronic filing with DFS occurred 17 days—and not within three business days—after the purported mailing of the RPAPL 1304 notice. The statute’s language (“shall file within three business days”) is unequivocal. The Court treated the timing lapse as dispositive, independent of other defects.
Summary Judgment Mechanics.
Because the plaintiff’s proofs were deficient, its motion for summary judgment failed prima facie, obligating the trial court to deny the motion “without regard to the sufficiency of the opposition papers” (Winegrad v. NYU Med. Ctr., 64 N.Y.2d 851 [1985]). By contrast, the defendant’s cross-motion did establish—through undisputed facts—the timing violation under RPAPL 1306, warranting dismissal.

Impact on Future Litigation

The decision crystalizes several operational guardrails for lenders, servicers, and their counsel:

Zero-Tolerance Timing: The three-business-day window in RPAPL 1306 is strict. Courts will not allow “substantial compliance” or harmless-error arguments.
Affidavit Specificity: Generic boilerplate affidavits will not suffice. The affiant must (i) explain mailing steps in detail and (ii) possess personal knowledge of those steps. Servicers should expect to attach mailing logs, USPS proofs, or vendor attestations.
Content Audit: Even if notices are timely mailed, their text must mirror statutory language in effect on the date of mailing, including the then-required list of five local housing counseling agencies.
Litigation Strategy: Borrowers now have a strengthened pathway to obtain outright dismissal, rather than mere denial of summary judgment, by spotlighting RPAPL 1306 timing errors.
Compliance Infrastructure: The banking industry may need to integrate automated “notice + DFS-file” workflows to eliminate temporal gaps.

Complex Concepts Simplified

RPAPL 1304 (90-Day Notice): A New York statute requiring lenders to send borrowers a ninety-day pre-foreclosure warning letter via registered or certified mail and first-class mail. The letter must encourage borrowers to consult housing counselors, list five regional counseling agencies, and provide workout options.
RPAPL 1306 (DFS Filing): Requires lenders, within three business days of mailing the RPAPL 1304 notice, to electronically file key borrower and loan information with the New York State Department of Financial Services. This enables DFS to oversee foreclosure trends and connect homeowners with resources.
Order of Reference: An interim order appointing a referee to compute the outstanding mortgage balance. If the order is later vacated (as here), any subsequent judgment of foreclosure based on the referee’s report must also fall.
Condition Precedent: A legal requirement that must be satisfied before a lawsuit can be validly commenced. Failure to meet a condition precedent renders the action defective and subject to dismissal.
Strict vs. Substantial Compliance: “Strict compliance” means exact adherence to statutory mandates; “substantial compliance” allows minor deviations. The Second Department confirmed that RPAPL 1304/1306 demand the former, not the latter.

Conclusion

Deutsche Bank v. Goetz cements a stringent, synchronized compliance regime in New York foreclosure law: lenders must mail a statutorily perfect 90-day notice and file the corresponding information with DFS within three business days. Deviations in either timing or content can—and now likely will—lead to the dismissal of foreclosure actions at the summary-judgment stage.

Beyond safeguarding borrowers’ rights, the decision signals to financial institutions that vigilance in documentation and workflow integration is no longer optional. In practical terms, the case re-balances litigation leverage, empowering homeowners to wield procedural safeguards as substantive defenses. As appellate precedent, the ruling will reverberate through trial courts across the state, shaping how future foreclosure actions are pled, proven, and defended.