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CaseIQ

CHASE MANHATTAN BANK v. BECKERMAN

Appellate Division of the Supreme Court of New York, Second Department.

Apr 3, 2000

Judgment

Subsequent
References

CaseIQ

DECISION ORDER

ORDERED that the order dated August 25, 1998, is affirmed; and it is further,

ORDERED that the order dated November 16, 1998, is affirmed insofar as appealed from; and it is further,

ORDERED that the respondent is awarded one bill of costs.

Oxford Mortgage Corp. entered into a residential loan agreement with the appellants pursuant to which the debt was secured by a second mortgage on certain real property owned by the appellants in Jamaica, New York. Pursuant to the terms of the second mortgage agreement, the appellants agreed to pay an annual interest rate of 16.9%. This second mortgage was assigned to the plaintiff, and upon the appellants' default on the loan payments, the plaintiff commenced this mortgage foreclosure action. The appellants moved to dismiss the complaint on the ground that it failed to state a cause of action. Specifically, the appellants alleged that the disclosure of a 16.9% interest rate rendered the complaint usurious on its face, and that the plaintiff's failure to plead an exemption rendered the complaint defective. The appellants also served a demand pursuant to CPLR 322(a) for evidence that the plaintiff's counsel was authorized to prosecute the action.

A mortgage banker may make a loan secured by a mortgage on residential real property which is not a first lien at a rate agreed upon by the mortgage banker and the borrower, subject to such regulations as the banking board may prescribe (see, Banking Law § 590-a[1]; see also, 3 NYCRR 80.8; River Bank Am. v. Gatov, 203 A.D.2d 548, cert denied, 514 U.S. 1055 ). Here, the appellants agreed to pay annual interest at a rate of 16.9%, and then defaulted in making those payments. Thus, the plaintiff pleaded a prima facie case in its complaint and the motion to dismiss was properly denied.

The plaintiff's counsel sufficiently established that he was authorized to prosecute this action by sending a copy of a letter signed by the vice-president of the plaintiff's servicing agent indicating that he had that authority.