MEMORANDUM AND ORDER Plaintiff U.S. Bank National Association (“plaintiff” or “U.S. Bank”), in its capacity as Trustee for the RMAC Trust, Series 2016-CTT, brings this diversity action against defendants Rohit Nanan (“Nanan”) and the New York City Environmental Control Board (the “Control Board”) (collectively, “defendants”), seeking to foreclose a mortgage encumbering real property located at 129-19 145th Street, Jamaica, New York 11436, together with the land, buildings, and other improvements located thereupon (the “Subject Property”). See generally Complaint (Feb. 17, 2020) (“Compl.”), Electronic Case Filing (“ECF”) Docket Entry (“DE”) #1. Currently pending before this Court, on a referral from the Honorable Rachel P. Kovner, is plaintiff’s motion for default judgment against Nanan and the Control Board.1 See generally Order Referring Motion (Apr. 8, 2022) (“4/8/22 Referral Order”); Motion for Default Judgment (Apr. 7, 2022) (“Pl. Mot.”), DE #19; [Corrective] Memorandum in Support of Motion for Default Judgment (Apr. 7, 2022) (“Pl. Mem.”), DE #23.2 Plaintiff requests, amongst other things, that the Court enter a judgment of foreclosure and sale with respect to the Subject Property, pursuant to New York Real Property and Proceeding Law (“RPAPL”) §§1351 and 1354, and award plaintiff $490,687.45 in damages, plus contractual interest at the rate of 3.0 percent per annum until entry of judgment, and post-judgment interest at the statutory rate thereafter. See Statement of Damages (Apr. 7, 2022) at 1-2, DE #21-11; see generally Proposed Judgment (Apr. 7, 2022), DE #21-12. For the reasons that follow, plaintiff’s motion for default judgment is denied without prejudice. See, e.g., Zuniga v. Newmark Wood Working Grp. Inc., 20 Civ. 2464 (RPK) (VMS), 2022 WL 3446331, at *4 n.1 (E.D.N.Y. Aug. 17, 2022) (“Because this Court concludes that the motion for default judgment should be denied without prejudice and with leave to [refile], the disposition of this motion is not dispositive of any party’s claim or defense. The Court thus proceeds by Order rather than by Report and Recommendation.”) (citing 28 U.S.C. §636(b); Fed. R. Civ. P. 72(a)); accord Sudilovskiy v. City WAV Corp., 22-CV-469 (DG), 2022 WL 4586307, at *1 (E.D.N.Y. Sept. 29, 2022). FACTUAL BACKGROUND On July 14, 2006, Nanan executed and delivered to Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for SunTrust Mortgage, Inc. (“SunTrust”), a promissory note in the amount of $403,000 (the “July 14, 2006 Note”). See Declaration of Stephen J. Vargas, Counsel to Plaintiff (docketed on Apr. 7, 2022) (“Vargas Decl.”) 3, DE #21; see also Exhibit A to Consolidation, Extension, and Modification Agreement (“CEMA”) (docketed on Apr. 7, 2022), DE #21-7 at 333 (listing Nanan promissory notes and mortgages, including those dated July 14, 2006). To secure repayment of the July 14, 2006 Note, Nanan executed and delivered a mortgage on the Subject Property in the amount of $403,000 (the “July 14, 2006 Mortgage”). See Vargas Decl. 3, DE #21; Compl. 10. The July 14, 2006 Mortgage was recorded on August 2, 2006 in the City Register of the City of New York, Queens County, under CRFN 2006000436586. See Compl. 10. Approximately one year later, on June 22, 2007, Nanan executed and delivered a second promissory note to MERS (as SunTrust’s nominee) in the amount of $14,000. See Vargas Decl. 4, DE #21; see also CEMA Ex. A, DE #21-7 at 33. On the same date, Nanan executed and delivered a second mortgage in the same amount as the second promissory note (the “June 22, 2007 Mortgage”). See Compl. 11. This mortgage was recorded in the City Register of the City of New York, Queens County, on July 11, 2007, under CRFN 2007000352891. See id. On June 22, 2007, pursuant to a consolidation, extension, and modification agreement (the “CEMA”), Nanan also executed and delivered a consolidated note to SunTrust’s nominee, MERS, in the principal aggregate amount of $417,000, with interest to accrue at 6.5 percent per annum (the “Consolidated Note”). See Interest-Only Period Adjustable Rate Note (docketed on Apr. 7, 2022) (“Consolidated Note”), DE #21-7 at 8-13; CEMA, DE #21-7 at 28-68; Compl. 9. In addition to consolidating Nanan’s two original promissory notes, the CEMA also consolidated the July 14, 2006 Mortgage and the June 22, 2007 Mortgage (the “Consolidated Mortgage”). See CEMA, DE #21-7 at 28-68; Compl. 12. This agreement resulted in a single debt instrument and lien in the principal amount of $417,000. See Compl. 12. The CEMA, together with the Consolidated Note and the Consolidated Mortgage, was recorded in the City Register of the City of New York, Queens County, on July 11, 2007, under CRFN 2007000352892. See id. Thereafter, a series of assignments of the Consolidated Mortgage occurred, with a final assignment on March 26, 2019, making U.S. Bank the assignee. See Affidavit of Mario Selva, Assistant Vice President of Rushmore Loan Management Services LLC4 (docketed on Apr. 7, 2022) (“Selva Aff.”) 5, DE #21-7 at 2.5 Meanwhile, on July 15, 2018,6 Nanan executed and delivered a modification agreement to PennyMac, modifying the CEMA, the Consolidated Note, and Consolidated Mortgage (the “Modification Agreement”). See Modification Agreement (docketed on Apr. 7, 2022), DE #21-7 at 15-24. Under the terms of the Modification Agreement, the new principal balance owed by Nanan was $474,316.92. See id. at 17. The Modification Agreement further provided that only $299,374.02 of this new principal balance would accrue interest, at a dynamic rate, as set forth in the interest schedule therein; the remaining balance amount of $174,942.90 was to be treated as deferred and, accordingly, would not accrue interest. See id. Plaintiff alleges that on November 21, 2018, an unidentified “prior servicer advanced $1,346.79 and increased the modified [non-interest-bearing] principal balance by this amount to $176,289.69.” Selva Aff. 6, DE #21-7 at 2. According to the Complaint, after U.S. Bank was assigned the operative mortgage, Nanan defaulted on his financial obligations under the Modification Agreement by failing to make the required installment payment on April 1, 2019, as well as subsequent payments. See Compl. 18. Following his default on the loan (and the commencement of this action), Nanan reportedly made certain additional payments, but these were ultimately insufficient to cure his default and/or reinstate the loan. See Selva Aff. 12, DE #21-7 at 3. U.S. Bank is in possession of the Promissory Note dated June 22, 2007, and was in possession of that Note when it commenced this foreclosure action on February 17, 2020. See id.
