Can You Challenge a Foreclosure Referee's Math in New York? Lessons From Prestia

By the time a New York foreclosure reaches the referee, standing and default have been decided. What remains is a number: the amount the bank says is due, computed by a referee and confirmed by a judge. Most homeowners treat that number as arithmetic and let it pass. It is evidence, and evidence can fail.

On July 29, 2026, the Appellate Division, Second Department, reversed a Suffolk County judgment of foreclosure and sale because the referee’s figures rested on records nobody put in front of the court. The case is Bank of N.Y. Mellon v Prestia, 2026 NY Slip Op 04735, 251 AD3d 993 (2d Dept July 29, 2026). The borrowers did not defeat the foreclosure; they won a recomputation.

Take a homeowner in Massapequa at the same point. The bank’s motion to confirm the referee’s report arrives with a line for advances of taxes and insurance he does not recognize, because he paid one school tax bill himself at the Town of Oyster Bay receiver of taxes the year the escrow balance did not cover the bill. The receipt is in a kitchen drawer, and our Long Island foreclosure defense practice starts there.

What the Prestia borrowers lost, and what they won

The Prestia borrowers lost every issue but one, and the one they won sent the case back to Supreme Court, Suffolk County, before Justice Thomas F. Whelan, for a new number. The dates matter.

Bank of New York Mellon sued in November 2012 to foreclose a mortgage on a property in Nissequogue. Monica Prestia and John Prestia answered and pleaded lack of standing, among other defenses. The bank moved for summary judgment and an order of reference in November 2014; the borrowers cross-moved to dismiss. By orders dated April 17, 2017 and May 26, 2017, the court granted the bank’s motion, denied the cross-motion and referred the matter to a referee to compute the amount due.

A motion for leave to renew, made in August 2017, was denied on September 20, 2017, because the letter offered as a new fact had been before the court on the original motion. CPLR 2221(e)(2). In November 2017 the bank moved to confirm the referee’s report and for a judgment of foreclosure and sale; the borrowers cross-moved to reject the report and to direct a hearing before the referee. The court granted the bank’s motion and denied the cross-motion on February 2, 2018, and entered the judgment of foreclosure and sale on February 14, 2018. The appeal was decided on July 29, 2026.

Standing went to the bank: it showed physical possession of the note, endorsed in blank, when the action was commenced, and no triable issue of fact was raised against that showing. The bank’s prima facie showing of default was likewise unrebutted. The hearsay objection to the servicer affidavits was refused because it was raised for the first time on appeal.

They won on the report. The referee had written that “[t]he information contained herein was obtained from the books and records of plaintiff pertaining to the defendants’ loan and payment history.” The record did not show those books and records annexed to an affidavit of an officer of the former loan servicer. The computations for advances of taxes and insurance therefore rested on unidentified and unproduced business records: inadmissible hearsay with no probative value. The Second Department reversed the judgment, with costs, rejected the report, and remitted for a new report, further proceedings under CPLR 4403, and an amended judgment.

The foreclosure is alive. The bank is still the plaintiff, with standing and a proven default. What changed is that the number has to be built again, on records the court can read.

Every line of the report needs a record behind it

A referee’s report is a set of factual claims, and each one needs a record the court can read. RPAPL 1321(1) describes the job: the court “shall ascertain and determine the amount due, or direct a referee to compute the amount due to the plaintiff.” The statute is written for defaults and admissions; in a contested case like Prestia the reference comes with the summary judgment order. The same subdivision requires the order of reference for a one- to four-family residential property to include the name and telephone number of the mortgage servicer. Write them down.

The computation has four parts in the usual case; Prestia speaks of the “loan and payment history” and of “advances of taxes and insurance.” The card below names the record each line needs.

The standard for confirmation is settled. “The report of a referee should be confirmed whenever the findings are substantially supported by the record, and the referee has clearly defined the issues and resolved matters of credibility.” Real Estate Mtge. Network, Inc. v Mason, 217 AD3d 796, 797 (2023), quoted in Prestia. Prestia states the limit in one sentence, citing TLOA Mtge., LLC v 109-08 N. Blvd, LLC, 241 AD3d 963, 964 (2025), and Mason, 217 AD3d at 798: “[C]omputations based upon a review of unidentified and unproduced business records constitute inadmissible hearsay and lack probative value.”

Here is what that means. A referee is not a witness. A referee’s statement that the figures came from the bank’s books is a description of records, not the records. CPLR 4518(a) admits the record itself on a proper foundation; under Prestia, a witness’s account of what the record contains is hearsay. It is incumbent upon the plaintiff to put the records themselves before the court. See our earlier note on business records in foreclosure cases.

Why fight over the number? At the sale, the officer pays the expenses of the sale, then pays the plaintiff “the amount of the debt, interest and costs, or so much as the proceeds will pay,” and “[a]ll surplus moneys arising from the sale shall be paid into court.” RPAPL 1354(1), (4). The bank is paid before any surplus exists; therefore, every unsupported dollar in the report is money out of the homeowner’s share of the sale.

How to object: the motion to reject the report

The objection is a motion to the judge, due fifteen days after the report is filed, and the evidence goes in with the papers. The text of CPLR 4403 that runs the motion is two sentences long. “Upon the motion of any party or on his own initiative, the judge required to decide the issue may confirm or reject, in whole or in part, the verdict of an advisory jury or the report of a referee to report; may make new findings with or without taking additional testimony; and may order a new trial or hearing. The motion shall be made within fifteen days after the verdict or the filing of the report and prior to further trial in the action.”

The judge may reject “in whole or in part”; the Prestia borrowers won on the advances for taxes and insurance alone.

The papers demand the payment history the referee relied on, produced as a business record rather than summarized inside an affidavit, and the escrow disbursement ledger behind every advance.

Ask for a hearing under CPLR 4313, and understand its limits. The rule directs that, unless the order of reference says otherwise, “the referee shall forthwith notify the parties of a time and place for the first hearing to be held within twenty days after the date of the order.” When no hearing is held, the Second Department’s answer: “[a]s long as a defendant is not prejudiced by the inability to submit evidence directly to the referee, a referee’s failure to notify a defendant and hold a hearing is not, by itself, a basis to reverse a judgment of foreclosure and sale.” U.S. Bank N.A. v Glasgow, 218 AD3d 717, 720 (2023), quoted in Prestia. The Prestia borrowers were not prejudiced because, in opposing confirmation, they “had an opportunity to raise questions and submit evidence directly to the Supreme Court.” Bank of Am., N.A. v Scher, 205 AD3d 989, 990 (2022).

Consequently, the motion to reject is your hearing, and in my experience that is where these motions are lost.

Do not send in a request for a hearing with nothing behind it. Pull every payment you made, from your own bank statements, not from the servicer’s summary. Pull the tax receipts and the declarations page of the policy you paid for. Put your column next to the referee’s column and mark every line where the two do not match. If you cannot put a number of your own in front of the judge, that reads as no prejudice, and the motion is lost on paper.

Taxes and insurance are where the numbers are weakest

The Prestia borrowers won on taxes and insurance for a reason. Principal and interest follow from the note and the payment history. An advance is a different kind of claim: the servicer says it paid a third party, a town receiver of taxes or an insurance carrier, on a specific date in a specific amount because the escrow account could not cover it. That claim lives in a disbursement ledger, and the ledger has to be produced.

Check the advances against sources the bank does not control: the town receiver of taxes knows who paid and when, and the insurance carrier knows what premiums it received. The Massapequa homeowner’s receipt is that kind of source: if the report carries an advance for the school tax he paid himself, the receipt goes in the motion next to the referee’s line, date against date and amount against amount. Indeed, one receipt that contradicts one advance does more for the motion than a page of argument about the report as a whole.

What a win gets you, and what does not work

A win looks like Prestia: a rejected report, a reversed judgment, and a new report followed by an amended judgment. If the new report, built on produced records, comes in lower, the amended judgment is smaller, and that means more surplus after a sale or less to satisfy the debt. A win also buys time. In my experience that time is worth the most when a modification or a sale by the owner is under discussion, because the records the bank must now produce are the ones you need to test any offer.

Do not spend the confirmation motion re-arguing standing; once the bank has shown the note endorsed in blank at commencement, that issue is decided. If the six-year clock has run, that argument ends the case instead of restating the number; see our post on whether a bank letter can restart the foreclosure clock under FAPA. A pre-foreclosure notice defense under RPAPL 1304 has its own rules; see an earlier note on pre-foreclosure notice violations. Consequently, the motion to reject is one defense among several; read the file for the others before the fifteen days run.

Bring these to the first call

• The referee’s report and the date it was filed.
• The bank’s motion to confirm, with every affidavit and exhibit attached.
• The order of reference, which names the servicer.
• Your own payment records, tax receipts and the declarations page of your insurance policy.
• Any loan modification application or offer, signed or not.

Sources

• Bank of N.Y. Mellon v Prestia, 2026 NY Slip Op 04735, 251 AD3d 993 (2d Dept July 29, 2026): nycourts.gov
• CPLR 4403, motion to confirm or reject a referee’s report: nysenate.gov
• CPLR 4313, the referee’s hearing notice: nysenate.gov
• CPLR 4518, business records: nysenate.gov
• RPAPL 1321, computing the amount due: nysenate.gov
• RPAPL 1354, distribution of sale proceeds: nysenate.gov

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The Massapequa homeowner’s motion is short: the referee’s advances line next to his receipt from the Town of Oyster Bay receiver of taxes, and his own bank statements against the payment history the bank has to produce, filed with the judge inside the fifteen days. That is what the Prestia borrowers won. Our Long Island foreclosure defense practice reads the report against the records behind it before the motion goes in.

If a motion to confirm a referee’s report has arrived in your Nassau or Suffolk foreclosure, call (516) 750-0595 with the referee’s report and the date it was filed; the fifteen days run from that date. Request a review before they run.