District Judge Nicholas G. Garaufis


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In 2010 defendant defaulted on a mortgage securing a June 2007 loan of $392,800 from First Fin. Corp. As of assignee Avail Holding’s Dec. 11, 2015, foreclosure complaint under New York Real Property Actions and Proceedings Law (RPAPL), defendant owed $548,653.78. The court denied dismissal, rejecting defendant’s argument that it should abstain from exercising its diversity jurisdiction under principles outlined in Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, and Burford v. Sun Oil Corp., 310 U.S. 315. The state law issues were neither unclear nor particularly challenging. Moreover, the fact that New York has a comprehensive statutory framework to protect borrowers in residential foreclosure actions—including procedural safeguards within the state’s Foreclosure Prevention and Responsible Lending Act (FPRLA)—did not suggest that it was standard practice for federal district courts to defer to state courts in residential mortgage foreclosure actions, which are routinely adjudicated in federal court. Thus, district court determined that a federal court can adjudicate a New York residential foreclosure action provided there is diversity jurisdiction and the amount in controversy exceeds $75,000.