But the appeals court wasn’t convinced.
The problem? The referee’s findings relied heavily on an affidavit from a Nationstar employee who said she had personal knowledge of the amount owed—knowledge she claimed came from reviewing Nationstar’s business records. But the court noted that simply reviewing internal documents doesn’t equal firsthand knowledge. More importantly, the payment history used by the referee dated back to 2009, even though Nationstar didn’t acquire the loan until 2013.
That distinction mattered. The Appellate Division ruled that Nationstar failed to establish a proper foundation for the admission of payment records from before it acquired the note. The employee who submitted the affidavit didn’t show she had any familiarity with the original lender’s business practices or how those earlier records were maintained.
Without reliable support for the full payment history, the court concluded that the referee’s report wasn’t backed by sufficient evidence. It reversed the trial court’s judgment, denied Nationstar’s motion to confirm the referee’s findings, and effectively halted the foreclosure.
While the decision turned on procedural evidence rules, the message for mortgage professionals is straightforward. When servicing rights transfer, courts still expect clear and legally acceptable documentation. Affidavits must be based on direct knowledge or be supported by properly introduced business records—especially if those records come from a prior lender.