On May 6, 2026, the Second Department issued a decision in Federal Natl. Mtge. Assn. v. McDonald, 2026 NY Slip Op. 02826, holding that a referee erred in relying on testimony summarizing documents that were not in evidence, explaining:
The Supreme Court should have denied those branches of the plaintiff’s motion which were to confirm the referee’s report and for a judgment of foreclosure and sale. 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. However, the referee’s findings and recommendations are advisory only and have no binding effect on the court, which remains the ultimate arbiter of the dispute. Computations based upon a review of unidentified and unproduced business records constitute inadmissible hearsay and lack probative value.
Here, the referee relied on an affidavit of an assistant vice president of Rushmore Loan Management Services, LLC, an alleged assignee of the plaintiff’s assignee. As the defendant correctly contends, the computations contained in the affidavit were based upon a review of unidentified and unproduced business records and, consequently, constituted inadmissible hearsay and lacked probative value. Thus, the findings contained in the referee’s report were not substantially supported by the record.
(Internal quotations and citations omitted).