The court further finds and concludes that the amount of the deficiency judgment represents the remaining debt to Plaintiffs and the remaining insurable interest of Plaintiffs (after the mortgage debt was partially extinguished by the foreclosure sale). See Fireman's Fund Mortgage Corporation v. Allstate Insurance Company, 838 P.2d 790 (Alaska 1992); Kessler v. Government Employees Insurance Company, 1779 A.2d 492 [ 179 A.D.2d 492, 579 N.Y.S.2d 13] (N.Y. 1992); Universal Mortg. Co. Inc. v. Prudential Ins. Co., 799 F.2d [458] 461 (9th Cir. 1986) and Altus Bank v. State Farm Fire Cas. Co., 758 F. Supp. 567 (C.D.Cal. 1991). FHLMC's reliance on City of Chicago v. Maynur, 28 Ill. App.3d 751, 329 N.E.2d 312 (Ill. App.Ct. 1975) is misplaced.

In this action arising from plaintiff's purchase of real estate at a foreclosure sale, the only basis for plaintiff's claim of entitlement to insurance proceeds paid to the previous owners of the home who cashed the insurance checks but failed to use the money to repair fire damage to the property, is pursuant to a paragraph of a mortgage entitled “Borrower's Obligation to Maintain Hazard Insurance or Property Insurance.” However, bidding at a foreclosure sale and taking title generally terminates “the mortgagee's insurable interest as a mortgagee” ( Whitestone Sav. & Loan Assn. v. Allstate Ins. Co., 28 N.Y.2d 332, 334, 321 N.Y.S.2d 862, 270 N.E.2d 694 [1971]; see Kessler v. Government Empls. Ins. Co., 179 A.D.2d 492, 493, 579 N.Y.S.2d 13 [1992]; Cohen v. New York Prop. Ins. Underwriting Assn., 160 A.D.2d 287, 288, 554 N.Y.S.2d 477 [1990] ).

Senior mortgagees that purchase the premises for an amount that encompasses the debt owed to them are deemed to have satisfied their mortgages ( see Whitestone Sav. Loan Assn. v. Allstate Ins. Co., 28 NY2d 332; Kessler v. Government Empls. Ins. Co., 179 AD2d 492). In contrast, here, Bank One's subordinate mortgage was not satisfied when it purchased the premises, as the proceeds of the sale satisfied only Washington Mutual's senior mortgage, taxes, and fees, with the remaining funds deposited with the Suffolk County Treasurer.

Because "`only a person with rights in the instrument may claim conversion'" under UCC 3-419 (State of New York v. Barclays Bank of N.Y., 76 N.Y.2d 533, 537, quoting Bailey, Brady on Bank Checks § 27.8, at 27-23), the termination of plaintiff's interest in the insurance proceeds concomitantly terminates his rights in the check and is fatal to the cause of action against Citibank and Shawmut. With regard to plaintiff's claim to an equitable interest in the insurance proceeds, that interest was extinguished by foreclosure coupled with his failure to obtain a deficiency judgment against the mortgagor (see, Kessler v. Government Empls. Ins. Co., 179 A.D.2d 492). Mercure, Yesawich Jr. and Peters, JJ., concur.

It only ostensibly became an intervening lien when Citibank's assignor lost the race to the recording office. "Because the debt [was] extinguished it is not necessary or useful to refer to 'attenuated traditional concepts to the effect that when the mortgagee acquires the title to the property there is a merger of the mortgage interest into that of the fee'" (Kesslerv Government Employees Ins. Co., 179 A.D.2d 492, 493 [1st Dept 1992][citations omitted]). To the extent Citibank raises the Spector of strict foreclosure or re-foreclosure as analogous support for its counterclaims, those causes of action were not pled.