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Parker Ibrahim & Berg, LLP, attorneys for respondent (Charles W. Miller, III, Ben Zev Raindorf and Nathania Reyes, on the brief).
Before Judges Accurso and Vernoia.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
PER CURIAM.
In this residential mortgage foreclosure action, defendant Walter A. Walker, Sr., appeals from a September 22, 2017 order granting plaintiff Wells Fargo Bank, N.A.[1] summary judgment and striking defendant's answer, an April 27, 2018 order denying defendant's motion to fix the amount due, and an April 30, 2018 order granting final judgment to plaintiff. Finding no merit to defendant's arguments, we affirm.
In October 2006, Mary Yaccarino[2] borrowed $247,500 from Countrywide Bank, N.A. Yaccarino signed a promissory note in that amount in Countrywide's favor. To secure the loan, Yaccarino and defendant executed an October 16, 2006 mortgage on property in Mays Landing to Mortgage Electronic Registration Systems, Inc. (MERS), acting as Countrywide's nominee.
The note went into default in May 2011 for non-payment and remained in default thereafter. In October 2011, MERS assigned the mortgage to Bank of America, N.A.[3] In 2015, Bank of America assigned the mortgage to plaintiff.
In January 2016, plaintiff filed a foreclosure complaint. Defendant filed an answer. Plaintiff subsequently filed a summary judgment motion and, in response, defendant filed a cross-motion to dismiss the complaint and to amend the answer to include a counterclaim.
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After hearing argument on the motions, the court issued a detailed opinion from the bench. The court found there was no dispute there was a default under the note, and determined plaintiff had standing to foreclose because it is the assignee of the mortgage and possessed the note. The court rejected defendant's claim plaintiff violated the New Jersey Home Ownership Security Act of 2002 (HOSA), N.J.S.A. 46:10B-22 to-35, finding the statute inapplicable because defendant did not present any evidence that the mortgageloan satisfied either the statute's interest rate or total points and fees thresholds, N.J.S.A. 46:10B-24. The court also rejected defendant's assertion that plaintiff violated the Truth in Lending Act, 15 U.S.C. §§ 1601 to 1667f, because the competent evidence in the summary judgment record established that defendant was properly served with a notice of intent to foreclose and notice of the assignment of the mortgage to plaintiff. The court entered a September 22, 2017 order granting plaintiff summary judgment and striking defendant's answer.
Plaintiff filed a motion for entry of final judgment, to which defendant did not file a response. Defendant filed a motion to set the amount due. Defendant challenged the accuracy of plaintiff's business records and argued plaintiff's calculation of the amount due under the note included incorrect late payment charges and failed to credit defendant for mortgage payments made from 2012 to 2014 during his personal bankruptcy proceeding. The court rejected defendant's contentions and found the certification of plaintiff'sloan servicing officer and plaintiff's business records established that the amount plaintiff claimed was due under the note accurately credited defendant with the mortgage payments made during the bankruptcy proceeding.
The court entered an April 27, 2018 order denying defendant's motion to set the amount due and directed the Office of Foreclosure to process plaintiff's motion for entry of a final judgment. On April 30, 2018, the court entered a final judgment of foreclosure finding $344,747.89 was the amount due, plus interest from November 20, 2017, costs and counsel fees. This appeal followed.
On appeal, defendant first argues the court erred by granting summary judgment because there was a fact issue as to whether "Yaccarino alone executed [the] [n]ote." Defendant asserts that plaintiff alleged Yaccarino executed the note, but that there was an issue of fact as to that assertion because he and Yaccarino executed the note and were designated as the "borrowers" in the mortgage.
Summary judgment should be granted if the court determines "there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). We review the motion court's decision de novo and afford its ruling no special deference. Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 224 N.J. 189, 199 (2016). We "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party" in consideration of the applicable evidentiary standard, "are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
In a mortgage foreclosure proceeding, the court must determine three issues: "the validity of the mortgage, the amount of the indebtedness" and default, and the right of the plaintiff to foreclose on the mortgaged property. Great Falls Bank v. Pardo, 263 N.J. Super. 388, 394 (Ch. Div. 1993), aff'd, 273 N.J. Super. 542 (App. Div. 1994). On appeal, defendant does not contest the validity of the mortgage, that the note is in default or plaintiff's right to foreclose. Instead, he argues only that there are fact issues precluding summary judgment, the court erred in rejecting his claim plaintiff violated HOSA and plaintiff failed to present competent evidence supporting its calculation of the amount due. For the reasons that follow, we reject defendant's contentions.
A motion for summary judgment must be denied where there is a genuine issue of fact that is material to the determination of whether the moving party is entitled to judgment as a matter of law, Brill, 142 N.J. at 540, but that is not the case here. As a matter of undisputed fact, Yaccarino alone signed the note, but defendant correctly notes that he and Yaccarino executed an addendum to the note that allowed for the imposition of a prepayment penalty, and in the mortgage he was referred to as a borrower. Those designations, and any purported factual dispute over whether defendant was a party to the note, are immaterial to a resolution of plaintiff's foreclosure action. Whether defendant is a borrower or not, there is no dispute that the mortgage secured the payment of the note, he and Yaccarino received plaintiff's notices of intent to foreclose and there is a default under the note entitling plaintiff to foreclose under the mortgage. See Pardo, 263 N.J. Super. at 394.
We also reject defendant's claim that the court erred by granting summary judgment because plaintiff violated HOSA. As noted, the court found the statute inapplicable because defendant failed to present any evidence that the mortgageloan constituted a "high-cost home loan" to which the statute is applicable where there has been an assignment of the loan. N.J.S.A. 46:10B-27. The court explained that plaintiff did not demonstrate the loan satisfied either the statute's interest rate or total points and fees thresholds to qualify as a high-cost home loan subject to the statute. N.J.S.A. 46:10B-24. The record supports the court's finding. There is no competent evidence supporting the statute's application, and defendant points to none in support of his contention on appeal.
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Defendant last argues the court erred by relying on plaintiff's business records to calculate the amount due. Defendant contends the proffered business records are inadmissible under Rule 803(c)(6) and that plaintiff's representative, Brandi Davis, who submitted a certification concerning the records, did not possess sufficient personal knowledge to support the court's acceptance of the records as competent evidence of the sums due under the note. We are not persuaded.
The Davis certification expressly states that her knowledge was obtained by her personal review of records made in the regular course of her employer's business, at or near the time of the events, and recorded by persons with knowledge of the activity and transactions memorialized in the records. Thus, the documents upon which Davis's certification is based are admissible as business records under Rule 803(c)(6). State v. Sweet, 195 N.J. 357, 370 (2008). There is no requirement that Davis possess personal knowledge of the events reflected in the records. New Century Fin. Servs., Inc. v. Oughla, 437 N.J. Super. 299, 326 (App. Div. 2014); cf., Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 599-600 (App. Div. 2011) (finding a certification supporting a summary judgment motion inadequate because it did not indicate it was based upon personal knowledge and did not reflect the source of the affiant's knowledge of the facts stated).
To the extent we have not addressed any arguments asserted in defendant's pro se brief, they are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
[1] Plaintiff filed the foreclosure complaint "as trustee, on behalf of the holders of HarborView MortgageLoan Trust MortgageLoan Pass-Through Certificates, Series 2006-12."
[2] Yaccarino is a defendant in the foreclosure, but has neither appealed the court's orders nor participated in the appeal.
[3] Bank of America, N.A, is the successor by merger to BAC Home Loans Servicing, LP, which was formally known as Countrywide Home Loans Servicing, LP.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.
PER CURIAM.
Defendant Eric Moore appeals from a February 5, 2015 Chancery
Division order denying his motion to vacate the final judgment in this mortgageforeclosure action. For the reasons that follow, we affirm.
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On August 22, 2003, defendant borrowed $173,000 from Fleet National Bank ("Fleet"). Defendant delivered a note to Fleet in that amount and secured the debt by executing a mortgage encumbering property he owned in Irvington. Defendant executed the mortgage in favor of Mortgage Electronic Registration Systems, Inc. ("MERS") as nominee for Fleet. The mortgage was duly recorded in the Office of Essex County Register on August 28, 2003. Thereafter, Fleet endorsed the note without recourse to Cendant Mortgage Corporation ("Cendant").[1] Cendant endorsed the note in blank.
Six years later, on October 26, 2009, MERS assigned the mortgage to PHH Mortgage Corporation ("PHH"). The assignment was duly recorded on December 21, 2009.
According to the foreclosure complaint that PHH filed on January 10, 2013, defendant defaulted by failing to make an installment payment due June 1, 2012, and has since failed to make any payments.
On February 4, 2014, defendant filed a motion to set aside a default that had been entered pursuant to Rule 4:43-3.[2] Thereafter, plaintiff filed a notice of motion for entry of judgment. Defendant opposed the motion and filed a cross motion to dismiss the complaint. The court denied defendant's cross motion and entered final judgment on November 21, 2014.
Defendant moved to vacate the final judgment. The court denied the motion on February 5, 2015. This appeal followed.
On appeal, defendant argues "[t]he Appellate Division must decide whether the defendant [is] entitled to relief as a matter of law." Defendant also argues plaintiff produced no competent admissible evidence that it owned an interest in the note secured by defendant'smortgage. Defendant contends the "Certification of Proof of Amount Due" signed by plaintiff's assistant vice-president, attesting "[p]laintiff is the holder of the . . . note," is not based on personal knowledge. Defendant further argues the vice-president did not address the note's endorsement in blank. In short, defendant contends plaintiff failed to demonstrate it was entitled to judgment as a matter of law.
Defendant seeks relief under Rule 4:50-1, which states:
On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.
The rule "governs an applicant's motion for relief from default when the case has proceeded to judgment" pursuant to Rule 4:43-2. US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 466-67 (2012). "The rule is `designed to reconcile the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case.'" Id. at 467 (citing Mancini v. EDS, 132 N.J. 330, 334 (1993)).
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Relief from judgment under Rule 4:50-1 "is not to be granted lightly." Bank v. Kim, 361 N.J. Super. 331, 336 (App. Div. 2003). Moreover, "the showing of a meritorious defense is a traditional element necessary for setting aside both a default and a default judgment. . . ." Pressler & Verniero, Current N.J. Court Rules, comment on R. 4:43-3 (2017). That is so because when a party has no meritorious defense, "[t]he time of the courts, counsel and litigants should not be taken up by such a futile proceeding." Guillaume, supra, 209 N.J. at 469 (quoting Schulwitz v. Shuster, 27 N.J. Super. 554, 561 (App. Div. 1953)).
An appellatecourt reviews a trial court's order denying a Rule 4:50-1 motion for relief under an abuse of discretion standard, giving the trial court's ruling substantial deference. Id. at 467 (citations omitted). An appellatecourt "finds an abuse of discretion when a decision is `made without rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Id. at 467-68 (citing Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)).
Here, defendant did not demonstrate he had a meritorious defense to the foreclosure action. His primary contention on appeal is PHH did not have standing when it filed the foreclosure complaint. The argument is unavailing. A mortgage assignment that predates the original complaint confers standing on a plaintiff. Deutsche Bank Trust Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012) (citing Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J. Super. 214, 216 (App. Div. 2011)). Here, it is undisputed that MERS, as nominee for Fleet, assigned the mortgage to PHH on October 26, 2009, and that the mortgage was duly recorded on December 21, 2009, more than three years before PHH filed the complaint on January 10, 2013.
Defendant has no other defenses. We have considered his remaining arguments and found them to be without sufficient merit to warrant further discussion. R. 2:11-3(e)(1)(E).
GOSHEN MORTGAGE, LLC, Plaintiff-Respondent, v. DANIEL WILLIAMS, Defendant-Appellant, and ROSA WILLIAMS, NEW CENTURY FINANCIAL SERVICES, CHILTON MEMORIAL HOSPITAL and MIDLAND FUNDING, LLC, Defendants.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.
PER CURIAM.
Defendant Daniel Williams appeals from a final judgment of foreclosure contending plaintiff Goshen Mortgage, LLC failed to establish its predecessor in this action, Bayview Loan Servicing, LLC, possessed the note and mortgage when it filed its foreclosure complaint. Because the record reveals plaintiff's predecessor established its standing by actual possession of the note and mortgage and a duly recorded assignment of mortgage pre-dating its complaint, we affirm.
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Defendant borrowed $345,100 from Nationwide Equities Corporation in March 2008, executing a thirty-year note and a non-purchase money mortgage on his home. The loan went into default eight months later after defendant and his wife suffered serious health issues. As reflected in the 2014 foreclosure complaint and in counsel for Bayview's certification of diligent inquiry pursuant to R. 4:64-1(a)(2), the note and mortgage were assigned first to Bank of America, N.A., then to the Secretary of Housing and Urban Development and then to the original plaintiff, Bayview. While the matter was pending in the Chancery court, Bayview transferred physical possession of the note and mortgage to Goshen and recorded an assignment of mortgage documenting the transfer. The Chancery judge amended the caption accordingly.
Following discovery, Goshen moved for summary judgment. Defendant opposed, arguing that certain signatures on the assignments of mortgage were forged. He submitted two almost identical reports from a purported handwriting expert, each concluding, without explanation, that the signatures were forged.
After hearing oral argument, Judge McVeigh entered summary judgment for plaintiff, addressing and rejecting each of defendant's arguments in opposition to the motion in a comprehensive written opinion. After a detailed review of the documents in the record, she found Goshen established its own and its predecessor Bayview's standing by virtue of a certification by its servicer's employee made on personal knowledge in accordance with R. 1:6-6. See Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597-600 (App. Div. 2011).
Based on a review of Goshen's records, the employee was able to attest to Bayview's acquisition of the original note and mortgage six months before the filing of the complaint and its transfer of those original documents to Goshen during the pendency of the litigation, which continued to hold them at the time of the motion. As actual holders of the mortgage, plaintiff and its predecessor easily established standing to pursue its foreclosure. See Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 330-31 (Ch. Div. 2010).
Judge McVeigh was also satisfied that Goshen established it and its predecessor's standing through the chain of recorded assignments. Because Bayview had a recorded assignment of mortgage predating the complaint, it had standing to initiate the foreclosure. See Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012). Goshen's physical possession of the note and a recorded assignment of mortgage likewise provided it standing to pursue the complaint to judgment. See Ibid. Judge McVeigh rejected the proffered expert reports as net opinions and questioned whether even a forgery in the recorded assignments would affect plaintiff's standing in light of its possession of the original note and mortgage.
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Defendant appeals, reprising the standing arguments he made to the trial court. Having considered defendant's arguments and reviewed the record on the motion, we affirm, substantially for the reasons expressed by Judge McVeigh in her opinion of December 4, 2015. Because we agree defendant presented no competent proof of forgery, we need not consider whether summary judgment could have been entered had defendant raised a genuine issue as to the authenticity of the signatures on the assignments.
Nicolas A. Stratton argued the cause for appellant (Stratton Stepp, LLP, attorneys; Nicolas A. Stratton, on the brief).
Danielle Weslock argued the cause for respondent (McCarter & English, LLP, attorneys; Joseph Lubertazzi, Jr., of counsel and on the brief; Danielle Weslock, on the brief).
In this appeal of an August 26, 2016 final residential foreclosurejudgment, defendant James I. Peck, IV[1] contends that, after the promissory note, without the mortgage, was sold to Freddie Mac, and Capital One, N.A. (CONA) became the loan servicer on behalf of Freddie Mac, CONA could not foreclose on his home because it did not possess the note and a valid assignment of mortgage at the time it filed the complaint. He argues that only Freddie Mac had standing to foreclose. Although we agree that in these unusual circumstances where one entity owns the note and another the mortgage, both the note and a valid mortgage assignment are required to foreclose, we affirm in spite of certain irregularities.
Freddie Mac's form 10-K annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 provides the following information. The Federal Home Loan Mortgage Corporation, known as Freddie Mac, is a government sponsored enterprise (GSE) chartered by Congress in 1970. Its public mission is to provide liquidity, stability and affordability to the United States housing market. It does this primarily by purchasing residential mortgage loans originated by lenders. It does not originate loans or lend money directly to mortgage borrowers. United States Securities and Exchange Commission, Form 10-K, "Federal Home Loan Mortgage Corporation," https://www.sec.gov/Archives/edgar/data/1026214/XXXXXXXXXXXXXXXXXX/a20174q10k.htm (last visited May 29, 2018).
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On March 10, 2005, defendant executed a promissory note to Chevy Chase Bank, F.S.B., (CCB) which was secured by a residential mortgage by Mortgage Electronic Registration Systems, Inc. (MERS), for $258,750.[2] On July 28, 2005, CCB sold defendant's note to Freddie Mac, but retained 1107the mortgage. In July 2009, CCB converted to a national bank and merged with CONA. Defendant defaulted on the loan in 2010, and did not pay the mortgage or taxes after that date. The original mortgage states: "MERS is a separate corporation that is acting solely as a nominee for [l]ender and [l]ender's successors and assigns." MERS, which also states in the "Assignment of Mortgage" that it is "acting solely as nominee for [CCB], its successors and assigns," assigned the mortgage to CONA on February 9, 2011, more than one year after CCB merged into CONA.
At least since July 15, 2009, defendant received repeated notices that identified CONA as the servicer on the loan, although Freddie Mac remained the investor. Defendant also conceded that he made payments to CONA. In June 2012, the court dismissed without prejudice an earlier foreclosure proceeding initiated by CONA, F-003445-11, because CONA failed to comply with the court-ordered deposition of an employee who could provide information about possible mortgage irregularities. CONA brought the original note to court in that proceeding. The note was subsequently returned to Freddie Mac later in 2012.
On February 15, 2013, CONA initiated the present foreclosure proceedings. The court dismissed the contesting answer on June 9, 2015, and referred the case to the Office of Foreclosure for entry of final judgment as uncontested. R. 4:64-1. Defendant's motion for reconsideration was denied on May 5, 2016 and his subsequent motion for summary judgment was denied on November 25, 2016, after defendant's death.[3]Defendantappeals from the entry of final judgment arguing that CONA lacked standing to foreclose.
Our review is de novo, applying the same legal standard as the trial court. Conley v. Guerrero, 228 N.J. 339, 346, 157 A.3d 416 (2017). Summary judgment must be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburg, 224 N.J. 189, 199, 129 A.3d 1069 (2016) (quoting R. 4:46-2(c)). If all the contesting pleadings have been stricken or otherwise deemed noncontesting, an action to foreclose a mortgage is deemed uncontested. R. 4:64-1(c)(3).
Defendant argues that because "Freddie Mac is the owner of [d]efendant's loan," it "is the only entity with the right to enforce the mortgage." He further argues that in order to validly assign a mortgage, the "assignment must contain evidence of the intent to transfer one's rights." (quoting K. Woodmere Assocs., LP v. Menk Corp., 316 N.J. Super. 306, 314, 720 A.2d 386 (App. Div. 1998)).
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The court found that the material facts in controversy involved standing, and were limited to possession of the original note, endorsement of the note, the transfer of the note from CCB to Freddie Mac, and CONA's right to enforce the note. The trial court concluded, "[I]t's clear . . . that a bearer of the note endorsed in blank is the holder of the note [ ] and entitled to enforce the note pursuant to N.J.S.A. 12A:3-301." Unquestionably, CONA had possession of the original note during the earlier foreclosure hearing in 2012.
In Mitchell, we held that a plaintiff may establish standing either through possession of the note or as an assignee under 108N.J.S.A. 46:9-9 "if it . . . presented an authenticated assignment indicating that it was assigned the note before it filed the original complaint." Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J. Super. 214, 224, 27 A.3d 1229 (App. Div. 2011). We emphasized this holding in Deutsche Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315, 318, 53 A.3d 673 (App. Div. 2012). Thus, a plaintiff need not actually possess the original note at the time of filing in order to have standing to file a foreclosurecomplaint. Mitchell, 422 N.J. Super. at 225, 27 A.3d 1229.[4]
In both Mitchell and Angeles we dealt with the usual foreclosure situation where one entity owns both the note and the mortgage. As Judge William C. Todd, III said: "It is difficult to imagine circumstances where one would want to hold a mortgage, without having the right to act on the underlying debt. By the same token, there is no technical reason why the interests could not be separated in one way or another." Raftogianis, 418 N.J. Super. at 345, 13 A.3d 435. Here we have such a situation: where Freddie Mac owns the note and CCB, now merged into CONA, retained the mortgage. To preclude the possibility of one entity foreclosing on the home while the other enforces the note, we now hold that when the note is separated from the mortgage, the plaintiff in a foreclosure action must demonstrate both possession of the note and a valid mortgage assignment prior to filing the complaint.
Defendant concedes that Freddie Mac, as owner of the note, had the right to foreclose on defendant's home. Defendant argues, however, that the mortgage was not legally retained by CCB, but followed the note by force of law. We reject that analysis. The issue is whether CONA, both the successor owner and assignee of the mortgage, and the loan servicer, had the right to foreclose. "Foreclosures must normally be processed or litigated in the [s]ervicer's name." Freddie Mac, Bulletin Number 2013-22, http://www.freddiemac.com/singlefamily/guide/bulletins/pdf/bll1322.pdf (October 18, 2013). Freddie Mac's requirement that the servicer of the loan litigate a foreclosure in the servicer's name supports CONA's assertion regarding its authority to bring a foreclosure action.
Standing is not a jurisdictional issue in New Jersey. Deutsche Bank Nat'l Tr. Co. v. Russo, 429 N.J. Super. 91, 101, 57 A.3d 18 (App. Div. 2012). Depending on the equities of the particular proceeding, a foreclosurejudgment may not be reversed, even if some irregularities in the foreclosure process are demonstrated by the defendant. See Angeles, 428 N.J. Super. at 320, 53 A.3d 673 ("In foreclosure matters, equity must be applied to plaintiffs as well as defendants.").
Here, MERS as nominee for CCB and its "successors" did assign the mortgage to CONA, a formality because CONA is a successor to CCB. Thus, CONA had both the original note and an assignment before filing this foreclosurecomplaint. The twist here is that CONA returned the original note to Freddie Mac, and obtained the assignment from MERS as nominee of CCB after CCB merged with CONA.
Given that defendant was provided more than sufficient notice that CONA was the servicer for Freddie Mac, given that Freddie 1109Mac is a GSE that publicly declares its policy to foreclose through its servicers, and given that CONA did possess the note at an earlier foreclosure proceeding as well as an assignment from MERS, we do not find the irregularities here sufficient to reverse the foreclosurejudgment. We do not intend by this decision to approve the way this foreclosure was prosecuted. The note should have been in CONA's possession at the time it filed this foreclosurecomplaint.
Affirmed.
[1] Peck, who litigated this matter as a pro se attorney, died on July 2, 2016. We continue to refer to defendant as the party in interest in this opinion.
[2] "MERS is a private corporation which administers a national electronic registry that tracks the transfer of ownership interests and servicing rights in mortgage loans. . . . MERS, as nominee, does not have any real interest in the underlying debt, or the mortgage which secured that debt. It acts simply as an agent or `straw man' for the lender." Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 332, 347, 13 A.3d 435 (Ch. Div. 2010).
[3] Defendant apparently filed this final motion shortly before he died.
[4] Effective February 18, 2016, three years after the commencement of this foreclosure action, a new statute required that "[o]nly the established holder of a mortgage shall take action to foreclose a mortgage." N.J.S.A. 46:18-13(1)(a). Thus to have standing to foreclose, as of the effective date of this statute, a plaintiff must have an original mortgage or recorded assignment, or be found to be the record mortgage holder in a civil action. N.J.S.A. 46:18-13(1)(b).
CITI MORTGAGE, INC., Plaintiff-Respondent, v. ELVIRA L. PENG a/k/a ELVIRA PENG, Defendant-Appellant, and MR. PENG, her husband; DANIEL L. CHIONG a/k/a DANIEL CHIONG and MRS. DANIEL CHIONG, his wife, Defendants.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
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The record discloses defendants Elvira Peng and her son, Daniel Chiong, purchased the subject property in Vineland in 2004. On March 16, 2006, they refinanced by executing a thirty-year fixed rate note to CitiMortgage in the amount of $233,024. To secure payment of the note, on the same date, defendants executed a non-purchase money mortgage on the property to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for CitiMortgage. The mortgage was recorded with the Cumberland County Clerk on April 5, 2006.
Defendant Elvira Peng filed an answer, essentially alleging fraud by the developer.[1]Defendant's[2] answer did not respond to the allegations in the complaint nor contest the default or the validity of the note and assignment. On October 24, 2014, the motion judge heard oral argument on CitiMortgage's motion to strike defendant's answer and enter summary judgment. Thereafter, the judge entered summary judgment in favor of CitiMortgage, struck defendant's answer, and referred the matter to the Office of Foreclosure as an uncontested matter for further proceedings, see Rule 4:64-1(c).
On February 16, 2016, the same judge denied defendant's motion objecting to the entry of final judgment. The judge noted:
[P]ursuant to [Rule 4:64-1(d)(3)], only objections that dispute the . . . correctness of the Certification of Amount Due, and do so with specificity, are appropriately reviewed at this level.
As indicated, Ms. Peng has a dispute with the builder of longstanding. It does appear from the papers filed that she has filed a claim or an action in Superior Court against the builder.
And that that matter was disposed of by Judge Geiger and may be the subject of . . . an appeal. I'm satisfied that it is not related to the foreclosure action.
That it's a money damages matter that stands on its own and I would dismiss the objection with prejudice and return the matter to the Office of Foreclosure for entry of Judgment.
On February 29, 2016, final judgment was entered and this appeal follows.
On appeal, defendant renews the arguments presented to the motion judge. We have reviewed the record and considered defendant's arguments and conclude they are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We offer the following brief comments.
To establish a prima facie right to foreclose on a mortgage, there must have been execution, recording and non-payment of the mortgage. Thorpe v. Floremoore Corp., 20 N.J. Super. 34, 37-38 (App. Div. 1952). Additionally, "[a]s a general proposition, a party seeking to foreclose a mortgage must own or control the underlying debt" to have standing to foreclose. Deutsche Bank Nat'l Tr. Co. v. Mitchell, 422 N.J. Super. 214, 222 (App. Div. 2011) (quoting Wells Fargo, N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div. 2011)). "[E]ither possession of the note or an assignment of the mortgage that predated the original complaint confer[s] standing." Deutsche Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012) (citing Mitchell, 422 N.J. Super. at 216, 225).
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Here, the competent evidence in the record confirms that plaintiff established a prima facie right to foreclose on the mortgage. Additionally, plaintiff had standing to foreclose by virtue of the fact that it had both possession of the note and assignment of the mortgage that pre-dated the filing of the complaint. Accordingly, the final judgment was properly entered and defendant's motion objecting to its entry was properly denied.
Affirmed.
[1]Defendant Elvira Peng has a longstanding dispute with the developer, Landmark Development, dating back to 2004 in which she claims she was defrauded by the construction of a larger house than she agreed to purchase. According to Peng, she agreed to purchase "2515 square feet of dwelling" but "an area of 3,219.00 square feet of dwelling[]" was "substituted" instead. As a result of these misrepresentations and deceptive business practices, Peng asserts there was an unlawful increase in price, property taxes and hazard insurance that constitute "ground[s] to void and nullify" the mortgage contract and promissory note executed in connection with the purchase of the property in 2004 as well as the "refinance contract" entered in 2006. Peng claimed she was fraudulently induced to enter into the 2006 "refinance contract" with CitiMortgage based on misrepresentations of "negative escrow[.]"
[2] Although there are other named defendants, none have appealed the final judgment. For simplicity, our reference to "defendant" in this opinion refers only to Elvira Peng.
