THE BANK OF NEW YORK MELLON TRUST COMPANY NATIONAL ASSOCIATION, ETC. VS. DENISE GRECO (F-012809-16, PASSAIC COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0180-17T3
THE BANK OF NEW YORK
MELLON TRUST COMPANY
NATIONAL ASSOCIATION,
f/k/a The Bank of New York
Trust Company, N.A. as Successor
to JPMorgan Chase Bank, as
Trustee for Residential Asset
Mortgage Products, Inc., Home
Equity Mortgage Asset-Backed
Pass-Through Certificates,
Series 2004-KR2,
Plaintiff-Respondent,
v.
DENISE GRECO, MR. GRECO,
Husband of Denise Greco, ALFRED
GRECO,
Defendants-Appellants,
and
JP MORGAN CHASE BANK,
NATIONAL ASSOCIATION;
HOUSEHOLD FINANCE
CORPORATION III; AMERICAN
EXPRESS TRAVEL RELATED
SERVICES CO., INC.; A SAFE
SELF STORAGE PLACE INC.,
PARSIPPANY DENTAL CARE,
Defendants,
and
ALFRED GRECO AND DENISE GRECO,
Third-Party Plaintiffs-
Appellants,
v.
U.S. BANK, N.A.; AMERICA'S
SERVICING COMPANY; MORTGAGE
ELECTRONIC REGISTRATION
SERVICES,
Third-Party Defendants-
Respondents,
and
PHELAN HALLINAN, DIAMOND &
JONES, PC, PHELAN HALLINAN,
SCHMIEG, PC, ROSEMARIE
DIAMOND, ESQ.,
Third-Party Defendants.
_______________________________
Submitted October 11, 2018 - Decided October 22, 2018
Before Judges Accurso and Moynihan.
A-0180-17T3
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On appeal from Superior Court of New Jersey,
Chancery Division, Passaic County, Docket No.
F-012809-16.
Tomas Espinosa, attorney for appellants.
Reed Smith, LLP, attorneys for respondents (Henry F.
Reichner, of counsel and on the brief; David G.
Murphy, on the brief).
PER CURIAM
In this contested mortgage foreclosure action, defendant Denise Greco and
her husband Alfred Greco appeal from the denial of their motion to dismiss the
complaint, the entry of summary judgment striking their answer, and the
subsequent final judgment. They contend the trial court erred in finding plaintiff
The Bank of New York Mellon Trust Company, National Association F/K/A
The Bank of New York Trust Company, N.A. as successor to JPMorgan Chase
Bank, as trustee for Residential Asset Mortgage Products, Inc., Home Equity
Mortgage Asset-Backed Pass-Through Certificates, Series 2004-Kr2 had
standing to foreclose their mortgage, was entitled to enforce the note and that
the complaint was not barred by the six-year statute of limitations in N.J.S.A.
12A:3-118(a). Our review of the record convinces us that none of those
arguments is of sufficient merit to warrant extended discussion in a written
opinion. R. 2:11-3(e)(1)(E).
A-0180-17T3
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Defendants admit Alfred Greco executed and delivered on June 23, 2004,
a $533,700 note to Mortgage Lenders Network USA, Inc., secured by a purchase
money mortgage executed by Alfred and Denise Greco on their home in North
Haledon to Mortgage Electronic Registration Systems, Inc., (MERS) as nominee
for the lender, its successors and assigns.1 They further admit they defaulted on
the loan in June 2007, have not made any payments since that time, and that
plaintiff served them with a notice of intent to foreclose thirty days before filing
its complaint.
The foreclosure of this securitized mortgage has a long procedural history.
U.S. Bank, N.A. obtained final judgment in foreclosure against defendants in
June 2008. Defendants appealed. While the matter was pending in this court,
U.S. Bank apparently realized a problem with the assignment of the mortgage it
received from MERS; specifically, that MERS had not assigned U.S. Bank the
mortgage until a date after the complaint was filed. U.S. Bank accordingly
entered into a stipulation with defendants for a remand to the trial court for the
purpose of vacating the final judgment and dismissing the foreclosure wit hout
prejudice.
1
Alfred Greco and Denise Greco deeded the property to Denise Greco in
2006.
A-0180-17T3
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In May 2016, plaintiff filed a new foreclosure complaint against
defendants, detailing the assignment history of the mortgage, including two
different recorded assignments into plaintiff, one in 2011 from MERS as
nominee for the original lender and one in 2015 from U.S. Bank. Defendants
contended the assignment from U.S. Bank is invalid because the assignment into
U.S. Bank by MERS was executed by someone without specific authority to do
so on the date of the assignment.
The trial court rejected defendants' attack on the assignment of the
mortgage. Besides noting that defendants, as strangers to the assignment, were
without standing to assert the rights of third-parties as to its validity, see Bank
of N.Y. v. Raftogianis, 418 N.J. Super. 323, 350 (Ch. Div. 2010), the judge
found plaintiff's recorded assignment pre-dating the complaint provided it
standing to prosecute the foreclosure under established New Jersey law, see
Deutsche Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 (App. Div.
2012).2
2
N.J.S.A. 46:18-13, effective February 18, 2016, prior to the file date of this
action, expressly permits "the established holder of the mortgage," defined as
"the record holder of the mortgage as established by the latest record of
assignment or by the original mortgage recording in the records of the county
clerk" to "take action to foreclose a mortgage."
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Defendants also disputed plaintiff's assertion that it possessed the original
note prior to filing its complaint. Plaintiff contended the note was endorsed by
the original lender to Residential Funding Corporation, which in turn endorsed
it to JPMorgan Chase Bank, as trustee, plaintiff's predecessor. Plaintiff asserted
that when it assumed the role of trustee, Residential Funding cancelled its
endorsement to JPMorgan as trustee and endorsed the note to plaintiff as
successor trustee. Defendants asserted plaintiff "has never been a trustee," that
"[t]he documents of the loan never became property of the trust, the documents
of the loan never were legally possessed by the trustee (plaintiff)[,] the trustee
never became the note holder nor a nonholder with the right[s] of a holder . . .
whether at the closing date of the trust per the [pooling and servicing agreement]
nor subsequently on or before the filing of the present action."
The General Equity judge found the certification submitted by an
employee of plaintiff's servicer that her review of the servicer's records revealed
it was in possession of the note before plaintiff filed its complaint fully complied
with the personal knowledge requirement of R. 1:6-6 and Wells Fargo Bank,
N.A. v. Ford, 418 N.J. Super. 592, 599-600 (App. Div. 2011), and defendants
offered no proof of their own to put the fact in issue. Indeed, defendants admit
plaintiff's servicer has serviced the loan since before the first action was
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dismissed. Because plaintiff established its possession of the note, specifically
endorsed to its order, prior to its filing of the foreclosure complaint, the judge
concluded plaintiff established its standing to enforce the note and foreclose the
mortgage. See Raftogianis, 418 N.J. Super. at 356. The judge further noted that
even if defendants could somehow establish a flaw in the endorsements
impugning plaintiff's status as a holder, plaintiff had established its possession
of the note, providing it the right to enforce it under N.J.S.A. 12A:3-203(b). See
Raftogianis, 418 N.J. Super. at 331-32.
Defendants have provided us no basis to second-guess the General Equity
judge's findings. There appears nothing in this record to suggest that defendants'
mortgage was not securitized sometime after the loan was made, or that plaintiff,
acting as trustee, is not the entity entitled to enforce the debt. "It is a
fundamental maxim of equity that 'equity looks to substance rather than form.' "
Id. at 348 (quoting Applestein v. United Bd. & Carton Corp., 60 N.J. Super. 333,
348 (Ch. Div.), aff'd o.b., 33 N.J. 72 (1960)). Both the endorsement and transfer
of the note and the recorded assignments of mortgage all appear aimed at
providing plaintiff the right to enforce the debt by foreclosing defendants'
mortgage. Defendants admit they borrowed over half a million dollars to buy
the house where they have resided without making any payments toward the
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mortgage, real estate taxes or insurance for the last eleven years. As we have
previously noted, "[i]n foreclosure matters, equity must be applied to plaintiffs
as well as defendants." Angeles, 428 N.J. Super. at 320.
We also reject defendants' argument that N.J.S.A. 12A:3-118(a) controls
here. N.J.S.A. 12A:3-118(a) provides for a six-year statute of limitations in "an
action to enforce the obligation of a party to pay a note." Plaintiff, however, has
not sued defendants on the note. Plaintiff's suit is one to foreclose the mortgage,
and is thus controlled by N.J.S.A. 2A:50-56.1, which provides:
An action to foreclose a residential mortgage shall not
be commenced following the earliest of:
a. Six years from the date fixed for the making of the
last payment or the maturity date set forth in the
mortgage or the note, bond, or other obligation secured
by the mortgage, whether the date is itself set forth or
may be calculated from information contained in the
mortgage or note, bond, or other obligation, except that
if the date fixed for the making of the last payment or
the maturity date has been extended by a written
instrument, the action to foreclose shall not be
commenced after six years from the extended date
under the terms of the written instrument;
b. Thirty-six years from the date of recording of the
mortgage, or, if the mortgage is not recorded, 36 years
from the date of execution, so long as the mortgage
itself does not provide for a period of repayment in
excess of 30 years; or
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c. Twenty years from the date on which the debtor
defaulted, which default has not been cured, as to any
of the obligations or covenants contained in the
mortgage or in the note, bond, or other obligation
secured by the mortgage, except that if the date to
perform any of the obligations or covenants has been
extended by a written instrument or payment on
account has been made, the action to foreclose shall not
be commenced after 20 years from the date on which
the default or payment on account thereof occurred
under the terms of the written instrument.
[N.J.S.A. 2A:50-56.1(a) to (c) (emphasis added).]
As the maturity date expressly "set forth" in defendants' note is July 1, 2034,
plaintiff's foreclosure is obviously timely.
We further reject, as inconsistent with the statute, defendants' alternative
argument that plaintiff having declared the whole of the unpaid principal,
interest and any advances due on defendants' default in 2007, its complaint had
to have been filed within six years of that new maturity date instead of by the
original July 1, 2034 maturity date set forth in the note. The plain language of
N.J.S.A. 2A:50-56.1(a) permits calculation of a maturity date only "from
information contained in the mortgage or note." As defendants' default and the
lender's acceleration of all amounts due are not "information contained in t he
mortgage or note," the July 1, 2034 maturity date "set forth in the mortgage"
clearly controls. Ibid.
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Our review of the record convinces us plaintiff established its entitlement
to summary judgment striking defendants' answer and permitting the matter to
proceed as uncontested. Defendants' claims that the matter was time-barred and
plaintiff failed to establish its standing to foreclose are plainly without merit.
Affirmed.
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