Opinion
DOCKET NO. A-1876-14T3
03-15-2016
CITIBANK, NA AS TRUSTEE, Plaintiff-Respondent, v. MONICA M. MARTINEZ, Defendant-Appellant, and WASHINGTON MUTUAL BANK, Defendant.
Howard A. Miller, attorney for appellant. Fein, Such, Kahn and Shepard, attorneys for respondent (Joshua B. Sears, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Accurso and Suter. On appeal from Superior Court of New Jersey, Chancery Division, Union County, Docket No. F-23399-08. Howard A. Miller, attorney for appellant. Fein, Such, Kahn and Shepard, attorneys for respondent (Joshua B. Sears, on the brief). PER CURIAM
Following the entry of a final judgment of foreclosure, appellant Monica M. Martinez (Martinez) appeals an order that denied her motion to enforce what she claimed was a settlement permanently modifying her mortgage loan. We affirm.
I.
In January 2007, Martinez executed a $396,000 adjustable-rate mortgage with Washington Mutual Bank (WAMU) to secure the purchase of her residence. She also executed another mortgage loan with WAMU on the same date for $99,000, which was subordinate to the first. By February 1, 2008, Martinez had defaulted on the first mortgage through non-payment. A few months later, a foreclosure complaint was served on Martinez by Citibank, NA as Trustee (Citibank), which by then had been assigned the mortgage. Martinez never filed an answer to the foreclosure complaint. Following the entry of default, a final judgment of foreclosure was entered on April 15, 2009, which was not contested by Martinez.
Martinez claimed to have entered into an oral agreement with a man named "John" at the "bank" for a reduced payment and interest rate, but when she did not receive written confirmation, she was told there was no record of her application. After that, she received a loan modification application, filled it out and "got something back" telling her to pay $2,220.02 per month, beginning in June 2009. She made monthly payments from June 2009 until July 2010 of $2,220.02. In August 2010, her payment was returned because the property was in foreclosure.
Martinez relied on an unsigned copy of the "Trial Plan Agreement." It advised Martinez her loan was due for the months of January 2008 through May 2009. She was to make the initial payment of $2,220.02 in certified funds by June 1, 2009 and to follow the payment schedule for the months of June, July and August 2009. Payments were due on the first of the month. The agreement would be breached if payments were not made on time, and foreclosure activity would then resume. Payments were subject to escrow or interest rate changes. If all payments were made as scheduled, her application for assistance would be reevaluated to determine if the bank would be able to offer her "a permanent work out solution" to bring her loan current. The terms of her original loan remained "in full force and effect," unless the agreement said otherwise. If any part of the agreement were breached, WAMU had "the option to terminate the [a]greement and begin or resume foreclosure proceedings pursuant to [the] loan documents and applicable law."
While Martinez was making payments under the trial plan, she was sent a letter dated December 23, 2009 advising of a payment change in her adjustable-rate mortgage, effective March 1, 2010, increasing payments to $2,790.65. In June 2010, she was sent a letter from Chase Home Finance LLC (Chase), the mortgage servicer, advising it had not received all the documents needed to complete her request for a loan modification. The letter referenced her participation in a trial plan. It warned she had thirty days to provide the required documents or the trial plan would be terminated and "other means" to collect amounts due may resume. There was a list of requested documents including tax transcripts, pay stubs, federal tax returns, bank statements, W-2's and a host of other items including her "[r]equest for [m]odification and [a]ffidavit." This letter was sent to the address of the mortgaged property where all the other correspondence had been sent. Martinez did not remember receiving this letter.
On August 13, 2010, a "Final Notice" was sent by Chase advising in capitalized, bold print: "Your request for a loan modification may be cancelled." She had not completed and returned an application with all the information listed. In all capital letters, it further provided she "may permanently lose [her] eligibility for an MHA Modification" if she did not respond. Although sent to the same home address, Martinez did not recall receiving it.
Foreclosure activities resumed by October 2010 when a notice of sheriff's sale was sent to Martinez. The sale was adjourned several times. Martinez's motion to vacate the default judgment, alleging excusable neglect based upon the trial plan payments, and alleging a meritorious defense under the Consumer Fraud Act, N.J.S.A. 56:8-1 to 195, based upon her likely inability to ever repay the loans, was denied in September 2011.
Thereafter, Martinez filed a motion to enforce the trial plan as a settlement, claiming she remembered "giving them everything and anything they asked for[.]" The trial court denied her motion on December 2, 2011, finding the August 13, 2010 letter was sent to Martinez at the property address where other correspondence had been sent "requesting additional information to continue the terms of the settlement agreement," but that Martinez "simply failed to comply." As such, "the efforts of the parties to resolve the judgment entered against the defendant were not able to be concluded[.]"
II.
Martinez contends the trial court erred when it did not find that the trial plan violated the Consumer Fraud Act or schedule a plenary hearing. Martinez claims the judge erred by not construing the trial plan as a binding agreement to modify her mortgage obligation. Citibank contends the trial court properly denied Martinez's request for a permanent modification.
We have held in other cases involving a foreclosure that a temporary trial plan agreement under the Federal Home Affordable Mortgage Program (HAMP) is a "unilateral offer" by the lender to provide a loan modification to homeowners provided they make all payments under the agreement on time and submit requested financial documentation to establish the accuracy of their financial representations. Arias v. Elite Mortg. Group, Inc., 439 N.J. Super. 273, 279 (App. Div. 2015); see also, Miller, supra, 439 N.J. Super. at 549. This was based on our reading of the trial plan agreements in those cases which provided the servicer for the lender would permit a loan modification "if and only if" the homeowners satisfied all the trial plan requirements. Arias, supra, 439 N.J. Super. at 279; Miller, supra, 439 N.J. Super. at 549. In Arias, supra, 439 N.J. Super. at 281, where the mortgagors brought suit against their lender for breach of contract arising from a temporary trial plan under HAMP, we did not disturb the trial court's dismissal of their claim because the homeowners failed to make the required payments and did not provide the required financial documentation. In Miller, supra, 439 N.J. Super. at 549, we held that the mortgagors were not precluded from pursuing various state law claims, including claims for breach of contract and violation of the Consumer Fraud Act arising from an underlying HAMP trial plan, even though there was no private right of action under HAMP. We found in Miller, the case was properly dismissed on summary judgment because the mortgagors failed to show they had satisfied the terms of the trial plan by making timely payments. Id. at 550. In Gonzalez v. Wilshire Credit Corp., 207 N.J. 557, 563-64, 583 (2011), the Court held that a non-borrower mortgagor could pursue a Consumer Fraud Act claim against the mortgagee, where the post-foreclosure judgment agreements that extended credit in effect recast the underlying loan obligation and placed the mortgagor on a credit "merry-go-round" and "in a constant state of arrearages."
HAMP is a "program created by the Emergency Economic Stabilization Act, 12 U.S.C.A. §§ 5201-5261 (2008)." Miller v. Bank of Am. Home Loan Serv., 439 N.J. Super. 540, 544 (App. Div. 2015), certif. denied, 221 N.J. 567 (2015). It was "designed to aid qualified homeowners facing foreclosure." Ibid. --------
We find no error in the trial court's decision to deny Martinez's motion to enforce a settlement. To begin with, we cannot say the trial plan Martinez entered into was the same HAMP trial plan that was at issue in Arias and Miller. The only document supplied by Martinez did not promise a modification of the loan, did not agree to dismiss the foreclosure judgment, and did not recast the terms of Martinez's loan.
Even if this trial plan were construed as a unilateral offer to modify the loan, we find no error in the judge's decision to reject enforcement because Martinez failed to comply with its terms. Although she appears to have made monthly payments, she did not pay the increased amount of $2,790.65 after March 1, 2010 and did not show compliance in providing the requested financial information. Her self-serving comments that she gave the bank "everything" are to no avail. Miller, supra, 439 N.J. Super. at 551 ("[C]laims of timeliness and compliance with the [temporary plan], absent production of written verification, assert a factual dispute which is merely 'illusory.'" (quoting Globe Motor Co. v. Igdalev, 4 36 N.J. Super. 594, 603 (App. Div. 2014))).
In Gonzalez, supra, 207 N.J. at 563-64, 581, where the homeowner was paying the principal, interest, "late payment fees, foreclosure costs, attorney's fees, insurance fees on the subject property, and interest on the arrearages[,]" as well as lump sum payments toward those arrears, the Consumer Fraud Act was found to apply to post-judgment foreclosure forbearance agreements because the agreements constituted "the extension of credit, or a new loan." These agreements "recast" the terms of the note to which Gonzalez had not even been a signator. Id. at 563, 580. Gonzalez was promised dismissal of the foreclosure suit if she became current. Id. at 566.
Here, there was no agreement to dismiss the foreclosure complaint upon completion of the payments and the loan was not recast. Martinez was not paying for "forced" insurance coverage; she did not allege payment of arrears or even that she had brought the mortgage current; she paid less per month during the trial plan than the required mortgage payment. She also did not file a state law claim against the lender or servicer. We perceive no error in denying Martinez's motion to enforce because, as the trial judge found, she simply failed to comply with the plan.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION