Opinion
DOCKET NO. A-0539-11T3
04-08-2013
WELLS FARGO BANK, N.A., Plaintiff-Appellant, v. NUBIA DOMINGUEZ; Mr. DOMINGUEZ, husband of NUBIA DOMINGUEZ, JUAN G. DOMINGUEZ; MRS. DOMINGUEZ, his wife, Defendants-Respondents.
Diane A. Bettino argued the cause for appellant (Reed Smith, attorneys; Ms. Bettino, Henry F. Reichner and Kellie A. Lavery, of counsel and on the brief). Rebecca Schore argued the cause for respondents (Legal Services of New Jersey, attorneys; Ms. Schore and Margaret Lambe Jurow, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Fuentes, Grall and Ashrafi.
On appeal from Superior Court of New Jersey, Chancery Division, General Equity Part, Bergen County, Docket No. F-48760-09.
Diane A. Bettino argued the cause for appellant (Reed Smith, attorneys; Ms. Bettino, Henry F. Reichner and Kellie A. Lavery, of counsel and on the brief).
Rebecca Schore argued the cause for respondents (Legal Services of New Jersey, attorneys; Ms. Schore and Margaret Lambe Jurow, on the brief). PER CURIAM
Plaintiff, Wells Fargo Bank, N.A. (Wells Fargo), appeals from an order dismissing without prejudice its complaint to foreclose a mortgage executed by defendants Nubia and Juan G. Dominguez. The order was entered on cross-motions for summary judgment. The judge determined that the notices of intention Wells Fargo served prior to filing the foreclosure complaint did not comply with N.J.S.A. 2A:50-56(c)(11), a provision of the Fair Foreclosure Act (FFA), N.J.S.A. 2A:50-53 to -68. In conformity with this court's decision in Bank of New York v. Laks, 422 N.J. Super. 201 (App. Div. 2011), the judge determined that a dismissal without prejudice was required.
The judge also denied defendant Nubia Dominguez' motion for summary judgment on her counterclaim, but she has not filed a cross-appeal contesting that determination.
Several months after the order of dismissal was entered, the Supreme Court overruled Laks "[t]o the extent that [it] holds that the only remedy available to a trial court for a violation of N.J.S.A. 2A:50-56(c)(11) is dismissal without prejudice." U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 458 (2012). The court held that a judge "may dismiss the action without prejudice, permit a cure or impose such other remedy as may be appropriate to the specific case." Ibid. Wells Fargo, however, does not challenge the remedy. Rather, it claims that its notice of intention was not deficient. We disagree.
The FFA requires a "residential mortgage lender [to] give the residential mortgage debtor notice of [its] intention [to foreclose] at least 30 days in advance" of commencing a foreclosure action. N.J.S.A. 2A:50-56(a). "The notice of intention is a central component of the FFA, serving the important legislative objective of providing timely and clear notice to homeowners that immediate action is necessary to forestall foreclosure." Guillaume, supra, 209 N.J. at 470.
The FFA further provides that the notice of intention must, among other things, provide "the name and address of the lender." N.J.S.A. 2A:50-56(c)(11). The term "lender" is statutorily defined as "any person, corporation, or other entity which makes or holds a residential mortgage, and any person, corporation or other entity to which such residential mortgage is assigned." N.J.S.A. 2A:50-55 (emphasis added). As Guillaume explains, "[t]hat language clearly conveys the Legislature's intent that the homeowner be notified of the identity of the entity that currently holds the mortgage." 209 N.J. at 472. "[T]he Legislature, intending to protect homeowners at risk of foreclosure, has unmistakably directed that a homeowner shall be advised of the exact entity to which he or she owes the balance of the loan." Ibid.
There is no dispute that Wells Fargo filed this foreclosure complaint on September 11, 2009, and served notices of intention on February 15, March 15 and July 12, 2009. Thus, the notices of intention were timely served. Moreover, there is no dispute that the mortgage was assigned to Wells Fargo on September 9, 2009, a date about two months after the last notice of intention was served and only two days before Wells Fargo filed its complaint. That assignment is included in the record, and there is no evidence suggesting an assignment of the mortgage on an earlier date.
The question here is whether Wells Fargo was the "lender," within the meaning of the FFA, when it served the notices. Each of the notices of intention identify Wells Fargo as the holder of the mortgage. The trial judge found the several notices of intention Wells Fargo served deficient because the mortgage was assigned after they were issued.
On appeal, Wells Fargo contends that the date of the mortgage assignment is meaningless because Wells Fargo held the note prior to that date. The mortgage assignment contains a statement that amounts to a legal opinion supporting that argument. It states: "The transfer of the mortgage and accompanying rights was effective at the time the loan was sold and consideration passed to the Assignee. This assignment is solely intended to describe the instrument sold in a manner sufficient to put third parties on public notice of what has been sold." But the assignment does not state the date on which the loan was sold.
In support of the legal proposition asserted in the assignment, Wells Fargo focuses on the passage from Guillaume observing that the Legislature "unmistakably directed that a homeowner shall be advised of the exact entity to which he or she owes the balance of the loan." Ibid. Wells Fargo also relies upon the principle that "an assignment of a bond or note evidencing a secured obligation will operate as an assignment of the mortgage 'in equity.'" Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 348 (Ch. Div. 2001) (citing 29 New Jersey Practice, Law of Mortgages § 11.2, at 748 (Myron C. Weinstein) (2d ed. 2001)); see also Hyman v. Sun Ins. Co., 70 N.J. Super. 96, 101 (App. Div. 1961) (noting "an assignment of a debt, if not limited in its scope, carries with it the promises and undertakings connected therewith and tending to secure its payment"); Fed. Reserve Bank of Phila. v. Welch, 122 N.J. Eg. 90, 92 (Ch. 1937) (noting "the transfer of the notes . . . secured by the bond and mortgage, operate[d] as an assignment of the bond and mortgage"); Stevenson v. Black, 1 N.J. Eg. 338, 343 (Ch. 1831) (noting as "a general rule" the "assignment of the bond operates as an assignment of the mortgage").
Because we conclude that the record submitted on summary judgment does not include sufficient competent evidence to establish when Wells Fargo obtained possession of the note, there is no reason to discuss this objection to the judge's ruling. Wells Fargo has not established the predicate fact upon which the argument rests — that it held the note prior to the assignment of the mortgage.
The evidence concerning Wells Fargo's ownership of the note is as follows. In September 2007, ten years after purchasing a home in Bogota, defendants refinanced their mortgage with a $237,500 loan from Emigrant Mortgage Company. On December 21, 2007, to refinance the Emigrant loan, they took out a $288,000 loan from Majestic Home Mortgage Corporation (Majestic) secured by the mortgage at issue here.
The record includes two copies of the note dated December 21, 2007 and signed by Nubia Dominguez, memorializing the borrower's promise to repay Majestic and her understanding of Majestic's right to transfer the note and her obligation to pay the note holder. The copies of the note are substantially identical. Both bear identical eighteen-digit loan numbers, and both are stamped "CANCELLED." The copies differ in that one includes a handwritten ten-digit number beneath the typed loan number, and an additional stamp, which reads "CERTIFIED TRUE COPY MAJESTIC HOME MORTGAGE," over which a large X is handwritten. The other includes a different additional stamp — "ALLONGE ATTACHED FOR THE PURPOSE OF ENDORSING THE NOTE."
Paragraph ten of the note links it with the mortgage. In pertinent part it provides: "In addition to the protections given to the Note Holder under this Note, a Mortgage, Deed of Trust, or Security Deed (the "Security Instrument"), dated the same date as this Note, protects the Note Holder from possible losses which might result if I do not keep the promises which I make in this Note."
The mortgage bears the eighteen-digit loan number that appears on both copies of the note and a ten-digit handwritten number identical to the one handwritten on the second copy of the note. It identifies Majestic as the lender, and it defines the term "Note" with reference to the date, loan amount and last date for full payment set forth in the note. The mortgage lists Nubia Dominguez, married, and Juan G. Dominguez, married, as the borrowers, and they both signed the mortgage.
The mortgage explains the relationship between the note holder and the mortgage as follows:
This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note.
The mortgage includes a grant to MERS:
Defined as follows: "'MERS' is the Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's Successors and assigns. MERS is the mortgagee under this Security Instrument. . . ."
For these purposes, Borrower does hereby mortgage, grant and convey to MERS (solely as nominee for Lender and Lender's successors and assigns) and to the successors and assigns of MERS [the property described].
The record also includes two copies of the "ALLONGE TO PROMISSORY NOTE," referenced in the note. Each allonge is dated December 21, 2007, but neither copy provides any information about the date on which the subsequent endorsements were made. The first copy includes two endorsements: the first, from Majestic to HSBC Mortgage Corporation USA without recourse; and the second, from HSBC to Wells Fargo without recourse. The second copy of the allonge to promissory note differs materially from the first in that it includes a third endorsement in blank from Wells Fargo. This copy of the allonge includes the eighteen-digit typed number that appears on the note and mortgage and the ten-digit number that is handwritten on the second copy of the note. Like the first copy of the allonge, it does not indicate the date of any endorsement.
The only information in the record about the date Wells Fargo acquired the note is found in a certification of Kyle N. Campbell, Wells Fargo's Vice President of Loan Documentation. It includes the following assertions relevant to the date Wells Fargo acquired the note.
1. . . . I have personally reviewed the business records of Wells Fargo as they pertain to the Loan . . . . The business records are maintained in the regular course of business[], and it is the regular practice of Wells Fargo to maintain these records.
. . . .
3. Wells Fargo obtained physical possession of the original Note on March 14, 2008.
4. The original Note was maintained by Wells Fargo [] at a secure location in Minneapolis, Minnesota until May 12, 2011, when it was sent to counsel for Wells Fargo, Reed Smith, LLP.
The documents appended to Campbell's certification, which Campbell characterized as "true and correct" without explaining the basis for the assertion, include, among others, the note and allonge, the mortgage, and the previously discussed September 9, 2009 assignment of the mortgage which is from MERS, as nominee of Majestic, its successors and assigns, to Wells Fargo.
There is no document or business record supporting Campbell's assertion that Wells Fargo obtained physical possession of the original note on March 14, 2008, despite the fact that Wells Fargo's responses to interrogatories indicate that it will provide all documents pertaining to "the purchase, sale or assignment of the mortgage loan." Thus, Campbell's assertion of Wells Fargo's possession of the note from March 14, 2008 forward is unsupported. The only document in the record fixing a date on which any pertinent interest was transferred or assigned is the September 9, 2009 assignment of the mortgage. That assignment is from MERS to Wells Fargo.
In opposing Wells Fargo's motion for summary judgment, defendants disputed Wells Fargo's possession of the note as of March 14, 2008. They claimed "upon information and belief" that "Fannie Mae is the actual holder and owner of the Note." A claim they supported with a certification of Margaret Lambe Jurow, Esq., of Legal Services. According to Jurow, after receiving papers from Wells Fargo on January 11, 2011, she searched "MERS public data base which identifies investors on notes related to its mortgages." The MERS data base listed "Fannie Mae and not Wells Fargo" as the investor for this loan.
Jurow also certified that she searched the "Fannie Mae lookup site," and it listed this loan "as being owned by Fannie Mae and not Wells Fargo." She provided a copy of what appears to be a printout of the information as it was displayed on the Fannie Mae site. That document depicts a request for information on this property by its address. It states: "Match Found. Based on the property information entered, it appears Fannie Mae owns a loan at this address."
Although the printout includes a disclaimer stating that Fannie Mae "makes no representation, warranty or guarantee regarding the accuracy or completeness of the results," explanatory material found apparently printed from the site states that match found "means that Fannie Mae owns a loan at the address entered in the search." This certification, like Campbell's, has certain deficiencies. For example, it does not include a certification that the document which appears to be a printout of the computer screen is a true copy.
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This record does not permit a finding that Wells Fargo took possession of the loan on March 14, 2008, and held it in a secure place thereafter until delivering it to Wells Fargo's attorneys on May 12, 2011. Campbell's certification is the only document in the record supporting those facts, and it suffers from many of the defects that this court found fatal in Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 599-600 (App. Div. 2011).
"A certification will support the grant of summary judgment only if the material facts alleged therein are based, as required by Rule 1:6-6, on 'personal knowledge.'" Id. at 599 (citing Claypotch v. Heller, Inc., 360 N.J. Super. 472, 489 (App. Div. 2003)). The closest Campbell's certification comes to alleging personal knowledge of the date on which Wells Fargo obtained physical possession of the original note and retained it until it was sent to Wells Fargo's attorneys is his allegation that he personally reviewed records maintained in the regular course of Wells Fargo's business. But knowledge gleaned from review of records is not "personal knowledge." It is knowledge based on hearsay statements included in records, which may or may not be admissible. See N.J.R.E. 803(c)(6) (setting forth the conditions for admission of hearsay included in business records).
Rule 1:6-6 permits an affiant to assert facts "which are admissible in evidence to which the affiant is competent to testify." It also permits an affiant to annex "certified copies of all papers or parts thereof" referenced in the affidavit. R. 1:6-6. Here, there were no copies of papers, let alone certified copies, supporting Campbell's bald assertion that Wells Fargo had possession of the note on and after March 14, 2008.
Because Campbell's certification is insufficient to permit a finding that Wells Fargo held the note when it served the several notices of intention, and because there is no dispute that the mortgage was assigned to Wells Fargo long after the notices of intention were served, we affirm the trial judge's determination that the notices of intention did not comply with the FFA.
We recognize that the judge also found that Wells Fargo had physical possession of the note on March 14, 2008. But for the reasons stated above, that finding lacks adequate support in the record submitted on the motion.
Because Wells Fargo presented the original note in the trial court, it is important to stress the limited significance of this opinion in order to avoid any potential for confusion. This order of dismissal without prejudice is not based on the merits of the foreclosure action and does not have any impact on the question of Wells Fargo's ability to foreclose as a holder of the note and mortgage. See Ford, supra, 418 N.J. Super. at 600-01. The order of dismissal without prejudice is based solely on Wells Fargo's failure to establish that it served notices of intention conforming with the requirements of the FFA, which it may correct by service of a notice that conforms with N.J.S.A. 2A:50-56(c)(11).
We have considered whether it would be appropriate to remand to permit the trial judge to determine whether a remedy other than dismissal without prejudice is appropriate in this case. Guillaume sets forth factors the trial court should consider in exercising its discretion to fashion an appropriate remedy for a defective notice of intention, and the judge did not have the benefit of that decision. 209 N.J. at 479. Because the briefs on appeal were filed after the Court's decision in Guillaume and Wells Fargo has not requested that relief, we decline to remand for reconsideration of the remedy
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION