PENNYMAC LOAN SERVICES, LLC v. JOHN F. LEE

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NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
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                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-0348-17T4

PENNYMAC LOAN
SERVICES, LLC,

          Plaintiff-Respondent,

v.

JOHN F. LEE, His Heirs, Devisees,
and Personal Representative and
His/Her, Their, or any of their
Successors in Right, Title and Interest,

          Defendant-Appellant,

and

MRS. LEE, Her Heirs, Devisees,
and Personal Representative and
His/Her, Their, or any of their
Successors in Right, Title and Interest,
JPMORGAN CHASE BANK, N.A.,
FORD MOTOR CREDIT COMPANY,
LLC, d/b/a LINCOLN AUTOMOTIVE
FINANCIAL,

     Defendants.
________________________________

                    Submitted October 30, 2018 – Decided November 13, 2018
            Before Judges Hoffman and Suter.

            On appeal from Superior Court of New Jersey,
            Chancery Division, Ocean County, Docket No. F-
            000850-16.

            John F. Lee, appellant pro se.

            Blank Rome, LLP, attorneys for respondent (Matthew
            M. Maher, on the brief).

PER CURIAM

      In this residential foreclosure action, defendant John Lee appeals from the

final judgment of foreclosure, the order granting summary judgment, and the

order denying his motion to vacate summary judgment. We conclude the trial

court properly rejected defendant's arguments that plaintiff PennyMac Loan

Services, LLC lacked standing to foreclose and violated the Home Ownership

Security Act of 2002,  N.J.S.A. 46:10B-22, (HOSA). We affirm.

      As part of a mortgage loan transaction, defendant executed and delivered

a $289,732 note to New Day Financial, LLC (New Day) on May 22, 2013. To

secure the note, defendant signed and delivered a mortgage on his home in Little

Egg Harbor Township to Mortgage Electronic Registration Systems, Inc.

(MERS), as nominee for New Day. The mortgage was recorded in July 2013.

MERS assigned the mortgage to plaintiff on October 22, 2015. The assignment


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was recorded the following month. The note was also transferred to plaintiff via

an allonge.

      Defendant defaulted on the note by failing to make the required payment

on April 1, 2015, and all subsequent payments. Plaintiff filed its foreclosure

complaint in January 2016.      Defendant filed an answer containing several

affirmative defenses, including lack of standing, violations of the Fair

Foreclosure Act, and unclean hands.

      Plaintiff's motion for summary judgment was granted in January 2017.

The court entered final judgment of foreclosure in June 2017 and later denied

defendant's motion for reconsideration.

      On appeal, defendant seeks reversal, asserting: 1) plaintiff lacked standing

to foreclose; and 2) plaintiff committed HOSA violations. We consider these

arguments de novo in a light most favorable to defendant as the non-moving

party. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am.,  142 N.J. 520, 540

(1995).

      To obtain relief in a mortgage foreclosure action, the mortgagee (or its

successor in interest) must establish 1) the mortgage and loan documents are

valid; 2) the mortgage loan is in default; and 3) it has a contractual right to

foreclose in light of the default. See, e.g., Great Falls Bank v. Pardo, 263 N.J.


                                                                          A-0348-17T4
                                         3 Super. 388, 394 (Ch. Div. 1993), aff'd,  273 N.J. Super. 542 (App. Div. 1994).

The mortgagee has the right to insist upon strict observance of the obligations

contractually owed to it, including timely payment. Kaminski v. London Pub,

Inc.,  123 N.J. Super. 112, 116 (App. Div. 1973).

      Here, plaintiff owned the note and the mortgage via an allonge and

assignment from New Day and MERS, respectively.                Combined with the

defendant's failure to make the requisite payments, plaintiff had the right to

enforce the mortgage and notes by way of foreclosure.

      Defendant's standing argument is based on plaintiff's sale of the loan to

Massachusetts Mutual Life Insurance Company in February 2016. However,

the sale of the loan did not occur until after plaintiff filed its complaint. "[W]hen

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." Capital One, N.A. v. Peck,  455 N.J. Super. 254, 259

(App. Div. 2018). Here, plaintiff demonstrated possession of both the note and

mortgage at the time it filed its complaint. Thus, the subsequent sale of the loan

did not destroy plaintiff's standing.

      Defendant also argues plaintiff lacked standing, claiming the notice of

intent to foreclose sent to defendant misstated plaintiff as the lender. The record


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does not support this claim; however, even assuming defendant is correct, the

fact that the lender is misnamed is not a valid defense to a foreclosure action.

See U.S. Bank Nat'l Ass'n v. Guillaume,  209 N.J. 449, 480 (2012).

      Lastly, defendant argues plaintiff violated HOSA by charging excessive

late fees. Under HOSA, late fees may not exceed five percent of the amount of

the past due payment.      N.J.S.A. 46:10B-25(d).     Defendant failed to offer

competent proof that plaintiff imposed any late fees not authorized by HOSA.

      To the extent we have not addressed any other argument raised by

plaintiff, we deem such arguments to lack sufficient merit to warrant comment

in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.




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