NATION STAR MORTGAGE, LLC v. JOHN D. ARMSTRONG

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NOT FOR PUBLICATION WITHOUT THE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.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3795-16T1

NATIONSTAR MORTGAGE, LLC,
d/b/a CHAMPION MORTGAGE
COMPANY,

Plaintiff-Respondent,

JOHN D. ARMSTRONG, Heir and
Administrator for the Estate
of LULU B. ARMSTRONG,

Defendant-Appellant.
______________________________

Argued February 27, 2018 – Decided March 20, 2018

Before Judges Reisner and Mayer.

On appeal from Superior Court of New Jersey,
Chancery Division, Union County, Docket No.
F-047868-10.

John D. Armstrong, appellant, argued the cause
pro se.

Matthew Eyet argued the cause for respondent
(Sandelands Eyet, LLP, and McCabe, Weisberg &
Conway, LLC, attorneys; James A. French, on
the brief).

PER CURIAM
Defendant John D. Armstrong, who is the heir and administrator

of the estate of his mother, Lulu B. Armstrong, appeals from a

March 31, 2017 final judgment of foreclosure. On this appeal, he

raises the following points of argument:

I. PLAINTIFF FAILED TO SERVE AND DELIVER TO
THE [IMMEDIATE] FAMILY, HEIRS, PERSONAL
REPRESENTATIVES AND DEFENDANTS THE REQUIRED
NOTICE OF INTENT TO FORECLOSE IN VIOLATION OF
THE FAIR FORECLOSURE ACT (FFA) – N.J.S.A.
2A:50-56 / 2A:50-53 ET SEQ.

II. PLAINTIFF FAILED TO COMPLY WITH RULE 4:64-
1(B)(11) WHEN CONSTRUCTING ITS CONTENT OF
MORTGAGE FORECLOSURE COMPLAINT WHICH VIOLATED
R. 4:64-1(B)(11).

III. PLAINTIFF FAILED TO FILE THE REQUIRED
ATTACHMENT KNOWN AS THE CERTIFICATION OF
DILIGENT INQUIRY FORM WITH ITS FORECLOSURE
COMPLAINT IN VIOLATION OF R. 4:64-1(A)(2) AND
R. 1:5-6(C).

IV. THE ORIGINAL PLAINTIFF METLIFE BANK, NA
ASSIGNED THE ORIGINAL MORTGAGE AND NOTE TO
FANNIE MAE BEFORE IT FILED ITS FORECLOSURE
COMPLAINT AS EVIDENCED BY THE ASSIGNMENT OF
MORTGAGE AND ALLONGE DATED JUNE 10, 2009 TO
FANNIE MAE.

V. THE HONORABLE TRIAL COURT HAS ERRED BY
[FAILING] TO HEAR, CURE, QUASH OR ADJUDICATE
THE DEFENDANT[']S MAY 13, 2014 MOTION FILING,
WHICH PROMPTED THE [TRIAL COURT] TO VACATE A
2
014 FINAL.J.DGMENT ORDER ON AUGUST 25[,]
2015. THE [TRIAL COURT] DECISION WAS BASED
ON THE COURT[']S PROCEDURAL ERROR TO HEAR THE
DEFENDANT[']S MOTION FILED ON MAY 13, 2014.

VI. ON REMAND, IF GRANTED THIS MATTER SHOULD
RESPECTFULLY BE HEARD BY A DIFFERENT JUDGE.

2 A-3795-16T1
After reviewing the record in light of the applicable legal

standards, we conclude that, with the exception of defendant's

Point I, his appellate arguments are without sufficient merit to

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

As to Point I, our review of the trial court's interpretation

of the Fair Foreclosure Act (FFA),
N.J.S.A. 2A:50-56, is de novo.

See D'Agostino v. Maldonado,
216 N.J. 168, 182-83 (2013). We

agree with defendant that, before filing suit, plaintiff was

required to serve the mortgagor's estate administrator with a

notice of intent to foreclose (NOI), pursuant to the FFA,
N.J.S.A.

2A:50-56. We reject the argument - asserted by plaintiff and

accepted by the trial court - that plaintiff was not required to

serve a NOI because the residential mortgage at issue was a reverse

mortgage. We remand the case to the trial court for further

proceedings consistent with this opinion.

In light of the issue to be addressed, we provide only a

brief summary of the background. On June 10, 2009, defendant,

acting on his mother's behalf, obtained in her name a $525,000

reverse mortgage, secured by her home in Cranford. Defendant

signed his mother's name to the loan documents as her "attorney

in fact." His mother died on September 2, 2009.

3 A-3795-16T1
As required by federal law, on October 5, 2009, plaintiff

sent defendant, as administrator of the estate, a notice advising

him of "the options that are available to the estate for satisfying

the loan balance" and avoiding foreclosure. See 24 C.F.R. §

206.125(a)(2). Those options included paying off the outstanding

balance in full within thirty days. After the estate failed to

satisfy the loan balance, plaintiff filed a foreclosure complaint,

naming defendant's mother and her "heirs," on September 29, 2010.

The complaint was later amended to add defendant and his wife.

Defendant filed an answer to the complaint, and after

extensive motion practice, the court dismissed the answer and

entered a final judgment of foreclosure. Among many other issues,

defendant raised plaintiff's failure to serve a NOI. The trial

court agreed with plaintiff's argument, that when the mortgagor

on a reverse mortgage dies, the lender has an absolute right to

obtain the property, with no right to cure, and therefore a NOI

is not required.

After the foreclosure judgment was entered, the property was

scheduled for a sheriff's sale, which we stayed pending this

appeal.

The FFA requires a lender to serve a NOI before accelerating

a residential mortgage loan or instituting a foreclosure action:

4 A-3795-16T1
Upon failure to perform any obligation of a
residential mortgage by the residential
mortgage debtor and before any residential
mortgage lender may accelerate the maturity
of any residential mortgage obligation and
commence any foreclosure or other legal action
to take possession of the residential property
which is the subject of the mortgage, the
residential mortgage lender shall give the
residential mortgage debtor notice of such
intention at least 30 days in advance of such
action as provided in this section.

[N.J.S.A. 2A:50-56(a).]

In construing the statute, we first consider "the literal

language of the statute, consistent with the Legislature's

admonition that its words and phrases 'shall be read and construed

with their context, and shall, unless inconsistent with the

manifest intention of the legislature or unless another or

different meaning is expressly indicated, be given their generally

accepted meaning, according to the approved usage of the

language.'" US Bank Nat. Ass'n v. Guillaume,
209 N.J. 449, 471

(2012) (quoting
N.J.S.A. 1:1-1). "To the extent possible, the

Court must derive its construction from the Legislature's plain

language. If the language chosen by the Legislature is

unambiguous, then the Court's 'interpretive process is over.'"

Ibid. (citations omitted).

5 A-3795-16T1
As noted, the FFA, by its terms, requires service of a NOI

prior to the institution of any residential foreclosure action.1

The statute contains no exception for reverse mortgages, and

reading an exception into the statute would be contrary to its

fundamental purpose, which is to allow property owners to avoid

losing their property to foreclosure.2 The FFA effectuates the

Legislature's stated intent that "homeowners should be given every

opportunity to pay their home mortgages, and thus keep their

homes."
N.J.S.A. 2A:50-54. "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,
209 N.J. at 470.

Plaintiff concedes that some events of default under a reverse

mortgage – for example, the mortgagor's failure to pay property

1
As plaintiff's attorney indicated at oral argument, in the case
of an ordinary, non-reverse mortgage, the lender serves the NOI
on a deceased mortgagor's estate administrator. See
N.J.S.A.
3B:10-30 (giving the estate administrator "the same power over the
title to property of the estate that an absolute owner would have,
in trust however, for the benefit of the creditors and others
interested in the estate.").
2
Where the Legislature intended to carve out an exception to the
FFA's requirements, it did so in explicit language. For example,
the FFA specifically states that its provisions "shall not apply
to the foreclosure of a non-residential mortgage."
N.J.S.A. 2A:50-
62.

6 A-3795-16T1
taxes – are curable and that a NOI must be served in that situation.

But plaintiff argues that a NOI need not be served where, as here,

the debtor on a reverse mortgage has died, because the mortgagor's

death constitutes an incurable event of default. We cannot agree.

The FFA, by its terms, does not require that the default be curable

by a means other than paying off the loan, before a NOI is required.

As in this case, the default can be cured, and the property

saved from forfeiture, by payment of the mortgage balance. In

fact, federal law gives the debtor's estate the right to make the

payment. See 24 C.F.R. § 206.125(a)(2)(i). For that reason,

federal law requires the mortgagor on a reverse mortgage to serve

the debtor's estate administrator with notice of the right to pay

off the mortgage balance and save the property from foreclosure.

24 C.F.R. § 206.125(a)(2). Thus, plaintiff served defendant with

the federally-required notice.

We also cannot accept plaintiff's further argument that the

federal notice obligation replaces any state obligation to serve

the NOI in this case. The lender's obligation to serve the NOI

"is independent of any other duty to give notice under the common

law, principles of equity, State or federal statute, or rule of

court and of any other right or remedy the debtor may have as a

result of the failure to give such notice."
N.J.S.A. 2A:50-56

(e). Hence, the lender's obligation to serve a federally-required

7 A-3795-16T1
notice on a reverse mortgagor's estate does not relieve the lender

of the obligation to also serve the NOI under the FFA.

Accordingly, plaintiff was obligated to serve the NOI on defendant,

as his mother's estate administrator.

We next consider the appropriate remedy for the failure to

serve the NOI. The court has some discretion in that regard. For

example, "a court adjudicating a foreclosure action in which

N.J.S.A. 2A:50-56(c)(11) is violated may dismiss the action

without prejudice, permit a cure or impose such other remedy as

may be appropriate to the specific case . . . ." Guillaume,
209 N.J. at 458. In this case, defendant received the federally-

required notice of the right to pay off the mortgage in 2009, but

took no action to pay it off. Moreover, defendant has greatly

delayed the foreclosure by filing numerous, repetitive motions,

leading to the imposition of sanctions and an order precluding him

from filing further motions without the vicinage Assignment

Judge's approval.

We conclude that the appropriate remedy here is a brief stay

rather than dismissal of the foreclosure action without prejudice.

We therefore remand this case to the trial court with direction

to enter an order staying the foreclosure case for thirty days,

to give defendant another chance to pay off the mortgage. If

8 A-3795-16T1
defendant does not pay off the mortgage, the sheriff's sale may

proceed.3

Remanded. We do not retain jurisdiction.

3
Our stay of the sheriff's sale shall remain in effect until the
trial court enters its stay order on remand.

9 A-3795-16T1

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