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Countrywide Home Loans Servicing Lp v. Victor J. Munguia


March 11, 2011


On appeal from the Superior Court of New Jersey, Chancery Division, Union County, Docket No. F-14886-08.

Per curiam.


Argued February 8, 2011

Before Judges Parrillo and Yannotti.

Defendant Victor J. Munguia (Munguia) appeals from an order entered by the Chancery Division on June 29, 2010, which denied his motion to vacate the final judgment of foreclosure entered in this action on November 13, 2009, and set aside the sheriff's sale which was held on June 2, 2010. We affirm.

Plaintiff Countrywide Home Loans, Inc., filed an action against Munguia and his wife, seeking to foreclose on a mortgage upon defendants' real property in Union, New Jersey. Defendants were served with the complaint, but did not file an answer and, on June 2, 2008, default was entered against them. By letter dated June 9, 2008, plaintiff's attorney provided defendants with notice of default and informed them of their right to cure the default within forty-days, as provided in the Fair Foreclosure Act, N.J.S.A. 2A:50-58a(2).

On February 27, 2009, plaintiff filed a motion, with notice to defendants, seeking entry of a final judgment of foreclosure. Defendants did not oppose the motion. The court entered a final judgment on November 13, 2009, fixing the amount due under the mortgage and directing that the Union County Sheriff undertake a sale of the mortgaged property. On November 19, 2009, plaintiff served a copy of the final judgment upon defendants. The sheriff scheduled the sale for February 3, 2010, and notice of the sale was sent to defendants.

Defendants thereafter adjourned the sale to March 3, 2010. On February 24, 2010, defendants filed an emergent application in the trial court to stay the sale. The court entered an order dated February 24, 2010, staying the sale until March 31, 2010, and ordering the parties to participate in the court-associated foreclosure mediation process. The sale was subsequently adjourned again, and the parties attended a mediation session on May 4, 2010, but could not resolve the matter.

The sheriff's sale was re-scheduled for May 12, 2010, and then June 2, 2010. On May 28, 2010, defendants filed an emergent motion to adjourn the June 2, 2010, sale. The court denied the motion. On June 1, 2010, defendants filed a motion to vacate the final judgment of foreclosure and to stay the sheriff's sale. The sale went forward on June 2, 2010. Plaintiff opposed the motion. The court entered an order dated June 29, 2010, denying defendants' motion.

On appeal, defendant argues: 1) illegal lending practices are activities that the law does not protect; 2) only the present and current mortgage holder has legal standing in a foreclosure action; and 3) defendants were not afforded due process and, as a result, the "whole case is null and void."

In our view, defendant's arguments are "without sufficient merit to warrant discussion in a written opinion." R. 2:11-3(e)(1)(E). However, we add the following brief comments.

As noted previously, defendants filed a motion seeking to vacate the court's final judgment, which had been entered by default. An application to vacate a default judgment is "viewed with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached." Marder v. Realty Constr. Co., 84 N.J. Super. 313, 319 (App. Div.), aff'd, 43 N.J. 508 (1964). Even so, a default judgment will not be disturbed unless the defendant's failure to answer was excusable under the circumstances and defendant has a meritorious defense. Id. at 318.

Here, defendants failed to establish that their failure to file a timely answer to the complaint was due to excusable neglect. The record shows that defendants were served with the summons and complaint, the notice of default and the notice of motion for entry of a final judgment by default. Though defendants exercised their statutory right to adjourn the first-scheduled sheriff's sale, they took no further action in this case until February 24, 2010, when they filed an emergent motion to stay the sheriff's sale scheduled for March 3, 2010.

Moreover, defendants failed to show that they had a meritorious defense to the foreclosure action. Defendant asserts that plaintiff does not have standing to pursue a foreclosure action. However, the mortgage was initially issued to Mortgage Electronic Registration Systems, Inc., as nominee for Hogar Mortgage and Financial Services, Inc. (Hogar).

The mortgage and the assignment were recorded in the Office of the Clerk of Union County on July 13, 2007. On April 15, 2008, Hogar assigned the mortgage to plaintiff, and provided notice of the assignment to defendants. Thus, plaintiff had standing to pursue the foreclosure.

Defendant also argues that he was the victim of "predatory lending", in violation of the Truth in Lending Act, 15 U.S.C.A. §§ 1601 to -67 (TILA), and was denied due process of law. Defendant's TILA claim is without support in the record. Moreover, defendant was afforded all of the process due under the circumstances.



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