On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. F-20687-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted August 24, 2011
Before Judges Lihotz and Baxter.
Defendant, Milka Momanyi, appeals from the January 6, 2010 final judgment foreclosing her interest in real property located on Long Street in Jersey City (subject realty). The subject realty was owned by Bartholomew Momanyi, who took title prior to his marriage to Milka.*fn1 Thereafter, Bartholomew vacated the residence while Milka continued to reside in the home, but she was not paying the mortgage.
Foreclosure was commenced by Property Asset Management, Inc., (PAM) a wholly owned subsidiary of Lehman Brothers Bank, FSB (Lehman). PAM is the assignee of the original mortgagee, Accredited Home Lenders, Inc. (AHL). After several procedural motions, Milka was permitted to contest the foreclosure. She filed an answer and counterclaim, asserting PAM lacked standing to proceed, and, relying on N.J.S.A. 3B:28-3, argued that plaintiff's complaint violated her right of joint possession in the marital home. Milka also filed a third-party complaint against AHL alleging violations of the Truth in Lending Act, 15 U.S.C.A. §§ 1601-1667(f) (TILA) and New Jersey's Home Ownership Security Act of 2002, N.J.S.A. 46:10B-22 to -35 (HOSA). The chancery court rejected each of these arguments, dismissed the third-party complaint for failure to state a claim for relief, ordered the summary judgment dismissal of Milka's answer and counterclaim, and entered a final judgment of foreclosure.
On appeal, Milka renews the arguments presented to the trial court. We affirm the trial court's determination that PAM had standing to proceed as the party in interest in the foreclosure. We also conclude the third-party complaint was properly dismissed. However, the record is insufficient to determine whether Milka's claims under N.J.S.A. 3B:28-3 were extinguished. Therefore, in the absence of an adequate factual record, summary judgment was improvidently granted. We reverse the October 20, 2008 order granting summary judgment to PAM as well as the January 6, 2010 final judgment of foreclosure based upon that order. We remand for further proceedings as discussed in this opinion.
The subject realty was purchased by Bartholomew on March 13, 2003. However, the grantee recorded on the March 13, 2003 deed was "Bartholomew Momanyi, married." The initial purchase money mortgage, in the approximate amount of $123,000, was held by Freemont Investment and Loan. Bartholomew and Milka married in a civil ceremony on April 22, 2003, some six weeks after Bartholomew had purchased the property. Milka asserts she provided $22,000 toward the purchase of the subject realty and made the mortgage payments thereafter.
On April 4, 2005, Bartholomew alone refinanced the mortgage obligation, increasing the indebtedness to $233,750. He completed a second refinance on November 23, 2005. In this transaction, Bartholomew, but not Milka, executed an adjustable rate note in the amount of $274,500. The indebtedness was secured by a mortgage held by third-party defendant, AHL, through its nominee Mortgage Electronic Registration Systems, Inc. The recorded mortgage reflects Milka's name had initially been included on the document, but Bartholomew crossed it off and initialed the change. Additionally, Bartholomew executed a corrective deed "[t]he purpose [of which was] to correctly vest title in the proper marital status of Bartholomew Momanyi, unmarried." On December 2, 2005, Bartholomew vacated the residence and Milka continued to reside in the home with the parties' children.
Milka did not remain current on the mortgage obligation and defaulted on August 1, 2006. Since the default, the mortgage has not been paid.*fn2 PAM commenced foreclosure on November 8, 2006. The complaint named "Bartholomew Momanyi and Mrs. Bartholomew Momanyi, his wife" as defendants. After entry of default, a final judgment of foreclosure was filed on February 15, 2007.
During this time another action involving Milka and Bartholomew was pending. Milka filed a complaint for divorce on November 29, 2006. On April 2, 2007, Bartholomew answered and filed a counterclaim for divorce, which stated he resided on Garfield Avenue in Jersey City. Because the parties failed to prosecute their respective claims, the court dismissed the pleadings, without prejudice, on March 20, 2008.
In January 2007, prior to dismissal of her divorce complaint, Milka moved to vacate the default judgment entered in the foreclosure action and contested PAM's standing to proceed with foreclosure. Her request to vacate the default was granted and, by order dated January 8, 2008, she was permitted to file a contesting answer. She also filed a counterclaim against PAM and a third-party complaint against AHL. In an amended answer, Milka asserted she retained the statutory right of joint possession in the subject realty provided for in N.J.S.A. 3B:28-3. AHL's motion to dismiss Milka's third-party complaint for failure to state a claim for relief was granted. PAM then filed a motion for summary judgment, which Milka opposed with a motion to dismiss for lack of standing. The trial judge ordered an evidentiary hearing to discern the owner of record of the mortgage debt.
It is common for a mortgage lender to employ a servicing agent to tackle day-to-day tasks regarding a residential loan including the monthly collection of mortgage payments from the borrower, responding to the borrower's inquiries, maintaining the principal and interest allocation, remitting quarterly tax payments and maintaining property and casualty insurance. Oftentimes, loan servicers also address delinquent payments with a borrower and initiate foreclosure actions. In this matter, Jaime Walls, a foreclosure litigation specialist for Wells Fargo Home Mortgage, d/b/a American Servicing Company (ASC), was the only testifying witness during the evidentiary hearing. Walls stated ASC was servicing the loan for PAM, the wholly owned subsidiary of Lehman, through a pooling and service agreement. Walls testified Lehman purchased the loan with a pool of other loans from AHL on June 19, 2006, as reflected in an assignment and conveyance agreement admitted into evidence. AHL then executed an assignment of its interest to PAM on December 4, 2006, which was recorded on March 26, 2007.
Walls stated PAM was owned by Lehman. To support this, Walls identified two documents she obtained: first, a certificate from the Delaware Secretary of State showing PAM had formerly been known as LB Real Properties Corp. II, and second, a statement from Aaron Guth, acting Assistant Secretary of Lehman Brothers Holdings, Inc., a Delaware corporation (LBHI), stating LBHI owns Lehman ALI, Inc. (ALI), a mortgage investment subsidiary of Lehman, which has owned PAM as a wholly owned subsidiary since November 16, 1989. ASC had serviced the loan since August 1, 2006. Walls called its agent and verified the original note was held in the corporate origination file. At the close of evidence, the court reserved its opinion.
On October 20, 2008, the chancery court, in an oral opinion, granted summary judgment in favor of PAM, striking and suppressing Milka's defenses and allowing the complaint to proceed as an uncontested action. Final judgment of foreclosure was entered on January 6, 2010.
On appeal, Milka challenges as error, the trial judge's determination that PAM was the proper party to proceed with foreclosure, noting PAM recorded its assignment after the foreclosure complaint was filed. She also argues her statutory right under N.J.S.A. 3B:28-3 allows her continued occupancy of the subject realty which cannot be defeated by the foreclosure judgment. Further, she maintains her ...