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Hsbc Bank Usa, National Association v. Fidel Vasquez and Antonia Vasquez

October 19, 2011

HSBC BANK USA, NATIONAL ASSOCIATION,
AS TRUSTEE FOR HOME EQUITY LOAN TRUST SERIES ACE 2006-HE1, PLAINTIFF-RESPONDENT,
v.
FIDEL VASQUEZ AND ANTONIA VASQUEZ, DEFENDANTS-APPELLANTS.



On appeal from Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. F-16966-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted September 21, 2011 -

Before Judges J. N. Harris and Koblitz.

Defendants Fidel and Antonia Vasquez appeal from the motion judge's December 23, 2009 order denying their motion to vacate the September 3, 2009 sheriff's sale of their foreclosed property to plaintiff-mortgagee, HSBC Bank USA, National Association, as trustee for Home Equity Loan Trust Series Ace 2006-HE1 (HSBC). Defendants' motion to vacate was premised on an allegation that they were victims of a mortgage rescue fraud perpetrated by real estate broker, Frank De La Rosa.*fn1 Defendants argue that De La Rosa's fraud prevented them from completing a loan modification or filing for bankruptcy protection and should therefore result in vacation of the sale. The motion judge denied defendants' motion, explaining that fraud perpetrated by a third party did not justify vacating the sheriff's sale.

Defendants also maintain for the first time on appeal that they did not receive plaintiff's July 30, 2009 letter informing them that the sheriff's sale was rescheduled for September 3, 2009. After reviewing the record in light of the contentions advanced on appeal, we affirm.

On September 9, 2005, Fidel Vasquez borrowed $368,000 individually from FGC Commercial Mortgage Finance, dba Fremont Mortgage (Fremont), to purchase their home. Defendants secured this loan collectively with a purchase money mortgage on their property, located on 17th Street in Union City. The mortgage was executed in favor of Mortgage Electronic Registration Systems, Inc., as nominee for Fremont, and was later assigned to plaintiff HSBC on April 28, 2008.

Due to defendants' financial setbacks, their loan went into default as of January 1, 2008. Plaintiff filed its foreclosure complaint on April 30, 2008. Antonia Vasquez was personally served on May 10, 2008. After entry of default on the foreclosure complaint, final judgment in favor of plaintiff and a writ of execution were entered on November 17, 2008, directing that the property be sold by sheriff's sale, with the proceeds to be paid to plaintiff.

Antonia Vasquez contacted family friend and real estate broker De La Rosa. Defendants assert that De La Rosa agreed to help them seek either a loan modification, a short sale of the property, or file a bankruptcy petition. Defendants also claim that De La Rosa recommended that they consult with Anthony F. Sarsano, Esq., who served as their counsel when purchasing the house. Defendants had no direct contact with Sarsano or his staff at this time, instead communicating with him through De La Rosa. Antonia Vasquez issued three checks payable to De La Rosa in the total amount of $6000, which he agreed to give to Sarsano as payment for legal services.

Sarsano indicated that De La Rosa spoke with the attorney's staff. However, none of the money given by defendants to De La Rosa was ever delivered to Sarsano. Sarsano's office administrator certified that De La Rosa then indicated that defendants were no longer pursuing the matter and thus Sarsano's legal services were no longer required. After the sheriff's sale, defendants sought help directly from Sarsano. He provided pro bono representation to defendants for their motion to vacate the sheriff's sale. Neither defendants nor Sarsano were able to locate De La Rosa.

The sheriff's sale was initially scheduled for May 21, 2009. Defendants exercised their two statutory adjournments pursuant to N.J.S.A. 2A:17-36, thereby postponing the sale until June 25, 2009. After several more adjournments by plaintiff, the sheriff's sale was set for September 3, 2009. Plaintiff's counsel sent a letter through regular mail to both Antonia and Fidel Vasquez informing them of this final change in date.

Defendants claim for the first time on appeal that they did not receive this letter. They also indicate that they were out of the country on September 3, 2009 when the sheriff's sale occurred. They assert that they returned on September 9, 2009 and learned that their house had been sold to plaintiff. The deed was delivered to plaintiff on September 28, 2009 and was recorded on October 20, 2009.*fn2

"Because foreclosure proceedings seek primary or principal relief which is equitable in nature," and because no error of law is alleged here, the "application to open, vacate or otherwise set aside a foreclosure judgment or proceedings subsequent thereto is subject to an abuse of discretion standard." United States v. Scurry, 193 N.J. 492, 502-03 (2008) (citing Wiktorowicz v. Stesko, 134 N.J. Eq. 383, 386 (E. & A. 1944)). A trial judge's application or denial of equitable remedies should not be disturbed "unless it can be shown that the trial court palpably abused its discretion, that is, that its finding was so wide off the mark that a manifest denial of justice resulted." Green v. N.J. Mfrs. Ins. Co., 160 N.J. 480, 492 (1999) (internal quotation omitted).

A motion to vacate a sheriff's sale is governed by Rule 4:65-5, which states that any objection to the sale must be served within the ten days following the sale or before delivery of the deed, whichever is later. "Examples of valid grounds for objection include fraud, accident, surprise, irregularity, or impropriety in the sheriff's sale." Brookshire Equities v. Montaquiza, 346 N.J. Super. 310, 317 (App. Div.), ...


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