On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. F-32384-07.
The opinion of the court was delivered by: Reisner, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Reisner, Yannotti*fn1 and Harris.
The opinion of the court was delivered by REISNER, P.J.A.D.
Defendants Conrad and Irene Russo appeal from a December 7, 2011 order denying their application to further restrain a sheriff's sale, and denying as untimely their motion to vacate a final judgment of foreclosure entered on March 17, 2009 in favor of plaintiff Deutsche Bank National Trust Company. We affirm.
On July 13, 2006, defendants refinanced the existing mortgage on their home by executing a note and mortgage in the amount of $458,700 in favor of Mortgage Electric Registration Systems, Inc. (MERS) as nominee for Countrywide Home Loans, Inc. (Countrywide). The note disclosed, in large capital letters, that it was an "interest only" loan. Its terms produced a lower monthly mortgage payment for five years, followed by a significantly higher monthly payment beginning after the fifth year. According to defendants, as part of the loan package, $31,000 in points and fees were added to the principal balance of the loan.*fn2 They contend that they did not realize the mortgage would increase their principal indebtedness and would eventually result in higher monthly payments. However, defendants defaulted on the loan long before they were required to begin repaying the principal or making the higher monthly payments. On June 1, 2007, less than a year into the mortgage term, defendants stopped making payments.
Plaintiff sent defendants a Notice of Intention to Foreclose by certified mail on September 24, 2007. Irene Russo signed the certified mail receipt. Plaintiff filed the foreclosure complaint on November 27, 2007. There is no dispute that the complaint was properly served on defendants on January 24, 2008. They failed to file an answer, and default was entered on June 3, 2008. After serving defendants with the required notice of intent to enter a final judgment, plaintiff obtained a final foreclosure judgment on March 17, 2009. There is no dispute that defendants were aware that the final judgment had been entered.
A sheriff's sale was first scheduled to take place on May 24, 2010, but was adjourned because Conrad Russo filed for bankruptcy on May 19, 2010. The Bankruptcy Court granted him a discharge on September 17, 2010. For various reasons, the sheriff's sale was adjourned a total of seventeen times. Finally, on July 5, 2011, defendants filed their first pleading in the foreclosure action, an order to show cause seeking to stay the sheriff's sale and seeking to vacate the 2009 final judgment of foreclosure pursuant to Rule 4:50-1(d) and (f).*fn3
In their motion, defendants argued that plaintiff lacked standing to file the foreclosure complaint, because it did not take an assignment of the mortgage until after the complaint was filed. The motion record filed with the trial court disclosed the following information. Countrywide, now doing business as Bank of America, has continued to service the loan since it originated on July 13, 2006. However, on August 15, 2006, the relevant collateral file was allegedly transferred to Wells Fargo Bank M.N., and was then transferred to Wells Fargo Bank N.A., the servicer and custodian for the current plaintiff Deutsche Bank, on October 31, 2006. However, an assignment acknowledging Deutsche Bank as the legal possessor of the note and mortgage was not signed and recorded until June 17, 2008, seven months after the complaint was filed.
In a lengthy oral opinion placed on the record on December 6 and 7, 2011, Judge Thomas W. Cavanagh, Jr. held that defendants had not filed their Rule 4:50 motion within a reasonable time after entry of the foreclosure judgment. He further found that they produced no proof of excusable neglect for their failure to file a timely answer to the complaint or for the years of delay in filing their motion. He also rejected their standing argument, accepting plaintiff's proof that it had possession of the note at the time the foreclosure complaint was filed. In fact, the trial judge stated that he had required plaintiff to produce a certified copy of the note itself:
Now, the track of title here, according to the person rendering the certification, who says that she did so on personal knowledge, and the information compiled in her cert was done [from] the business records, which were recorded by people with personal knowledge of the information, or from persons transmitting personal knowledge, goes as follows. The original loan was given to the defendants in 2006, and Mr. Russo executed a note to Countrywide Home Loans, Inc. The mortgage was parked at MERS as nominee for Countrywide, which is something that occurs frequently. Countrywide ultimately was absorbed into Bank of America, N.A., and Countrywide continued to service the loan since the date of origination. On August 15, 2006, the collateral file was transferred to Wells Fargo. The collateral was then transferred to Wells Fargo Bank, the servicer and custodian for Deutsche Bank National Trust Company as trustee on behalf of HSI. That is, of course, the plaintiff in this case. That occurred on October 31, 2006. Wells Fargo is the servicer and custodian for the owner of the note, which is the Deutsche Bank Securitized Trust. The plaintiff purchased the note in 2006, and is the owner of the note pursuant to the consideration which was paid for the note in 2006. Under U.C.C. Section 3-301, a person entitled to enforce the obligation is either a holder, or a non-holder in possession who has ...