April 25, 2018
appeal from Superior Court of New Jersey, Chancery Division,
Essex County, Docket No. F-005201-13.
Nicolas A. Stratton argued the cause for appellant (Stratton
Stepp, LLP, attorneys; Nicolas A. Stratton, on the brief).
Danielle Weslock argued the cause for respondent (McCarter
& English, LLP, attorneys; Joseph Lubertazzi, Jr., of
counsel and on the brief; Danielle Weslock, on the brief).
Judges Fuentes, Koblitz, and Manahan.
appeal of an August 26, 2016 final residential foreclosure
judgment, defendant James I. Peck, IV contends that, after the
promissory note, without the mortgage, was sold to Freddie
Mac, and Capital One, N.A. (CONA) became the loan servicer on
behalf of Freddie Mac, CONA could not foreclose on his home
because it did not possess the note and a valid assignment of
mortgage at the time it filed the complaint. He argues that
only Freddie Mac had standing to foreclose. Although we agree
that in these unusual circumstances where one entity owns the
note and another the mortgage, both the note and a valid
mortgage assignment are required to foreclose, we affirm in
spite of certain irregularities.
Mac's form 10-K annual report pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 provides the
following information. The Federal Home Loan Mortgage
Corporation, known as Freddie Mac, is a government sponsored
enterprise (GSE) chartered by Congress in 1970. Its public
mission is to provide liquidity, stability and affordability
to the United States housing market. It does this primarily
by purchasing residential mortgage loans originated by
lenders. It does not originate loans or lend money directly
to mortgage borrowers. United States Securities and Exchange
Commission, Form 10-K, "Federal Home Loan Mortgage
6214180000 20/a20174q10k.htm (last visited May 29, 2018).
March 10, 2005, defendant executed a promissory note to Chevy
Chase Bank, F.S.B., (CCB) which was secured by a residential
mortgage by Mortgage Electronic Registration Systems, Inc.
(MERS), for $258, 750. On July 28, 2005, CCB sold defendant's
note to Freddie Mac, but retained the mortgage. In July 2009,
CCB converted to a national bank and merged with CONA.
Defendant defaulted on the loan in 2010, and did not pay the
mortgage or taxes after that date. The original mortgage
states: "MERS is a separate corporation that is acting
solely as a nominee for [l]ender and [l]ender's
successors and assigns." MERS, which also states in the
"Assignment of Mortgage" that it is "acting
solely as nominee for [CCB], its successors and assigns,
" assigned the mortgage to CONA on February 9, 2011,
more than one year after CCB merged into CONA.
least since July 15, 2009, defendant received repeated
notices that identified CONA as the servicer on the loan,
although Freddie Mac remained the investor. Defendant also
conceded that he made payments to CONA. In June 2012, the
court dismissed without prejudice an earlier foreclosure
proceeding initiated by CONA, F-003445-11, because CONA
failed to comply with the court-ordered deposition of an
employee who could provide information about possible
mortgage irregularities. CONA brought the original note to
court in that proceeding. The note was subsequently returned
to Freddie Mac later in 2012.
February 15, 2013, CONA initiated the present foreclosure
proceedings. The court dismissed the contesting answer on
June 9, 2015, and referred the case to the Office of
Foreclosure for entry of final judgment as uncontested. R.
4:64-1. Defendant's motion for reconsideration was denied
on May 5, 2016 and his subsequent motion for summary judgment
was denied on November 25, 2016, after defendant's
death. Defendant appeals from the entry of final
judgment arguing that CONA lacked standing to foreclose.
review is de novo, applying the same legal standard as the
trial court. Conley v. Guerrero, 228 N.J. 339, 346
(2017). Summary judgment must be granted "if the
pleadings, depositions, answers to interrogatories and
admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact
challenged and that the moving party is entitled to a
judgment or order as a matter of law." Templo Fuente
De Vida Corp. v. Nat'l Union Fire Ins. Co. of
Pittsburg, 224 N.J. 189, 199 (2016) (quoting R.
4:46-2(c)). If all the contesting pleadings have been
stricken or otherwise deemed noncontesting, an action to
foreclose a mortgage is deemed uncontested. R. 4:64-1(c)(3).
argues that because "Freddie Mac is the owner of
[d]efendant's loan, " it "is the only entity
with the right to enforce the mortgage." He further
argues that in order to validly assign a mortgage, the
"assignment must contain evidence of the intent to
transfer one's rights." (quoting K. Woodmere
Assocs., LP v. Menk Corp., 316 N.J.Super. 306, 314 (App.
court found that the material facts in controversy involved
standing, and were limited to possession of the original
note, endorsement of the note, the transfer of the note from
CCB to Freddie Mac, and CONA's right to enforce the note.
The trial court concluded, "[I]t's clear . . . that
a bearer of the note endorsed in blank is the holder of the
note  and entitled to enforce the note pursuant to N.J.S.A.