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Mantovani v. Wells Fargo Bank, N.A.

United States District Court, D. New Jersey

August 13, 2018



          PETER G. SHERIDAN, U.S.D.J.

         This matter comes before the Court on a motion to dismiss [ECF No. 13] filed by Defendant Wells Fargo Bank, N.A. (hereinafter, "Wells Fargo"). As a result of a foreclosure action brought by Wells Fargo before the New Jersey Superior Court, a judgment of foreclosure was entered against Plaintiffs Traci and Robert Mantovani, husband and wife. At the time this motion was heard, an appeal of the foreclosure decision was pending before the New Jersey Superior Court, Appellate Division.


         As alleged in Plaintiffs Amended Complaint, Plaintiffs, Traci and Robert Mantovani are a married couple who purchased their home and property subject of this action on July 15, 2005 obtaining a mortgage loan in the amount of $354, 000.00 from World Savings Bank. (First Amended Complaint, ECF No. 12, "FAC" ¶26) Plaintiffs' loan was allegedly securitized "with the Note not being properly transferred to the Bank of New York acting as a Trustee for the REMIC 20 Trust holding Plaintiffs' note." (Id. ¶27). Plaintiff believes that the mortgage on the Property, the debt or obligation evidenced by the Note and the Mortgage/Deed of Trust executed by Plaintiff in favor of the original lender and other Defendants, was not properly assigned or transferred to Defendants. (Id. ¶30). Plaintiffs allege that the debt did not comply with New Jersey law or other laws and thus does not constitute valid and enforceable true sale. In support of these allegations, Plaintiffs provided a "Property Securitization Analysis Report," drafted by "Certified Forensic Loan auditors, LLC" and dated March 21, 2016. (ECF No. 12-1).

         Prior to this action, Plaintiffs filed a bankruptcy claim in New Jersey state court, which was dismissed on jurisdictional grounds. (FAC ¶7). Plaintiffs Chapter 7 petition was eventually adjudicated. (Id.)

         Defendant, Wells Fargo Bank N.A. ("Wells Fargo") is a lender, who filed a foreclosure action against Plaintiffs and their primary residence located in Toms River, New Jersey. A foreclosure judgment was entered, and the property was subject to a sheriff sale. At the sale, Defendant M&U Holdings LLC ("M&U") purchased the property (Id. ¶ 9).

         Generally, Plaintiffs allege that Wells Fargo and M&U conspired "in a pattern and practice of Fraud to deprive the Plaintiffs and other New Jersey homeowners of their primary residence [...] through buying plaintiffs' home at a Sheriffs Sale below Market value, in a scheme to receive an unjust windfall."[1] (Id. ¶10).

         Procedural History

         As previously stated, Plaintiffs took out a mortgage from World Savings Bank, FSB ("WSB") to purchase their home on July 15, 2005. Plaintiffs received a loan modification in 2007 (Conroy Cert. Ex. 1). Effective December 31, 2007, WSB merged with and became Wachovia Mortgage, FSB ("Wachovia") (Conroy Cert. Ex. 2).[2] On November 1, 2009, Wachovia merged into Wells Fargo Bank, N.A. Because of these events, Wells Fargo became the holder of the Note and Mortgage in dispute. (Conroy Cert. Ex. 1, 2). The Loan went into default on October 1, 2014, for failure to make payments. (Id.) After the Mantovanis failed to cure, the loan was accelerated, resulting in Wells Fargo's filing of a foreclosure action on May 6, 2015. On December 4, 2015, after the Mantovanis filed an answer, Wells Fargo moved for summary judgment which was granted on January 8, 2016. (Conroy Cert. Ex. 6). The Mantovanis then filed a motion to vacate the State Court Judgment on April 26, 2016. (Conroy Cert. Ex. 7). There, as in the Complaint before this Court, they argued that the foreclosure judgment was invalid for the following reasons,

[Wells Fargo] is not in possession of the original Note and has no standing to foreclose of [Mantovanis] property... That no valid assignments were ever executed or filed between the parties and Wells Fargo Bank, NA, does not hold a valid assignment to collect the alleged debt....that [Wells Fargo]'s filed lis pendency against [the Mantovanis]'s property, which is not valid, is unenforceable where in [Wells Fargo] have no standing to foreclose, are not the owners in due course of the property, note, or debt and lis pendence must be vacated.... That [the Mantovanis] commissioned a Certified Forensic Audit, together with an affidavit executed by the auditor...That on January 8, 2016, this Honorable Court erroneously granted [Wells Fargo]'s motion for Summary Judgment granting Foreclosure, to a party who is not the owner in due course of the property, does not possess the original Note, does not have a valid assignment of the debt and has no standing to file foreclosure, or collect any alleged debt.

(Conroy Cert. Ex. 7). On April 26, 2016, the state court denied the Mantovanis' request and entered a Final Judgment of foreclosure in favor of Wells Fargo. (Conroy Cert. Ex. 9).

         On August 15, 2016, the borrowers filed a Notice of Appeal which was pending before New Jersey Appellate Division at the time this Court heard the present motion. As this Court understands, since then the Appellate Division rendered a decision affirming the lower court, the Mantovanis have filed an appeal with the Supreme Court of New Jersey.

         On October 5, 2017, the Property was sold to a third-party buyer, M&U, at a Sheriffs sale. Plaintiffs filed this action before the Court on January 22, 2018 alleging multiple counts of fraud, and seeking return of their property (their primary residence) which they argue was sold wrongfully at the sheriffs sale. (TRO ¶1). Initially, Plaintiffs requested a temporary restraining order to prevent final transfer of the property to M&U Ocean Holdings. On January 23, the Court held a telephone conference with Plaintiff and signed an Order to Show Cause mandating that Plaintiffs serve all documents filed with the Court to Defendants, along with the order to show cause (OTSC). After a hearing was held on January 30, 2018, the Court denied Plaintiffs' injunctive relief request. (ECF No. 8).

         On February 7, 2018, Plaintiff filed an Amended Complaint ("FAC") alleging the following claims: (1) Lack of Standing/wrongful foreclosure; (2) Fraud in the Concealment; (3) Fraud in the Inducement; (4) Intentional Infliction of Emotional Distress; (5) Slander of Title; (6) Quiet Title; (7) Declaratory Relief; (8) Violation of TILA (Truth in Lending Act) and HOEPA (Home Ownership and Equity and Protection Act), 15 U.S.C. 1601; (9) Violation of RESPA (Real Estate Settlement Procedures Act), 1 U.S.C. §2601; (10) Rescission; (11) Unjust Windfall; (12) Replevin; (13) ...

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