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  • Marco Benucci

Bank’s Foreclosure Attempt Defeated By Firm

In a recent foreclosure case handled by Marco Benucci, Esq., Mr. Benucci was able to convince the Court to find that a “foreclosure specialist’s” lack of specificity regarding “lost or misplaced” assignments was insufficient to allow the lender to Record any such Assignments

In the case at hand, the Bank’s requests to enter an Order directing the Somerset County Clerk’s Office to record two (2) Assignments of Mortgage – notwithstanding a break in the chain of assignments at the outset of the underlying mortgage loan’s execution – and seeking to direct the Office of Foreclosure to accept same in lieu of requiring a recorded certified true copy of the Assignment – were denied.

The Court was not satisfied that the foreclosing Bank had met its burden, demonstrating that such recordation was appropriate at this time.

Courts of equity have jurisdiction to establish lost documents. Motley v. Darling, 86 N.J. Eq. 185 (E. & A. 1916). N.J.S.A. 2A:47-1 provides “[t]he existence of any lost or destroyed deed or other instrument relating to title or real or personal property may be established by judgment in the superior court in an action brought in a summary manner or otherwise.” If the original documents cannot be produced because they are inaccessible or because of loss or destruction, secondary proof of the contents and execution may be introduced. 30A New Jersey Practice § 33.4 at 350; see Mutual Life Ins. Co. v. Cobb, 107 A. 58 (N.J.Ch. 1919) (stating that if the mortgage refers to a bond for terms of payment, plaintiff must prove the bond). In undertaking to establish and enforce a lost instrument, the execution and material contents of instrument must be established by clear, cogent, reasonably certain and convincing evidence. Zuckermandel v. Zuckermandel, 135 N.J. Eq. 598 (Ch.1944).

In the case at hand on May 8, 2003, United Bank advanced monies to the defendant and her deceased husband (hereinafter “borrowers”) securing a mortgage given by the borrowers to United for the property located in Raritan, New Jersey. This mortgage is dated May 8, 2003 and recorded on June 6, 2003 with the Somerset County Clerk’s Office. Also on May 8, 2003, United endorsed the promissory note in blank to IndyMac Bank, F.S.B. (hereinafter “IndyMac”) by way of Allonge.

Ocwen alleged that on July 11, 2008, the FDIC was named Conservator of IndyMac and on March 19, 2009, the FDIC (as Conservator) sold the assets of IndyMac to OneWest Bank. Thereafter, the mortgage is alleged to be assigned from OneWest to Ocwen and from Ocwen to Fannie Mae.

Ocwen first alleged that the Office of Foreclosure requires that Ocwen include a copy of all assignments to be provided in support of its application for entry of Final Judgment and will not accept a Certification of Lost Assignment in lieu of same. To this point, Ocwen – throughout its submissions – maintained that United did, in fact, assign the mortgage to OneWest, although this assignment had been lost, misplaced or destroyed. However, the issue before the Court was whether United assigned the mortgage to IndyMac, which in turn IndyMac may have assigned same to OneWest. The Court was not satisfied that Ocwen had met its burden in proving the chain of assignments with respect to the underlying mortgage.

First, the Court noted that Ocwen submitted the Certification of a “Foreclosure Specialist” of Seterus, Inc., an authorized sub-servicer for Federal National Mortgage Association (hereinafter “Fannie Mae”), as assignee for Ocwen Loan Servicing, LLC, in support of its motion.

The “foreclosure specialist”asserted that although United assigned the Note and Mortgage to OneWest Bank, FSB, same had been lost or misplaced and no copy of same exists.

The Court noted that – as an initial matter – it made no logically sense that United would have assigned the mortgage to OneWest after assigning the Note to IndyMac. Rather, IndyMac would have assigned same to OneWest. The Court found that there was no indication whatsoever as to when or if the IndyMac to OneWest’s assignment was purportedly made.

Second, the Court found that there was no Certification by the actual lender – nor any lender for that matter – demonstrating that the Assignment into OneWest was lost or misplaced. Nor were proofs submitted showing that United and IndyMac had gone defunct.

Rather, a review of the foreclosure specialist’s Certification demonstrated that there was no indication whatsoever as to what “extensive efforts” the foreclosure specialist had made to obtain the executed Assignment or obtain proofs showing that either of these lenders are out-of-business. In fact, there was no specificity in the specialist’s affidavit as to what had been done and as to how the efforts had been conducted.

As such, the Court found that Ocwen had not met yet its burden in establishing a clear chain of assignments as to permit it to record the subsequent assignments articulated in its moving papers.

The Court also noted that Ocwen will not be able to move to final judgment since the loan documents were subsequently assigned to Fannie Mae on December 1, 2015. As such, Fannie Mae (or the current holder of the subject note) should be substituted as plaintiff under R. 1:34-6(4) prior to proceeding to final judgment in this foreclosure case.

For more information feel free to contact Marco Benucci, Esq. of WRONKO LOEWEN BENUCCI.


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