New Jersey | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "new jersey"

NJ gets green light to enter final judgment of uncontested foreclosure actions

NJ gets green light to enter final judgment of uncontested foreclosure actions


“It is FURTHER ORDERED that the Office of Foreclosure is authorized to recommend the entry of final judgment pursuant to Rule 1:34-6 in uncontested actions which the procedures set forth in this Order have been followed.”


 

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BANK OF NEW YORK v. Cupo | NJ Appellate Div. “plaintiff here does not have standing as an assignee to prosecute this foreclosure action”

BANK OF NEW YORK v. Cupo | NJ Appellate Div. “plaintiff here does not have standing as an assignee to prosecute this foreclosure action”


BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATE HOLDERS CWABS, INC., ASSET-BACKED CERTIFICATES, SERIES 2006-23, Plaintiff-Respondent,
v.
ALEXANDER T.J. CUPO, Defendant-Appellant,
MRS. ALEXANDER T.J. CUPO, WIFE OF ALEXANDER T.J. CUPO AND CITIBANK SOUTH DAKOTA N.A., Defendants.

No. A-1212-10T2.
Superior Court of New Jersey, Appellate Division.

Argued October 5, 2011.
Decided February 28, 2012.
Gerald J. Monahan argued the cause for appellant.

Kristina G. Murtha argued the cause for respondent.

Before Judges Fuentes, Graves and Koblitz.

NOT FOR PUBLICATION

PER CURIAM.

In this mortgage foreclosure action, defendant Alexander Cupo appeals from the decision of the Chancery Division, General Equity Part, denying his motion to vacate default judgment and dismiss the complaint filed by plaintiff Bank of New York, as Trustees for the Certificate-Holders CWABS, Inc., Asset-Banked Certificates, Series 2006-23. Defendant argues that the trial court erred when it denied his motion because: (1) plaintiff did not have physical possession of the promissory note at the time it filed its complaint for foreclosure; (2) plaintiff did not have standing to prosecute the foreclosure because the original lender, Countrywide Home Loans, assigned the promissory note and mortgage to plaintiff thirty-nine days after the complaint was filed; and (3) both plaintiff and its assignor Countrywide Home Loans failed to satisfy the requirements under N.J.S.A. 2A:50-56.

After reviewing the record before us, we reverse and remand this matter to the General Equity Part for a hearing to determine whether plaintiff has standing to file the complaint. As we made clear in Deutsche Bank Nat’l Trust Co. v. Mitchell, 422 N.J. Super. 214, 224 (App. Div. 2011), a foreclosing mortgagee must demonstrate that it had the legal authority to enforce the promissory note at the time it filed the original complaint for foreclosure. As correctly noted by defendant here, the record shows that the original lender, Countrywide Home Loans, assigned the promissory note and mortgage to plaintiff on May 10, 2007, thirty-nine days after the complaint was filed.

The following facts will inform our analysis of the issues raised by the parties.

I

On December 22, 2006, defendant signed a promissory note to Countrywide Home Loans, Inc., memorializing a $245,000 loan. To secure payment of the note, defendant executed a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), acting solely as a nominee for Countrywide Home Loans, Inc. The mortgage was recorded on January 11, 2007. Defendant failed to make the first payment on the loan that was due on February 1, 2007. In fact, to date, defendant has not made any payments on the loan. Pursuant to the terms of the loan, defendant defaulted on March 1, 2007. Countrywide mailed defendant a notice of intent to foreclose dated March 5, 2007.

On May 10, 2007, plaintiff Bank of New York filed a complaint in foreclosure, seeking to sell the mortgaged lands to satisfy the amount due. The complaint indicated that “[b]y assignment of mortgage, Mortgage Electronic Registration Systems, Inc., acting solely as a nominee for Countrywide Home Loans, Inc. assigned its mortgage to Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2006-03 which assignment has been sent for recording in the office of the clerk of Hudson County.” Plaintiff served the summons and complaint on defendant on June 14, 2007.

The record shows that MERS assigned its mortgage to Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2006-23, on June 19, 2007. The assignment was recorded on July 5, 2007. Plaintiff filed a request to enter default against defendant on August 20, 2007. Plaintiff mailed a notice of intent to enter final judgment on August 29, 2007. In this light, the matter was deemed uncontested and the court entered final judgment by default on November 15, 2007.

Despite the entry of final judgment, plaintiff and defendant continued to discuss a possible settlement of the suit. Sheriff sales were postponed a number of times during these negotiations.[1] The parties eventually proceeded to mediation. After two sessions, the parties reached an apparent impasse. Although a third session was scheduled for September 28, 2010,[2] defendant moved to vacate the default judgment and dismiss plaintiff’s complaint on August 26, 2010, arguing that plaintiff lacked standing to prosecute the foreclosure action, and failed to comply with the notice requirements in N.J.S.A. 2A:50-56. Plaintiff argued that defendant had not established excusable neglect nor raised a meritorious defense. The trial court denied defendant’s motion to vacate the default judgment as well as his subsequent motion for reconsideration.

II

We start our analysis by reaffirming certain bedrock principles of appellate review. The decision to vacate a judgment lies within the sound discretion of the trial court, guided by principles of equity. Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994). Under Rule 4:50-1:

On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party’s legal representative from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under [Rule] 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.

The trial court’s decision to vacate a judgment under Rule 4:50-1 “will be left undisturbed unless it represents a clear abuse of discretion.” Hous. Auth. of Morristown, supra, 135 N.J. at 283 (citing Mancini v. EDS, 132 N.J. 330, 334 (1993)). To vacate a default judgment, the defendant “must show that the neglect to answer was excusable under the circumstances and that he has a meritorious defense.” Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.), aff’d, 43 N.J. 508 (1964). Because a default judgment is not predicated on a determination that plaintiff has met its burden of proof after providing a defendant his or her day in court, the trial court should review a motion to set aside a default judgment “with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached.” Hous. Auth. of Morristown, supra, 135 N.J. at 283-84 (quoting Marder, supra, 84 N.J. Super. at 318-19).

Here, defendant’s argument challenges directly the power of the court to grant the relief requested by plaintiff. Defendant argues that the default judgment obtained by plaintiff is utterly void from its inception because plaintiff did not have standing to prosecute the case at the time it filed the foreclosure complaint.

A mortgagee may establish standing by showing “that it is the holder of the note and the mortgage at the time the complaint was filed.” Deutsche Bank, supra, 422 N.J. Super. at 224-25 (internal quotation marks omitted). Plaintiff must have “presented an authenticated assignment” dated prior to its filing of the original complaint. See id. at 225. Here, the only evidence of the assignment is the assignment document dated June 19, 2007, which is dated thirty-nine days after plaintiff filed the complaint. As was the case in Deutsche Bank, plaintiff here does not have standing as an assignee to prosecute this foreclosure action.

Because the record before us does not include a certified copy of the original promissory note, we do not address plaintiff’s potential standing under the provisions of the Uniform Commercial Code (UCC) governing the transfer of negotiable instruments. N.J.S.A. 12A:3-101 to-605. We thus remand this matter to the trial court to conduct a hearing to determine whether, before filing the original complaint, plaintiff was in possession of the note or had another basis to achieve standing to foreclose, pursuant to N.J.S.A. 12A:3-301.

Finally, defendant argues that plaintiff failed to provide notice, pursuant to N.J.S.A. 2A:50-56(c), that defendant could sell his home prior to going into foreclosure. We reject this argument substantially for the reasons expressed by the trial court.

N.J.S.A. 2A:50-56(c) requires, in relevant part:

The written notice shall clearly and conspicuously state in a manner calculated to make the debtor aware of the situation

….

(8) the right, if any, of the debtor to transfer the real estate to another person subject to the security interest and that the transferee may have the right to cure the default as provided in this act, subject to the mortgage documents[.]

[(Emphasis added).]

The plain language of the statute only requires inclusion of the right to transfer the real estate if the mortgagor actually has the right to transfer the real estate subject to the security interest. If the mortgage documents do not provide that right, the mortgagee does not have to include that language in its notice of foreclosure.

Here, defendant’s mortgage states:

If all or any part of the Property or any Interest in the Property is sold or transferred… without Lender’s prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument.

[(Emphasis added).]

Thus, although the mortgage permits defendant to transfer the property, a nonconsensual transfer is treated as a default, authorizing plaintiff to accelerate the payment of the outstanding principal.

In this light, the trial judge gave the following explanation for rejecting defendant’s argument:

[T]he statute only requires that language to be in [the notice under N.J.S.A. 2A:50-56(c)] if that right exists, and in this case, as I understand it, the mortgage specifically provides that the defendant does not have the right to have anyone else assume the debt or to transfer his interest in the property without the lender’s consent.

….

There is language in the notice of intent, as I read it…, if you are willing to sell your property, your home, in order to avoid foreclosure, it is possible that the sale of your home can be approved through Countrywide, even if your home is worth less than what is owed on it.

So it tells him he can convey his home, it has to be approved by Countrywide, but to have it sold to anyone or to have someone else assume the debt is precluded by virtue of the mortgage instrument itself.

So… that would actually be misleading if that language were in there, because he doesn’t have that right…. [T]he language that you’re saying should be in the notice of intent is in violation of the mortgage document itself.

We agree with the trial judge’s analysis and ultimate conclusion. N.J.S.A. 2A:50-56(c) does not require the lender to notify the borrower of his or her right to transfer the property; it only requires notice of the right to transfer the property subject to the mortgage. Here, the mortgage document prohibits transfer of the property subject to the mortgage without consent. Under these circumstances, plaintiff was not required to provide defendant with notice of an unequivocal right to transfer the property.

Reversed on the issue of standing and remanded for such further proceedings as may be warranted. We do not retain jurisdiction.

[1] Defendant is an intellectually challenged young man who also suffers from a digestive disorder. His father John Cupo, a realtor, has assumed the responsibility to advocate for his son. The record thus includes a certification by defendant’s father in support of defendant’s application to adjourn a court-ordered sheriff’s sale. According to John Cupo, after extensive negotiations on behalf of his son with representatives of Countrywide, the parties reached a tentative settlement in June 2008, whereby Countrywide agreed to restructure defendant’s outstanding debt “by consolidating the loan balance, late fees and penalties with a[n] 11% interest rate going forward.” John Cupo expressed his frustration that despite “innumerable attempts” to inform the lender of his son’s willingness to accept this settlement, “Countrywide… failed to respond to the acceptance of their proposal….”

[2] The parties met for a third and final mediation session on September 28, 2010. The mediation ended without a settlement.

[ipaper docId=83718961 access_key=key-1d4khihroisgfw14dqs1 height=600 width=600 /]

 

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US Bank National Association, v. Guillaume, et al. | New Jersey Supreme Court Says Lenders Must Be Named in Foreclosures

US Bank National Association, v. Guillaume, et al. | New Jersey Supreme Court Says Lenders Must Be Named in Foreclosures


Business Week-

New Jersey’s Supreme Court ruled documents indicating a bank’s intention to foreclose on a mortgage must name the lender before a residential property can be seized.

The case involves the foreclosure on an East Orange home owned by Maryse and Emilio Guillaume, who received a notice of intention to foreclose in May 2008. That notice included the name of the mortgage servicer, America’s Servicing Company while omitting the name of the lender. Credit Suisse AG made the loan and assigned it to US Bank National Association.

The state court in Trenton ruled today that the notice sent to the Guillaumes failed to comply with the state’s Fair Foreclosure Act, which requires the name and address of the actual lender, as well as contact information for a loan servicer. Failure to do so creates “potential for significant prejudice” to homeowners, the court said.

[BUSINESS WEEK]

SUPREME COURT OF NEW JERSEY

A-11 September Term 2011
068176

US BANK NATIONAL ASSOCIATION,
AS TRUSTEE FOR CSAB MORTGAGEBACKED
PASS-THROUGH
CERTIFICATES, SERIES 2006-3,
Plaintiff-Respondent,

v.

MARYSE GUILLAUME and EMILIO
GUILLAUME,
Defendants-Appellants,
and
CITY OF EAST ORANGE,
Defendant.

[ipaper docId=83026127 access_key=key-1dy350f9dun9v27dcohr height=600 width=600 /]

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Posted in STOP FORECLOSURE FRAUDComments (4)

IN RE: RODRIGUEZ | NJ Bankruptcy Court awards debtors counsel 85K fees because Countrywide willfully violated the automatic stay pursuant to § 362(k)

IN RE: RODRIGUEZ | NJ Bankruptcy Court awards debtors counsel 85K fees because Countrywide willfully violated the automatic stay pursuant to § 362(k)


UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW JERSEY

Re: In re Rodriguez (Chapter 13)
Case No. 07-24687 (MBK)

EXCERPT:

D. The Attorneys’ Fees Requested are Reasonable
Having ruled that the Debtors are entitled to attorneys’ fees, the Court must determine whether the requested fees are reasonable. See Miller, supra, 447 B.R. at 434 (“For Debtors to recover attorneys’ fees, however, such fees must be reasonable and necessary”). Indeed, the policy to discourage willful stay violations is tempered by a reasonableness standard. Id. While such policy guards against excessive litigation, however, it was Countrywide’s actions that created such substantial litigation costs to the Debtors in this case. Moreover, Countrywide has voiced no objection to the reasonableness of the fees requested by Debtors’ counsel. The Court has reviewed the documentation in support of the requested attorneys’ fees and regards the fees to be reasonable in light of the work performed in this case.

V. Conclusion
For the foregoing reasons, this Court: (i) finds that Countrywide willfully violated the
automatic stay pursuant to § 362(k), (ii) awards damages to the Debtors in the form of attorneys’
fees in the amount of $85,033.814, and (iii) directs Countrywide to make payment of the award
to “Francisco and Anna Rodriguez, in care of Abelson & Truesdale, LLC” within 30 days of
entry of this ruling. The Court will enter an order consistent with its findings.

[ipaper docId=82743740 access_key=key-16dspzovwcgo0qi7jl4d height=600 width=600 /]

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Future of foreclosures in N.J. hinges on state Supreme Court decision | US Bank N.A. v. Guillaume

Future of foreclosures in N.J. hinges on state Supreme Court decision | US Bank N.A. v. Guillaume


I disagree with the judge’s motion words below and see video below as to why even attorney’s have a difficult time.

“I have a lot of problems with saying that all that’s going, with all this evidence of [c]ourt process for over a year, to just rely on trying to negotiate something with the bank was like sticking your head in the sand.

This wasn’t going to go away and they
didn’t get any assurance from the bank that
they were succeeding in their negotiation
efforts or that an answer to the complaint
was not required. I mean they just focused
on one path. And they ignored the
negotiation path and they ignored the
litigation side of things. You can’t do
that.

And I have to say that . . . Mrs.
Guillaume was being so aggressive and so
persistent in trying to negotiate and going
to all these different places to get help,
but the one place she wasn’t going was a
member of the bar, a lawyer which is usually
what you do when you get [c]ourt papers.

Or if you absolutely can’t afford a
lawyer and that’s the case of many
foreclosures, a very heavy self-represented
area of the law to at least contact the
[c]ourt yourself and you send in some
rudimentary answer. And it doesn’t have to
be fancy. I mean you write a letter to the
foreclosure unit, they’ll stamp contested on
it.

Because I’ve seen so many of them long
hand. But nothing was done. And I don’t
regard that as excusable neglect. So that
prong is lacking.”  

(emphasis added).

Simply wrong, one does NOT understand how frustrating it is to even try to get anyone from the “bank” on the phone, attempting a modification as we have read time and time again were nothing but DISASTROUS and GOING ABSOLUTELY NO PLACE!

[Please watch Michigan Atty Vanessa Fluker and you’ll understand why].

Lets not forget, this reversal that goes to the heart of this from out of New Jersey: BANK OF NEW YORK vs. LAKS | NJ Appeals Court Reversal “A notice of intention is deficient…if it does not provide the name and address of the lender”

NJ.COM-

In the nearly five months since the state Supreme Court effectively allowed six of the country’s biggest banks to begin filing foreclosures again, attorneys and court officials have been expecting a flood of new filings to hit the courts.

Except it hasn’t happened. Foreclosure filings are down 83 percent as of October this year, compared with the same time period last year, according to court figures, and there are at least 100,000 cases either pending in the system or waiting to be submitted.

Attorneys involved in the work in New Jersey point to at least one reason for the significant delay: a court case that has reached the state Supreme Court, with oral arguments on Wednesday.

The case, US Bank National Association v. Guillaume, is important because the court …

[NJ.COM]

[ipaper docId=74692087 access_key=key-1xrvd0kemha1r7mycu2h height=600 width=600 /]

 

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Posted in STOP FORECLOSURE FRAUDComments (3)

Legal issues slow foreclosures in New Jersey

Legal issues slow foreclosures in New Jersey


I think this is the case in every state and all will agree


North Jersey-

In a small Bergen County courtroom one recent Friday, a sheriff’s officer auctioned off two foreclosed properties in a matter of minutes, as a handful of investors kept their eyes open for bargains.

It was a far cry from the typical sheriff’s auction of mid-2010, when 15 or more properties were auctioned weekly and up to 100 investors crowded the courthouse’s large jury room.

[…]

The reason: an August appellate court decision, Bank of New York v. Laks, according to Kevin Wolfe, head of the state’s Office of Foreclosure. In that case, the court dismissed a foreclosure, finding the lender violated the state Fair Foreclosure Act because it didn’t properly identify itself in a notice sent to the troubled homeowners.

[NORTH JERSEY]

[ipaper docId=61908065 access_key=key-1zd2neascm8dxsn37rbr height=600 width=600 /]

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NJ Class Action | GILES v. PHELAN HALLINAN & SCHMIEG, WELLS FARGO

NJ Class Action | GILES v. PHELAN HALLINAN & SCHMIEG, WELLS FARGO


IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

CHARLES J. and DIANE GILES, and
LAURINE SPIVEY,
individually and on behalf of all
others similarly situated,

Plaintiffs,

v.

PHELAN HALLINAN & SCHMIEG, LLP,
PHELAN HALLINAN & SCHMIEG, P.C.,
LAWRENCE T. PHELAN, FRANCIS S. HALLINAN,
DANIEL G. SCHMIEG, ROSEMARIE DIAMOND,
FULL SPECTRUM SERVICES, INC., and
LAND TITLE SERVICES OF NEW JERSEY, INC.,
WELLS FARGO & COMPANY, and
WELLS FARGO BANK, N.A.

Defendants

[ipaper docId=70530593 access_key=key-1u6fxel6bh9mmojxw7ja height=600 width=600 /]

 

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Posted in STOP FORECLOSURE FRAUDComments (10)

AURORA v. TOLEDO | NJ SC  “We question whether Lehman’s designation of MERS as its nominee remained in effect after Lehman filed its bankruptcy”

AURORA v. TOLEDO | NJ SC “We question whether Lehman’s designation of MERS as its nominee remained in effect after Lehman filed its bankruptcy”


NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0804-10T3

AURORA LOAN SERVICES, LLC,
Plaintiff-Respondent,

v.

BERNICE TOLEDO,
Defendant-Appellant,

and

MR. TOLEDO, Husband of
BERNICE TOLEDO, MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., As Nominee
For LEHMAN BROTHERS BANK FSB;
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC., As Nominee For
AURORA LOAN SERVICES LLC,
Defendants.
_________________________________________________________

Submitted September 26, 2011 – Decided October 18, 2011

Before Judges Alvarez and Skillman.

On appeal from Superior Court of New Jersey,
Chancery Division, Passaic County, Docket
No. F-10005-09.

Kenneth C. Marano, attorney for appellant.

Victoria E. Edwards (Akerman Senterfitt),
attorney for respondent.

PER CURIAM

Defendant appeals from an order entered on August 31, 2010,
which granted a summary judgment in this mortgage foreclosure
action declaring that defendant’s answer “sets forth no genuine
issue as to any material fact challenged and that [plaintiff] is
entitled to a judgment as a matter of law.” There is no
indication in the record before us that plaintiff ever secured a
final judgment of foreclosure. Therefore, the appeal appears
interlocutory. See Wells Fargo Bank, N.A. v. Garner, 416 N.J.
Super. 520, 523-24 (App. Div. 2010). However, because defendant
did not move to dismiss on that basis and the appeal has been
pending for a substantial period of time, we grant leave to
appeal as within time and address the merits. See R. 2:4-
4(b)(2).

The record before us is rather sparse and disjointed.
However, the following facts may be gleaned from that record.
Defendant owns a home in the Borough of Prospect Park. On
July 24, 2006, defendant executed two promissory notes payable
to Lehman Brothers Bank, the first for $320,000, which was
payable on August 1, 2036, and the second for $60,000, which was
payable on August 1, 2021. Both notes were secured by mortgages
on defendant’s home.

On September 1, 2006, plaintiff began servicing the notes
on behalf of Lehman.

Sometime in 2008, defendant went into default in the
payment of her obligations under the notes.

On January 30, 2009, plaintiff purportedly obtained an
assignment of the $320,000 note from Lehman and the mortgage
securing that note.1 This assignment was signed by a person
named Joann Rein, with the title of Vice-President of Mortgage
Electronic Systems, Inc. (MERS). MERS was described in the
assignment document as a “nominee for Lehman Brothers Bank.”

This document is discussed in greater detail later in the
opinion.

On February 23, 2009, plaintiff filed this mortgage
foreclosure action. The parties subsequently engaged in
negotiations to resolve the matter. Those negotiations were
unsuccessful and are not relevant to our disposition of this
appeal.

Plaintiff filed a motion for summary judgment to strike
defendant’s answer on the ground there was no contested issue of
fact material to plaintiff’s right to foreclose upon defendant’s
property. In support of this motion, plaintiff relied primarily
on an affidavit by Laura McCann, one of its vice-presidents,
and exhibits attached to that affidavit, which are discussed
later in this opinion. Defendant submitted an answering
certification.

After hearing oral argument, the trial court issued a brief
written opinion and order granting plaintiff’s motion. This
appeal followed.

To have standing to foreclose a mortgage, a party generally
must “own or control the underlying debt.” Wells Fargo Bank,
N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div. 2011) (quoting
Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 327-28 (Ch.
Div. 2010)). If the debt is evidenced by a negotiable
instrument, such as the promissory notes executed by defendant,
the determination whether a party owns or controls the
underlying debt “is governed by Article III of the Uniform
Commercial Code (UCC), N.J.S.A. 12:3-101 to -605, in particular
N.J.S.A. 12A:3-301.” Ibid. Under this section of the UCC, the
only parties entitled to enforce a negotiable instrument are
“[1] the holder of the instrument, [2] a nonholder in possession
of the instrument who has the rights of the holder, or [3] a
person not in possession of the instrument who is entitled to
enforce the instrument pursuant to [N.J.S.A.] 12A-3-309 or
subsection d. of [N.J.S.A.] 12A:3-418.” N.J.S.A. 12A:3-301
(brackets added).

In this case, it is clear for the same reasons as in Ford,
418 N.J. Super. at 598, that plaintiff is neither a “holder” of
the promissory notes executed by defendant nor a “person not in
possession” of those notes who is entitled to enforce them
pursuant to N.J.S.A. 12A:3-309 or N.J.S.A. 12A:3-418(d).

Therefore, as in Ford, plaintiff’s right to foreclose upon the
mortgages defendant executed to secure those notes depends upon
whether plaintiff established that it is “a nonholder in
possession of the instrument[s] who has the rights of a holder.”
N.J.S.A. 12A:3-301; see Ford, supra, 418 N.J. Super. at 498-99.

To establish its right to foreclose upon the mortgage
defendant executed to secure her $320,000 note to Lehman,
plaintiff relied upon an affidavit by Laura McCann, a vicepresident
of plaintiff. McCann’s affidavit states that she has
“custody and control of the business records of [plaintiff] as
they relate to [defendant’s] loans.” Regarding each of the
copies of defendant’s notes and mortgages attached to her
certifications, McCann asserts that it is a “true and correct
copy.” However, McCann does not state that she personally
confirmed that those attachments were copies of originals in
plaintiff’s files.

McCann’s affidavit also has attached a copy of a document
that purports to be a “Corporate Assignment of Mortgage” from
MERS, as Lehman’s nominee, to plaintiff. Again, McCann’s
affidavit asserts that this document “is a true and correct copy
of the instrument assigning the Mortgage and Note to
[plaintiff],” but does not state that she personally confirmed
that it was a copy of the original.

A certification in support of a motion for summary judgment
must be based on “personal knowledge.” Ford, supra, 418 N.J.
Super. at 599 (quoting R. 1:6-6); see also Deutsche Bank Nat’l
Trust Co. v. Mitchell, ___ N.J. Super. ___, ___ (App. Div. 2011)
(slip op. at 17-19). Our Supreme Court has recently reaffirmed
the need for strict compliance with this requirement in mortgage
foreclosure actions by adopting, effective December 20, 2010, a
new court rule which specifically states that an affidavit in
support of a judgment in a mortgage foreclosure action must be
“based on a personal review of business records of the plaintiff
or the plaintiff’s mortgage loan servicer.” R. 4:64-2(c)(2).
McCann’s affidavit does not state that she conducted such a
“personal review of [plaintiff’s] business records” relating to
defendant’s notes and mortgages.

Furthermore, even if plaintiff had presented adequate
evidence that the purported assignment of the mortgages and
notes attached to McCann’s affidavit was a copy of the original
in plaintiff’s files, this would not have been sufficient to
establish the effectiveness of the alleged assignment. This
document was signed by a JoAnn Rein, who identifies herself as a
vice-president of MERS, as nominee for Lehman Brothers, and was
notarized in Nebraska. Plaintiff’s submission in support of its
motion for summary judgment did not include a certification by
Rein or any other representative of MERS regarding her authority
to execute the assignment or the circumstances of the
assignment. In the absence of such further evidence, we do not
view the purported assignment of the mortgages and notes to be a
self-authenticating document that can support the summary
judgment in plaintiff’s favor. N.J.R.E. 901; see 2 McCormick on
Evidence § 221 (6th ed. 2006).

There is an additional potential problem with this
purported assignment. The assignment was not made by Lehman, as
payee of the promissory notes secured by the mortgage, but
rather by MERS, “as nominee for Lehman.” Although the notes and
mortgages appointed MERS as Lehman’s nominee, Lehman filed a
petition for bankruptcy protection in September 2008, see Andrew
Ross Sorkin, Lehman Files for Bankruptcy; Merrill is Sold, N.Y.
Times (Sept. 14, 2008), which was before the purported
assignment of defendant’s mortgage and note on January 30, 2009.

Therefore, we question whether Lehman’s designation of MERS as
its nominee remained in effect after Lehman filed its bankruptcy
petition, absent ratification of that designation by the
bankruptcy trustee. On remand, the trial court should address
the question whether MERS was still Lehman’s nominee as of the
date of its purported assignment of defendant’s note and
mortgage to plaintiff.

Accordingly, we reverse the August 31, 2010 order granting
plaintiff’s motion for summary judgment and remand to the trial
court for further proceedings in conformity with this opinion.

[ipaper docId=69388551 access_key=key-22fs56rdfpzf4tuolduu height=600 width=600 /]

 

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Posted in STOP FORECLOSURE FRAUDComments (2)

U.S. banks offered deal over lawsuits – FT

U.S. banks offered deal over lawsuits – FT


REUTERS-

Big U.S. banks in talks with state prosecutors to settle claims of improper mortgage practices have been offered a deal that is proposed to limit part of their legal liability, the Financial Times reported on Tuesday.

The FT said state prosecutors have proposed a deal to limit part of the banks’ liability in return for a multibillion-dollar payment.

The talks aim to settle allegations that banks including Bank of America (BAC.N), JPMorgan Chase (JPM.N), Wells Fargo (WFC.N), Citigroup (C.N) and Ally Financial (GKM.N). seized the homes of delinquent borrowers and broke state laws by employing so-called “robosigners”, workers who signed off on foreclosure documents en masse without reviewing the paperwork.

[REUTERS]

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Posted in STOP FORECLOSURE FRAUDComments (0)

GONZALEZ v. WILSHIRE CREDIT CORP., U.S. BANK | NJ Supreme Court Affirms Appellate Div. “Fraudulent lending practices, even in a post-judgment setting, may be the basis for a Consumer Fraud Act lawsuit”

GONZALEZ v. WILSHIRE CREDIT CORP., U.S. BANK | NJ Supreme Court Affirms Appellate Div. “Fraudulent lending practices, even in a post-judgment setting, may be the basis for a Consumer Fraud Act lawsuit”


JUSTICE ALBIN delivered an awesome beat down! Kick-Ass! All the named judges below did!

We roundly reject defendants’ argument that the collection activities of a servicing agent, such as Wilshire, do not amount to the “subsequent performance” of a loan, a covered activity under the CFA. The Attorney General and Legal Services, as amici, both have outlined the abusive collection practices of servicing agents for Residential Mortgage Back Securities. We are in the midst of an unprecedented foreclosure crisis in which thousands of our citizens stand to lose their homes, and in desperation enter into agreements that extend credit — post-judgment — in the hope of retaining homeownership. Defendants would have us declare this seemingly unregulated area as a free-for-all zone, where predatory-lending practices are unchecked and beyond the reach of the CFA. Yet, the drafters of the CFA expected the Act to be flexible and adaptable enough to combat newly packaged forms of fraud and to be equal to the latest machinations exploiting the vulnerable and unsophisticated consumer.

GonzalezvWilshireCreditCorp

BLANCA GONZALEZ, Plaintiff-Respondent,

v.

WILSHIRE CREDIT CORPORATION and U.S. BANK NATIONAL ASSOCIATION, as Trustee Under the Pooling and Servicing Agreement dated March 14, 1997 for Cityscape Home Equity Loan Trust 1997-B, Inc., Defendants-Appellants.

No. A-99 September Term 2009 065564.

Supreme Court of New Jersey.

Argued January 18, 2011. Decided August 29, 2011.

Kim A. Watterson, a member of the Commonwealth of Pennsylvania bar, argued the cause for appellants (McElroy, Deutsch, Mulvaney & Carpenter, attorneys; Richard P. Haber and Anthony J. Risalvato, of counsel and on the briefs).

Madeline L. Houston argued the cause for respondent (Houston & Totaro, attorneys).

Janine N. Matton, Deputy Attorney General, argued the cause for amicus curiae Attorney General of New Jersey (Paula T. Dow, Attorney General, attorney; Andrea M. Silkowitz, Assistant Attorney General, of counsel; Ms. Matton and Megan Lewis, Deputy Attorney General, on the brief).

Michael R. O’Donnell submitted a brief on behalf of amicus curiae New Jersey Bankers Association (Riker Danzig Scherer Hyland & Perretti, attorneys; Mr. O’Donnell, Ronald Z. Ahrens, and Anthony C. Valenziano, on the brief).

Rebecca Schore submitted a brief on behalf of amicus curiae Legal Services of New Jersey (Melville D. Miller, Jr., attorney; Mr. Miller, Ms. Schore, Margaret Lambe Jurow, and David McMillin on the brief).

JUSTICE ALBIN delivered the opinion of the Court.

Plaintiff Blanca Gonzalez pledged as collateral the home she jointly owned with Monserate Diaz to secure a loan he obtained from Cityscape Mortgage Corporation. Diaz died, and afterwards plaintiff began making the necessary mortgage payments to the then holder of the loan, defendant U.S. Bank Association. When plaintiff fell behind in making timely payments, the bank secured a foreclosure judgment. The defendant servicing agent for the bank withheld executing on the judgment provided that plaintiff fulfilled the terms of successive agreements into which she entered with the agent. The post-judgment agreements recast the terms of the original loan to Diaz, but included — plaintiff asserts — illicit financing charges and miscalculations of monies due. Plaintiff claims that the servicing agent, knowing that plaintiff had no more than a primary school education and could not speak English, bypassed her legal-services attorney in having her execute a second agreement — an agreement that memorialized predatory and fraudulent lending practices.

Plaintiff alleges that the conduct of the defendant bank and the defendant servicing agent violated the Consumer Fraud Act. Defendants argue that a post-judgment settlement agreement involving a non-debtor mortgagor falls outside the purview of the Act.[1] The trial court agreed and granted summary judgment in favor of defendants. The Appellate Division reversed.

We hold that the post-foreclosure-judgment agreements in this case were both in form and substance an extension of credit to plaintiff originating from the initial loan. Fraudulent lending practices, even in a post-judgment setting, may be the basis for a Consumer Fraud Act lawsuit. For that reason, we affirm the Appellate Division.

I.

A.

In 1994, plaintiff Blanca Gonzalez and Monserate Diaz purchased a home in Perth Amboy as tenants in common;[2] both of their names were placed on the deed.[3] In February 1997, Diaz borrowed $72,000 from Cityscape Mortgage Corporation (Cityscape) and executed a Fixed Rate Balloon Note with an annual interest rate of 11.250 percent. In the note, Diaz agreed to make monthly payments of $699.31 until the loan’s maturity date, March 3, 2012, when a final balloon payment of $61,384.17 would be due. Plaintiff did not sign the note. As security for the loan, plaintiff and Diaz pledged both of their interests in the property by executing a mortgage in favor of Cityscape. The mortgage agreement prepared by Cityscape listed plaintiff and Diaz as “borrower[s].” Although plaintiff was not personally liable on the note signed by Diaz, in the event of nonpayment of the loan, plaintiff’s ownership interest in the home was subject to foreclosure to pay Diaz’s debt.

In March 1997, Cityscape assigned the note and mortgage to U.S. Bank National Association (U.S. Bank). U.S. Bank acquired the note and mortgage in this case, along with a bundle of other like instruments, in the bank’s capacity as trustee, under a pooling and servicing agreement for Cityscape Home Equity Loan Trust 1997-B, Inc. Wilshire Credit Corporation (Wilshire) was U.S. Bank’s servicing agent.[4] The role of a servicing agent generally is to collect payments on the loan and, in the event of default, pursue foreclosure or other alternatives to secure payment of the loan. See Adam J. Levitin & Tara Twomey, Mortgage Servicing, 28 Yale J. on Reg. 1, 15, 23, 25-28 (2011).

In 1999, Diaz died intestate.[5] Plaintiff continued to live in the home and make payments on the loan. In 2001, plaintiff was laid off from her factory job at Mayfair Company, where she had been employed for seventeen years. After the layoff, she suffered a heart attack and other health difficulties, and in 2003 was approved for Social Security disability benefits.

Over time, plaintiff fell behind on the loan payments. At some point, Wilshire refused to accept further payments from plaintiff. In March 2003, U.S. Bank filed a foreclosure complaint in the Superior Court, Chancery Division, Middlesex County, naming Diaz’s estate and plaintiff as defendants. In September 2003, the bank forwarded to plaintiff a Notice of Intent to Foreclose, indicating that $8,108.23 was owed on the loan. Plaintiff was unable to pay the amount due.

In April 2004, the chancery court entered judgment in favor of U.S. Bank in the amount of $80,454.71 plus interest and costs, including $954.55 in attorneys’ fees, on the defaulted loan. The court also ordered that the mortgaged premises be sold to satisfy the judgment. A writ of execution was issued, and a sheriff’s sale was scheduled for the next month.

Before the sheriff’s sale, plaintiff entered into a written agreement with Wilshire, U.S. Bank’s servicing agent. In May 2004, Wilshire agreed to forbear pursuing the sheriff’s sale contingent on plaintiff paying arrears, including foreclosure fees and costs, of $17,612.84. Plaintiff agreed to make a lump sum payment of $11,000 and then monthly payments of $1,150 through January 20, 2006.[6] Wilshire added the caveat: “THIS TERM MAY NOT REINSTATE THE LOAN.” Wilshire further agreed to dismiss the foreclosure action when plaintiff made the account current. The agreement ended with the following language: “THIS IS AN ATTEMPT TO COLLECT A DEBT.” In negotiating this agreement with Wilshire, Gail Chester, a lawyer for Central Jersey Legal Services, represented plaintiff.

By the end of September 2005, plaintiff had made payments totaling $24,800 under the agreement — the $11,000 lump sum payment and twelve monthly payments of $1,150. However, plaintiff missed four payments during this period. The trial court calculated, and plaintiff agreed, that she was in arrears $6,461.89 as of October 2005. A sheriff’s sale was scheduled but cancelled because the parties entered into a new written agreement in October 2005. Plaintiff was contacted directly; neither Wilshire nor U.S. Bank notified Ms. Chester, the attorney who represented plaintiff on the first agreement.

In negotiating this second agreement, which was entirely in English, Wilshire dealt solely with plaintiff, who did not speak or read English (Spanish is her native language) and who only had a sixth-grade education. Wilshire’s own notes indicate that “borrower does not speak English[;] negotiating has been difficult,” that plaintiff was disabled and on a fixed income of $600 per month, and that plaintiff did not want to sell the property because it had been in the family for many years.

In this second agreement signed by plaintiff, arrearages, including foreclosure fees and costs, were fixed at $10,858.18.[7] Thus, the arrearages in this agreement were $4,396.29 more than that calculated earlier by the chancery court. Plaintiff agreed to make a lump sum payment of $2,200 and then monthly payments of $1,000 through October 2006. As in the first agreement, Wilshire agreed to discharge the foreclosure action when the mortgage payments became current. This agreement also included the message: “THIS IS AN ATTEMPT TO COLLECT A DEBT.”

In September 2006, the attorney for U.S. Bank copied plaintiff on a letter to the sheriff’s office stating that the previously scheduled sheriff’s sale had been adjourned to October 4, 2006. Yet plaintiff had not missed a single payment required by the 2005 agreement. Indeed, plaintiff had made not only all required payments through October 2006 but also additional payments. Thus, the loan was current, but Wilshire had not dismissed the foreclosure action as promised.

Plaintiff took the letter from U.S. Bank’s attorney to Ms. Chester of Legal Services. Having no knowledge of the second agreement, Ms. Chester wrote to the bank’s attorney that plaintiff had paid $20,569.32 in excess of her regular monthly payment, $699.31, since the May 2004 agreement (the first agreement). Ms. Chester suggested that it was time to return plaintiff to the monthly payment schedule of $699.31. The bank’s attorney did not respond. Rather, in October 2006, Wilshire sent a letter to plaintiff noting that the second agreement was about to expire and that a new agreement needed to be negotiated otherwise it would resume foreclosure on her property. Ms. Chester contacted the Wilshire Loan Workout Compliance Department seeking answers to the status of plaintiff’s obligations. Wilshire then forwarded to Ms. Chester the second agreement. Wilshire could not explain how it had come to the $10,858.18 arrears set in the October 2005 agreement, nor could it explain why plaintiff was not deemed current on the loan.

Additionally, in the period after the chancery court’s entry of the foreclosure judgment in April 2004, plaintiff had given Wilshire proof that her residence was covered by homeowner’s insurance. Nevertheless, Wilshire required her to purchase additional and unnecessary homeowner’s insurance, known as force-placed insurance.[8] The charges for this force-placed insurance — for various non-consecutive periods between December 2004 and September 2009 — totaled $3,346.48.

B.

In July 2007, plaintiff filed a complaint in the Chancery Division, Superior Court, Middlesex County, alleging that defendants Wilshire and U.S. Bank engaged in deceptive and unconscionable practices in violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-2. In particular, plaintiff claimed that defendants, knowing that she did not read or speak English and knowing she had previously been represented by an attorney, contacted her directly to negotiate the October 2005 agreement that was written entirely in English. The complaint asserts that Wilshire included in the October 2005 agreement improper costs and fees in calculating her arrearages and demanded amounts that were not due and owing. Plaintiff sought treble damages against Wilshire, attorneys’ fees against both defendants, a declaration stating “the correct principal balance on the mortgage loan” and “that the mortgage loan in issue is not in arrears,” and an order from the court directing “defendants to take the steps necessary to have the judgment of foreclosure vacated.”

After taking some discovery, plaintiff and defendants each moved for summary judgment. The chancery court granted summary judgment in favor of defendants and dismissed plaintiff’s CFA complaint. The court held that the CFA does not apply to “post-judgment settlement agreements entered into to stave off a foreclosure sale.” The court reasoned “that the Legislature never intended the [CFA] to apply to settlement agreements entered into by parties to a lawsuit” and that to read the CFA otherwise “would undermine the settlement of foreclosure actions and potentially the settlement of all lawsuits.” The court characterized plaintiff’s motives as “transparent — the potential ability to win treble damages and attorneys’ fees.” The court concluded that the only “appropriate mechanism for [p]laintiff to seek relief is to file a motion to vacate, modify, or enforce the settlement.”

C.

In an opinion authored by Judge Payne, the Appellate Division reversed and reinstated plaintiff’s CFA claim. Gonzalez v. Wilshire Credit Corp., 411 N.J. Super. 582, 595 (App. Div. 2010). The panel viewed the post-judgment agreements between plaintiff and defendants as “unquestionably contracts” covered by the CFA. Id. at 593 & n.7. The panel rejected the argument that there was no “privity” between plaintiff and Wilshire because the initial loan was executed with Diaz, and further noted that “privity is not a condition precedent to recovery under the CFA.” Id. at 594 & n.9. The panel found that plaintiff’s “status as a signatory to the [post-judgment] agreements . . . with Wilshire provides her with standing under the CFA.” Id. at 594.

It viewed plaintiff’s CFA claim, in essence, as a charge that Wilshire wrongly transformed “the terms of annually or biannually renegotiated agreements . . . into a never-terminating cash cow.” Id. at 590. The panel reasoned that, if proven, the monetary damages suffered by plaintiff from Wilshire’s alleged unconscionable practices met the “ascertainable loss” requirement under the CFA. Id. at 594.

The panel did not hold that most settlements would be subject to the CFA. Id. at 593. However, the panel concluded that in this case CFA coverage would be warranted because the post-judgment agreements signed by plaintiff were similar to the cure-and-reinstatement agreements under the Fair Foreclosure Act (FFA), N.J.S.A. 2A:50-53 to -68, which permits debtor mortgagors to cure a default at anytime until the order of final judgment.[9] Gonzalez, supra, 411 N.J. Super. at 589-90, 593. The panel explained that had plaintiff been the initial debtor and the attempts to cure default occurred before entry of the foreclosure order, this state’s case law would give CFA protection to the agreements. Id. at 593. The panel found “no principled reason to distinguish” the transactions of a non-debtor mortgagor completed after judgment. Id. at 593-94.

The panel disagreed with the chancery court that plaintiff’s only recourse to Wilshire’s allegedly wrongful conduct was to move for a modification of the “settlement” with Wilshire. Id. at 594-95. The panel maintained that the CFA’s remedies were created to address the circumstances that allegedly occurred here. Id. at 595. The purpose of the treble-damages provision was intended to punish those who engage in unconscionable consumer practices and the purpose of the counsel-fee provision was to allow the victim “`to attract competent counsel.'” Ibid. (quoting Wanetick v. Gateway Mitsubishi, 163 N.J. 484, 490 (2000)). The panel concluded that plaintiff could withstand Wilshire’s motion for summary judgment and that the trial court improperly determined that the CFA was inapplicable to plaintiff’s claim. Ibid.

We granted defendants’ petition for certification. Gonzalez v. Wilshire Credit Corp., 202 N.J. 347 (2010). We also granted the motions of the New Jersey Attorney General, the New Jersey Bankers Association, and Legal Services of New Jersey to participate as amici curiae.

II.

Defendants contend that that the Appellate Division erred because “a judgment creditor’s agreement to forbear from conducting a sheriff’s sale in exchange for payments” and the servicing of a “mortgage loan” are not covered transactions under the CFA. Generally, they argue that allowing a non-debtor mortgagor who enters into post-foreclosure-judgment settlement agreements to pursue a CFA action against a mortgagee/judgment holder and its servicing agent “will significantly limit the willingness of lenders to workout loans in foreclosure.” Defendants point out that plaintiff is not protected by the FFA because she was not required “to pay the obligation secured by the residential mortgage,” (quoting N.J.S.A. 2A:50-55), and because “the statutory right to cure and reinstate expires upon the entry of final judgment” (citing N.J.S.A. 2A:50-55). Defendants assert that the Appellate Division, without authority, “has essentially granted Diaz’s rights under the loan to [plaintiff].” They also posit that the entry of the foreclosure judgment extinguished the initial mortgage and note, and therefore the agreements between plaintiff and defendants were not loan transactions that would trigger the CFA under New Jersey’s jurisprudence. According to defendants, ample safeguards are available in the chancery court, and plaintiff “is free to pursue common law claims such as breach of contract and/or fraud,” but not a CFA claim.

Amicus New Jersey Bankers Association urges this Court to reverse the Appellate Division for three principal reasons. It claims that the application of the CFA to post-judgment settlement agreements will: 1) undermine New Jersey’s “public policy of encouraging the settlement of litigation”; 2) discourage banks and lenders from settling with homeowners in foreclosure actions, thus threatening this State’s policy of preserving homeownership; and 3) disrupt foreclosure practices in the chancery courts by allowing settlement agreements to be collaterally attacked by CFA lawsuits. It also maintains that the Legislature expressed its intent to leave “post-foreclosure judgment settlements” unregulated by not applying the “cure and default provisions of the FFA” to such settlements.

Plaintiff counters that unconscionable practices by a lender and its servicing agent in the post-foreclosure-judgment setting — for example, agreeing to accept “installment payments to bring a mortgage current” and then misappropriating those payments — constitute violations of the CFA. According to plaintiff, Wilshire fraudulently converted thousands of dollars of mortgage payments, which should have been applied to interest and principal on the loan, to pay for “force placed insurance on a property that was already insured.” Plaintiff asserts that whether the FFA applies to the facts of this case does not control whether the CFA provides specific remedies for the allegedly fraudulent conduct of defendants. Having the right to proceed with a foreclosure sale, but instead choosing to accept tens of thousands of dollars from plaintiff to pay arrears on interest and principal, did not give defendants a license to violate the CFA at plaintiff’s expense. Plaintiff insists that agreements between a homeowner and a lender and its servicing agent following foreclosure do not “preclude CFA coverage” merely because she might have other remedies, such as enforcement or modification of the unfair agreements. In particular, plaintiff notes that the CFA’s attorneys’ fees provision provides plaintiff with a mechanism for securing counsel to combat fraud. By plaintiff’s accounting, lenders and servicing agents will continue to work with homeowners even after foreclosure because it is in their financial interests to do so; they just cannot violate the CFA with impunity.

Amicus Attorney General of New Jersey professes that because mortgage loan servicing is “the subsequent performance of the initial extension of credit,” it therefore is a protected activity under the CFA. The Attorney General notes that “because most residential mortgages are now securitized,” servicing agents, such as Wilshire, manage the loans rather than the originators of those loans. She observes that the role of the servicer is not just to collect mortgage payments, but also to manage defaulted loans, to oversee foreclosure proceedings, and to attempt a restructuring of the loan for the consumer. She also recognizes that “servicers can inflict unwarranted fees” on consumers, such as force-placed insurance, while those consumers have limited ability to contest questionable practices due to the inherent difficulty in “untangling complicated billing and payment histories and identifying improper charges . . . and errors in calculations.” She believes that loan servicers rely on these constraints and expect that a refund and apology will be satisfactory when the “rare borrower does undertake the effort and finds overcharges.” The Attorney General states that servicing abuses have “exacerbated the foreclosure crisis by making it difficult if not impossible for many delinquent borrowers to qualify for viable permanent modifications” of their loans. The Attorney General concludes that there is a cognizable claim under the CFA when a servicing agent of a loan charges impermissible fees and the consumer suffers an ascertainable loss.[10]

Amicus Legal Services of New Jersey urges this Court to apply the remedies available under the CFA to address the “well-documented and widespread” abuses in “mortgage collection practices” that are threatening homeownership among the most vulnerable in our society. Legal Services targets the mortgage servicing agent as the newly formed entity capitalizing from predatory lending. Legal Services explains that under the traditional mortgage-loan model, the original lender retained and serviced the loan. That model has given way to a new reality in which a mortgage loan is sold by the originating lender and then “bundled into a pool of loans” that are sold for investment as a “Residential Mortgage Back Security.” One such example is Cityscape Home Equity Loan Trust 1997-B, Inc.

A servicing agent is retained to perform various duties on behalf of the trust pursuant to a “Pooling and Servicing” agreement.[11] The servicing agent collects and applies loan payments, manages defaulting loans through foreclosure, and engages in loss mitigation.[12] One way in which the servicing agent receives compensation is through the retention of ancillary fees — late fees, expenses related to the handling of defaulted mortgages, and commissions from force-placed insurance.[13] According to Legal Services, the servicing agent “actually profits from default” and has a “financial incentive to impose additional fees on consumers.”[14] Within this industry, documented abuses include “the misapplication of payments; charging fees that are fabricated, unwarranted and/or not contracted for; and engaging in coercive collection practices.”[15] Because there is little regulation of the servicing agents, Legal Services maintains the consumer-protection remedies of the CFA are a critically important monitoring device.

Legal Services asserts that the repayment agreements at issue here constitute the “subsequent performance of the extension of credit,” an activity covered by the CFA. It insists that the foreclosure judgment and agreements do not provide Wilshire with CFA immunity. Unlike typical settlement agreements, the agreement here “flow[s] from the obligations in the original mortgage,” “reflect[s] a forbearance of a right under an existing CFA-covered agreement in which the lender retains all of the rights it already had,” and “the same property that secured the original obligation continues to secure the modified payment obligation.” Legal Services’s central point is that “deterring overreaching in mortgage settlements . . . will enable homeowners to pay their just debts and remain in their homes.”

III.

We must determine whether the manner in which Wilshire secured and executed the post-foreclosure-judgment agreements, as described by plaintiff, constitutes an unconscionable practice prohibited by the CFA. In doing so, we must first define the general purposes and scope of the CFA. Then, we must decide whether plaintiff’s post-judgment agreements to pay the loan arrears, which included late fees and force-placed insurance, in expectation of the reinstatement of the loan, and Wilshire’s collection efforts, are covered by the CFA.

The Consumer Fraud Act, N.J.S.A. 56:8-1 to -195, provides a private cause of action to consumers who are victimized by fraudulent practices in the marketplace. Lee v. Carter-Reed Co., 203 N.J. 496, 521 (2010). The Attorney General has independent authority to enforce the CFA. Cox v. Sears Roebuck & Co., 138 N.J. 2, 14-15 (1994). The CFA is intended to “be applied broadly in order to accomplish its remedial purpose, namely, to root out consumer fraud,” Lemelledo v. Beneficial Mgmt. Corp. of Am., 150 N.J. 255, 264 (1997), and therefore to be liberally construed in favor of the consumer, Cox, supra, 138 N.J. at 15. Because the “`fertility'” of the human mind to invent “`new schemes of fraud is so great,'” the CFA does not attempt to enumerate every prohibited practice, for to do so would “severely retard[] its broad remedial power to root out fraud in its myriad, nefarious manifestations.” Lemelledo, supra, 150 N.J. at 265 (quoting Kugler v. Romain, 58 N.J. 522, 543 n.4 (1971)). Thus, to counteract newly devised stratagems undermining the integrity of the marketplace, “[t]he history of the [CFA] [has been] one of constant expansion of consumer protection.” Gennari v. Weichert Co. Realtors, 148 N.J. 582, 604 (1997).

A consumer who can prove “(1) an unlawful practice, (2) an `ascertainable loss,’ and (3) `a causal relationship between the unlawful conduct and the ascertainable loss,’ is entitled to legal and/or equitable relief, treble damages, and reasonable attorneys’ fees, N.J.S.A. 56:8-19.” Lee, supra, 203 N.J. at 521 (quoting Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009)). An unlawful practice under the CFA is the

use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby.

[N.J.S.A. 56:8-2 (emphasis added).]

The term “advertisement” is defined, in pertinent part, as “the attempt . . . to induce directly or indirectly any person to enter or not enter into any obligation or acquire any title or interest in any merchandise or to increase the consumption thereof or to make any loan.” N.J.S.A. 56:8-1(a) (emphasis added). The term “merchandise” includes “goods, commodities, services or anything offered, directly or indirectly to the public for sale.” N.J.S.A. 56:8-1(c).

The broad language of these provisions encompasses “the offering, sale, or provision of consumer credit.” Lemelledo, supra, 150 N.J. at 265. Indeed, the term “advertisement” includes within its breadth “the attempt . . . to induce . . . any person . . . to make any loan.” N.J.S.A. 56:8-1(a); accord Lemelledo, supra, 150 N.J. at 265. The CFA applies to such activities as “lending” and the sale of insurance related to the loan. Lemelledo, supra, 150 N.J. at 259-60, 265-66 (noting that CFA covers practice of loan packing, defined as “increasing the principal amount of a loan by combining the loan with loan-related services, such as credit insurance, that the borrower does not want”). More particularly, the CFA has been held to apply to the unconscionable terms of a home improvement loan secured by a mortgage on the borrower’s home, Assocs. Home Equity Servs., Inc. v. Troup, 343 N.J. Super. 254, 264-65, 278-80 (App. Div. 2001), and to the unconscionable loan-collection activities of an assignee of a retail installment sales contract, Jefferson Loan Co. v. Session, 397 N.J. Super. 520, 538 (App. Div. 2008). Accordingly, collecting or enforcing a loan, whether by the lender or its assignee, constitutes the “subsequent performance” of a loan, an activity falling within the coverage of the CFA. Ibid.; accord N.J.S.A. 56:8-2.

Under the CFA, “[a]ny person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use” of an unconscionable commercial practice may bring a lawsuit seeking, among other things, treble damages. N.J.S.A. 56:8-19 (emphasis added). An ascertainable loss includes, for example, a loss incurred through improper loan packing — forcing a borrower to purchase unnecessary insurance. Cf. Lemelledo, supra, 150 N.J. 259-60, 266.

IV.

In determining whether plaintiff has stated an actionable claim under the CFA, we now apply these principles to the facts before us. We begin by reviewing plaintiff’s status with Cityscape, the initial lender/mortgagee.

A.

Cityscape loaned $72,000 to Monserate Diaz with whom plaintiff co-owned a home. Plaintiff and Diaz secured that loan by mortgaging their home to Cityscape. Clearly, Cityscape’s loan to Diaz was contingent on plaintiff signing the mortgage papers, which listed both as borrowers. Although in any technical sense plaintiff was not a borrower, she was still in a very real sense indebted to Cityscape. The terms of the mortgage obligated plaintiff to surrender her one-half interest in her home in the event of a default and later foreclosure judgment. Plaintiff may not have been personally obligated to pay the loan, but she would not have had a roof over her head unless she did so. A covered activity under the CFA is an “attempt . . . to induce directly or indirectly any person to enter or not enter into any obligation,” N.J.S.A. 56:8-1(a) (defining “advertisement”), concerning “anything offered, directly or indirectly to the public for sale,” N.J.S.A. 56:8-1(c) (defining “merchandise”). As mentioned earlier, the CFA prohibits an “unconscionable commercial practice . . . in connection with the sale or advertisement of any merchandise or real estate.” N.J.S.A. 56:8-2. Extending credit and loan packing are covered by the CFA. Lemelledo, supra, 150 N.J. at 265-66.

We need not address whether Cityscape had a direct relationship with plaintiff, whether called privity or not, that placed plaintiff within the protective ambit of the CFA. See Perth Amboy Iron Works, Inc. v. Am. Home Assurance Co., 226 N.J. Super. 200, 210-11 (App. Div. 1988) (noting that contractual privity between consumer and seller is not required to bring CFA claim), aff’d o.b., 118 N.J. 249 (1990). What is important is that (1) the assignment of the note and mortgage to U.S. Bank (as trustee for Cityscape Home Equity Loan Trust 1997-B) and the appointment of Wilshire as the servicing agent merely substituted those entities for Cityscape in its relationship with plaintiff and that (2) U.S. Bank through its servicing agent, Wilshire, contracted directly with plaintiff in two separate post-foreclosure-judgment agreements. Those agreements clearly establish privity between plaintiff and U.S. Bank and Wilshire.

B.

The key issue before us is whether the CFA governs extensions of credit after a foreclosure judgment.

After Diaz died in 1999, plaintiff continued to make payments on the loan until hard times came upon her. In 2001, she was laid off from the job she held for seventeen years and sometime afterwards she suffered a heart attack. Given her circumstances, in 2003, she was approved for Social Security disability benefits. That year, U.S. Bank filed a foreclosure complaint, and in 2004 U.S. Bank obtained a judgment in the amount of $80,454.71 plus interest and costs, including $954.55 in attorneys’ fees on the defaulted loan. The chancery court ordered that the mortgaged premises — plaintiff’s home — be sold to satisfy the judgment.

Unquestionably, U.S. Bank had the right to proceed with a sheriff’s sale to satisfy its judgment. Had it done so, plaintiff admittedly would have had no reason to complain. But U.S. Bank and its servicing agent, Wilshire, chose a different path. They decided to give plaintiff the opportunity to reclaim her home conditioned on her satisfying the terms of signed agreements with Wilshire. Plaintiff was required to pay, on a monthly basis, arrearages on the loan, which included built-in foreclosure costs, interest, late fees, counsel fees, and force-placed insurance. For plaintiff, the fulfillment of the agreements held out the prospect of the dismissal of the foreclosure judgment and the probable reinstatement of the loan. In both agreements, defendants stipulated that the foreclosure action would be dismissed when plaintiff became current on the loan.

As a practical matter, both the first and second agreements were nothing more than a recasting of the original loan, allowing Wilshire to recoup for its client, U.S. Bank, past-due payments. As a signatory to the agreement, plaintiff was obligated to make the regular monthly payment of $699.31 plus the additional costs already described. Wilshire as the servicing agent was not acting for selfless purposes; it stood to profit through fees it generated by managing the loan. Both agreements stated that Wilshire’s purpose was “AN ATTEMPT TO COLLECT A DEBT.”

Defendants argue that the post-judgment agreements with plaintiff and Wilshire’s collection activities cannot be denominated as the “subsequent performance” of the loan to Diaz, see N.J.S.A. 56:8-2, because that loan merged into the final foreclosure judgment, see Va. Beach Fed. v. Bank of N.Y., 299 N.J. Super. 181, 188 (App. Div. 1997); Wash. Mut., FA v. Wroblewski, 396 N.J. Super. 144, 149 (Ch. Div. 2007). The cited cases support the general rule that a loan no longer exists after a default leads to the entry of a final judgment. But the doctrine of merger is an equitable principle that requires an examination of all the facts and circumstances, 30A Myron C. Weinstein, New Jersey Practice, Law of Mortgages § 31.36 (2d ed. 2000), and “the presumption of merger” can be overcome if it can be shown that the parties had a contrary intent, Anthony L. Petters Diner, Inc. v. Stellakis, 202 N.J. Super. 11, 18-19 (App. Div. 1985). Moreover, equity cannot be invoked by one with unclean hands to do injustice. See Borough of Princeton v. Bd. of Chosen Freeholders of Mercer, 169 N.J. 135, 158 (2001). Here, plaintiff counters that the post-judgment agreements treated the initial loan as a continuing debt to be collected, and therefore Wilshire’s “subsequent” unconscionable collection practices fall within the scope of the CFA.[16] We need not decide this issue because ultimately we conclude that the post-judgment agreements, standing alone, constitute the extension of credit, or a new loan, and that Wilshire’s collection activities may be characterized as “subsequent performance” in connection with the extension of credit. See N.J.S.A. 56:8-2 (prohibiting fraud “in connection with” “subsequent performance” of loan).

C.

The post-judgment agreements between plaintiff and Wilshire were not ordinary settlement agreements; they were forbearance agreements. They retained every characteristic of the initial loan — and more. Plaintiff was still paying off $72,000 in principal that Diaz borrowed at an annual interest rate of 11.250 percent. With both agreements, plaintiff was still making the regular monthly payments of $699.31, along with a host of additional charges: late payment fees, foreclosure costs, attorneys’ fees, insurance fees on the subject property, and interest on the arrearages. The May 2004 agreement involved the payment of a lump sum of $17,612.84 and monthly payments of $1,150 for two years. The October 2005 agreement involved the payment of a lump sum of $2,200 and then monthly payments of $1,000. Once plaintiff satisfied the arrearages and made the loan current, the agreements called for the dismissal of the foreclosure action and presumably for the reinstatement of the loan according to its original terms.

To consider Wilshire’s collection activities concerning these post-foreclosure-judgment agreements as something other than “subsequent performance” in connection with a newly minted loan cannot be squared with either the form or the substance of the agreements. Theoretically, plaintiff could have obtained a loan from a bank to pay off U.S. Bank’s judgment under similar terms as set forth in the May 2004 and October 2005 agreements. If Wilshire were the servicing agent on that loan, it could not engage in unconscionable collection practices without offending the CFA. And if that is true, it is hard to countenance an end-run around the CFA by declaring the present agreements to be something other than the “offering, sale, or provision of consumer credit.” See Lemelledo, supra, 150 N.J. at 265.

D.

We roundly reject defendants’ argument that the collection activities of a servicing agent, such as Wilshire, do not amount to the “subsequent performance” of a loan, a covered activity under the CFA. The Attorney General and Legal Services, as amici, both have outlined the abusive collection practices of servicing agents for Residential Mortgage Back Securities. We are in the midst of an unprecedented foreclosure crisis in which thousands of our citizens stand to lose their homes, and in desperation enter into agreements that extend credit — post-judgment — in the hope of retaining homeownership. Defendants would have us declare this seemingly unregulated area as a free-for-all zone, where predatory-lending practices are unchecked and beyond the reach of the CFA. Yet, the drafters of the CFA expected the Act to be flexible and adaptable enough to combat newly packaged forms of fraud and to be equal to the latest machinations exploiting the vulnerable and unsophisticated consumer. See Lemelledo, supra, 150 N.J. at 265; cf. Gennari, supra, 148 N.J. at 604.

The victims of these unsavory practices are most often the poor and the uneducated, and in many circumstances those with little understanding of English, and therefore the “need” for the protections of the CFA is “most acute” in such cases. See Kugler, supra, 58 N.J. at 544. Accepting as we must the evidence in the light most favorable to plaintiff in the procedural context of this case, Wilshire’s alleged exploitation of Blanca Gonzalez placed her on a credit merry-go-round, a never-ending ride driven by hidden and unnecessary fees that would keep her in a constant state of arrearages. Although plaintiff had been represented by a Legal Services attorney during the foreclosure proceedings and the negotiation of the May 2004 post-judgment forbearance agreement, defendants contacted plaintiff directly in September 2005. Plaintiff had missed making several payments after paying off $24,800 under the May 2004 agreement.

Threatening a sheriff’s sale of her home, Wilshire inexplicably negotiated a new agreement directly with the unrepresented plaintiff, who could neither read nor speak English, who had only a sixth-grade education, and who was disabled and on a fixed income. The chancery court had calculated plaintiff’s arrearages as $6,461.89 as of October 2005, and yet defendants had plaintiff sign an agreement setting the arrearages at $10,858.18. Even though plaintiff had made every payment and was current under that second agreement, defendants nevertheless threatened another sheriff’s sale in October 2006. At this time, plaintiff contacted her Legal Services attorney, Ms. Chester, who asked Wilshire to answer a few simple questions. Wilshire could not explain how it had arrived at the $10,858.18 arrearages figure in the October 2005 agreement. It also could not explain how plaintiff’s loan was not current, given that plaintiff had paid $20,569.32 in excess of the regular monthly payments since May 2004.

Within the October 2005 agreement, plaintiff was paying for force-placed insurance that she did not want or need and for defendant’s counsel fees that had not been adequately justified. The $3,346.48 paid by plaintiff for force-placed insurance — another form of loan packing — could constitute an “ascertainable loss” under the CFA. See Lemelledo, supra, 150 N.J. at 259-60, 265-66; Jeff Horowitz, Ties to Insurers Could Land Mortgage Servicers in More Trouble, Am. Banker, Nov. 10, 2010, available at http://www.americanbanker.com/issues/175_216/ties-to-insurers-servicers-in-trouble-1028474-1.html (last visited July 28, 2011) (noting that force-placed insurance is often not only unwarranted but also often costs homeowners ten times more than typical insurance policies).

Lending institutions and their servicing agents are not immune from the CFA; they cannot prey on the unsophisticated, those with no bargaining power, those bowed down by a foreclosure judgment and desperate to keep their homes under seemingly any circumstances.

We do not agree with defendants that the only option available to plaintiff in this case was to seek relief from the post-judgment agreements in the chancery court or “to pursue common law claims such as breach of contract and/or fraud.” Defendants also argue that a number of federal and state statutes regulate the “mortgage lending and servicing” area, but insist that we declare that the CFA is not an available remedy. That we will not do. The CFA explicitly states that the “rights, remedies and prohibitions” under the Act are “in addition to and cumulative of any other right, remedy or prohibition accorded by the common law or statutes of this State.” N.J.S.A. 56:8-2.13; accord Lemelledo, supra, 150 N.J. at 268.

Moreover, Legal Services is only capable of representing a fraction of those low-income consumers who are similarly situated to Blanca Gonzalez,[17] and the Attorney General has limited resources. The CFA was intended to fill that vacuum. One of the important purposes of the CFA’s counsel-fees provision is to provide a financial incentive for members of the bar to become “`private attorneys general.'” Lemelledo, supra, 150 N.J. at 268 (quotation omitted); accord N.J.S.A. 56:8-19. The cumulative-remedies and counsel-fees provisions of the CFA “reflect an apparent legislative intent to enlarge fraud-fighting authority and to delegate that authority among various governmental and nongovernmental entities, each exercising different forms of remedial power.” Lemelledo, supra, 150 N.J. at 269. The poor and powerless benefit from the guiding hand of counsel offered through the CFA.

The equitable and legal remedies available against violators of the CFA, such as the provision for treble damages, reasonable attorneys fees, and costs of suit, N.J.S.A. 56:8-19, also serve another important legislative purpose. That purpose “is not only to make whole the victim’s loss, but also to punish the wrongdoer and to deter others from engaging in similar fraudulent practices.” Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 12 (2004); accord Cox, supra, 138 N.J. at 21.

Defendants and amicus New Jersey Bankers Association also argue that application of the CFA to post-judgment-foreclosure agreements and corresponding collection efforts by servicing agents will discourage work-outs by lenders and lead to sheriff’s sales, thus in the end diminishing not enhancing the prospect of homeownership. They go even further and posit that applying the CFA to the facts of this case will place in jeopardy all settlement agreements. We do not agree.

The CFA is intended to curtail deceptive and sharp practices that victimize or disadvantage consumers in the marketplace, see Lee, supra, 203 N.J. at 521; it is not intended to curtail commerce itself. Defendants have made no showing that the CFA, which applies to myriad business activities, has dampened enthusiasm for the profit motive. Those businesses dealing with the public fairly and honestly, eschewing unconscionable practices, have nothing to fear, except the occasional frivolous lawsuit for which there are separate remedies. See, e.g., N.J.S.A. 2A:15-59.1(a) (permitting costs and attorneys’ fees for frivolous lawsuits). The Legislature already has made the policy decision that the greater good that flows from the remedies available under the CFA outweighs any negligible negative effect that it might have on commerce. Merchants are still selling their wares long after passage of the CFA.

Lenders extend credit to consumers for purchasing automobiles, houses, home improvements, and for numerous other items despite the applicability of the CFA. See Lemelledo, supra, 150 N.J. at 265; Troup, supra, 343 N.J. Super. at 278. We are confident that lenders and their servicing agents will continue to negotiate work-outs even in a post-foreclosure-judgment setting when it is in their interest to do so. Lenders want a return on their capital, not to buy and sell homes.

Plaintiff has made allegations and presented evidence that still must survive the crucible of a trial. Plaintiff must prove that defendants acted contrary to the permissible standard of conduct under the CFA. Cox, supra, 138 N.J. at 18 (“The standard of conduct that the term `unconscionable’ implies is lack of `good faith, honesty in fact and observance of fair dealing.'” (quoting Kugler, supra, 58 N.J. at 544)).

This case in no way suggests that settlement agreements in general are now subject to the CFA. Here, we are dealing with forbearance agreements. This case addresses only the narrow issue before us: the applicability of the CFA to a post-foreclosure-judgment agreement involving a stand-alone extension of credit. We hold only that, in fashioning and collecting on such a loan — as with any other loan — a lender or its servicing agent cannot use unconscionable practices in violation of the CFA.

V.

For these reasons, we affirm the judgment of the Appellate Division vacating the dismissal of plaintiff’s complaint. We therefore reinstate plaintiff’s cause of action under the CFA and remand for proceedings consistent with this opinion.

CHIEF JUSTICE RABNER and JUSTICES LONG, RIVERA-SOTO and HOENS join in JUSTICE ALBIN’s opinion. JUSTICE LaVECCHIA did not participate.

[1] The parties, the trial court, and the Appellate Division have referred to the post-judgment agreements in this case as “settlement agreements.” The more precise term is “forbearance agreements,” which are agreements to refrain “from enforcing a right, obligation, or debt.” See Black’s Law Dictionary 673 (8th ed. 2004). In summarizing the parties’ arguments and the courts’ opinions, we recite their terminology despite its imprecision.

[2] “A tenancy in common is the holding of an estate by different persons, with a unity of possession and the right of each to occupy the whole in common with the [other]. The interest of a tenant in common may, absent some contractual undertaking, be transferred without the consent of the [other cotentant].” Capital Fin. Co. of Del. Valley, Inc. v. Asterbadi, 389 N.J. Super. 219, 225 (Ch. Div. 2006) (internal citations omitted); accord Burbach v. Sussex Cnty. Mun. Utils. Auth., 318 N.J. Super. 228, 233-34 (App. Div. 1999); Black’s Law Dictionary 1506 (8th ed. 2004). The death of one tenant does not give a legal right to the whole of the property to the surviving tenant. See Weiss v. Cedar Park Cemetery, 240 N.J. Super. 86, 97 (App. Div. 1990).

[3] We present plaintiff’s best case in this statement of facts. We do so because defendants succeeded on their motion to dismiss plaintiff’s complaint on summary judgment, and therefore we “must view the facts in the light most favorable to the non-moving party” — plaintiff. See Bauer v. Nesbitt, 198 N.J. 601, 604-05 n.1 (2009); R. 4:46-2(c) (stating that party’s motion for summary judgment should be granted when “there is no genuine issue as to any material fact challenged and . . . the moving party is entitled to a judgment or order as a matter of law”). A number of the “facts” presented here are disputed by defendants.

[4] At all times material to plaintiff’s complaint, Wilshire was a wholly owned subsidiary of Merrill Lynch Mortgage Capital, Inc., which in turn was a wholly owned subsidiary of Merrill Lynch & Co., Inc. During the pendency of this case, on January 1, 2009, Bank of America Corporation acquired Merrill Lynch & Co., Inc. and its subsidiaries, including Wilshire. As part of that acquisition, Wilshire’s operations have been merged into and assumed by BAC Home Loan Services, LP, an indirectly wholly owned subsidiary of Bank of America and, effective March 3, 2010, BAC Home Loan Services, LP started servicing plaintiff’s post-foreclosure-judgment loan that is the subject of this appeal.

[5] The record does not indicate whether anyone has come forward asserting an interest in Diaz’s portion of their jointly owned property.

[6] After applying the $11,000 lump sum payment, the balance due was $6,612.84. The $1,150 monthly payments consisted of: $699.31, the current monthly payment as it became due; $34.97, a monthly late fee assessed until the account became current; and $415.72, an amount applied to the fixed arrears.

[7] Based on plaintiff’s review of discovery, a substantial amount of her arrears was attributable to legal fees supposedly incurred by defendants. Plaintiff complains that, because the services for those fees are not adequately described, the legitimacy of the fees cannot be determined.

[8] Force-placed insurance is insurance procured by a lending institution on collateral pledged by a borrower if the borrower fails to maintain adequate coverage. Brannon v. Boatmen’s First Nat’l Bank of Okla., 153 F.3d 1144, 1145-46 (10th Cir. 1998). The costs related to the force-placed insurance are added to the borrower’s account. Ibid.

[9] Under the Fair Foreclosure Act,

at least thirty days prior to the filing of a complaint in foreclosure, a mortgage debtor must be given a written notice, among other things, of the intent to foreclose, stating the obligation or real estate security interest; the nature of the default claimed; the right of the debtor to cure the default; the sum of money and interest required to cure the default; the date by which the default must be cured to avoid institution of foreclosure proceedings; and the right to cure after foreclosure proceedings have been commenced.

[Gonzalez, supra, 411 N.J. Super. at 589 (citing N.J.S.A. 2A:50-56).]

[10] At oral argument, the Attorney General argued that plaintiff had an actionable CFA claim under either a theory that the agreements were generated from the original loan and the collection efforts were “subsequent performance” on the loan, or under a theory that the settlement agreements were entirely new extensions of credit.

[11] (Citing Robo-Signing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing: Before the House Financial Services Committee Subcommittee on Housing and Community Opportunity, 111th Cong. 6 (2010) (written testimony of Adam J. Levitin, Associate Professor of Law, Georgetown University Law Center)).

[12] (Citing ibid.).

[13] (Citing id. at 15; Jeff Horowitz, Ties to Insurers Could Land Mortgage Servicers in More Trouble, Am. Banker, Nov. 10, 2010, available at http://www.americanbanker.com/issues/175_216/ties-to-insurers-servicers-in-trouble-1028474-1.html (last visited July 28, 2011)).

[14] (Citing Robo-Signing, supra note 10, at 15).

[15] (Generally citing Katherine Porter, Misbehavior and Mistake in Bankruptcy Mortgage Claims, 87 Tex. L. Rev. 121 (2008); National Consumer Law Center, Foreclosures: Defenses, Workouts and Mortgage Servicing (3d ed. 2010)).

[16] Plaintiff points out that under New Jersey’s Foreclosure Mediation program, as an alternative to the foreclosure of property, modification of a loan through mediation can be requested even after the entry of final judgment, up until the time of the sheriff’s sale. Administrative Office of the Courts, New Jersey Foreclosure Mediation (2009), available at http://www.judiciary.state.nj.us/civil/ foreclosure/11290_foreclosure_med_info.pdf. With this example, plaintiff contends that a foreclosure judgment may not extinguish a mortgage loan if the lender forbears from proceeding to a sheriff’s sale.

[17] “[T]wo hundred thousand eligible people do seek help from Legal Services each year. Because of inadequate resources, two-thirds must be turned away.” Legal Services of New Jersey, The Civil Justice Gap: An Inaugural Annual Report 5 (2011), available at http://www.lsnj.org/PDFs/The_Civil_Justice_Gap_2011.pdf.

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LETTER | Iowa AG: Banks may face criminal liability after robo-signing settlement

LETTER | Iowa AG: Banks may face criminal liability after robo-signing settlement


LIES: Didn’t we hear this before?

HW-

The eventual robo-signing settlement between the 50 state attorneys general and major mortgage servicers will not release these firms from any criminal and not all civil liabilities, according to Iowa AG Tom Miller.

Rep. Jerrold Nadler (D-N.Y.) and 20 members of the New York congressional delegation sent a letter to Miller Wednesday, chiding him for allegedly ousting New York AG Eric Schneiderman from the talks.

“We are deeply troubled by your recent action to silence New York’s voice by removing New York State Attorney General Eric Schneiderman from an executive committee negotiating a nationwide settlement with the banks,” Nadler wrote.

[…]

“While a final multistate case release has not been negotiated and the release is a work in progress, attorneys general on the negotiation committee are not preparing to, nor will they agree to, release the banks from all civil liability,” Miller wrote in his letter to Nadler. “We are also not preparing to, nor can we agree to, release the banks from any criminal liability.”

[HOUSING WIRE]

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Memo: BofA to Sell Correspondent Mortgage Business

Memo: BofA to Sell Correspondent Mortgage Business


WSJ-

From: Home Loan News Sent: Wednesday, August 31, 2011 4:19am Subject: Important Message From Barbara DeSoer

To All IMS Associates

I wanted to provide this team with information about a strategic announcement our Home Loans business will make today that is consistent with our ongoing efforts to align the business to the bank’s customer-driven strategy.

Earlier this year, when we split out the Legacy Asset Servicing business, we did so in order for our team to focus on the future of the home loans business. We have made significant progress over the past several months and are taking steps to further position our business to serve the needs of the bank’s 58 million households and attract new mortgage customers with the potential to support growth across the franchise.

[WALL STREET JOURNAL]

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BREAKING: Bank of America to Exit Mortgage Business

BREAKING: Bank of America to Exit Mortgage Business


It’s going to tank!

WSJ-

Bank of America Corp. intends to sell its correspondent mortgage business, as the troubled lender looks to narrow its focus and bolster its financial strength, said people familiar with the situation.

Employees could be notified as soon as Wednesday that the lender has decided to exit the correspondent channel because it no longer fits with the long-term strategy for its mortgage unit. The company decided to get out roughly four to six weeks ago, following a review led by mortgage chief Barbara Desoer. The business employs more than 1,000 people.

[WALL STREET JOURNAL]

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Federal Housing Finance Agency Action Regarding Court Consideration of Proposed Bank of America Settlement

Federal Housing Finance Agency Action Regarding Court Consideration of Proposed Bank of America Settlement


For Immediate Release

Contact:
Corinne Russell (202) 414-6921
Stefanie Johnson (202) 414-6376

August 30, 2011

Federal Housing Finance Agency Action Regarding
Court Consideration of Proposed Bank of America Settlement

The Federal Housing Finance Agency (FHFA), in its capacity as conservator of Fannie Mae and Freddie Mac (the Enterprises), today filed an Appearance and Conditional Objection regarding the proposed settlement between Bank of America and a consortium of 22 investors being considered by a court in New York. This pleading was filed to obtain any additional pertinent information developed in the matter. The conservator is aware of no basis upon which it would raise a substantive objection to the proposed settlement at this time. In fact, FHFA considers it positive that the proposed settlement includes subservicing requirements, specific terms for the servicing of troubled mortgages and the curing of certain document deficiencies. Additionally, FHFA is encouraged that a number of significant market participants support the proposed settlement.

Due to its duty to preserve and conserve Enterprise assets, the conservator believes it prudent not only to receive additional information as it continues its due   diligence of the proposed settlement, but also to reserve its capability to voice a substantive objection in the unlikely event that necessity should arise.

###

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.

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Nadler and NY Delegation Assail Iowa Attorney General for Excluding NY Attorney General from Mortgage Settlement Talks

Nadler and NY Delegation Assail Iowa Attorney General for Excluding NY Attorney General from Mortgage Settlement Talks


Tuesday, 30 August 2011

NEW YORK, NY – Today, Congressman Jerrold Nadler (D-NY), the ranking Democrat on the Judiciary Subcommittee on the Constitution, and 20 members of New York’s congressional delegation chided Iowa Attorney General Tom Miller for his dismissal of New York Attorney General Eric Schneiderman last week from ongoing mortgage settlement negotiations, demanding that Attorney General Miller explain how he intends to ensure that New York’s interests are represented during the remainder of the negotiation talks.  The national committee of state Attorneys General are working to settle numerous complex legal matters arising from the 2008 housing collapse.


“As members of the New York congressional delegation, we are united in fighting for a fair resolution of the housing crisis that has devastated tens of thousands of families across our state,” the members wrote.  “That is why we are deeply troubled by your recent action to silence New York’s voice by removing New York State Attorney General Eric Schneiderman from an executive committee negotiating a nationwide settlement with the banks.  We ask that you explain how New York’s interests will be protected as negotiations move forward.”

Below is the full text of the letter:

August 30, 2011

The Honorable Tom Miller
Attorney General
1305 East Walnut Street
Des Moines, IA 50319

Dear Attorney General Miller:

As members of the New York congressional delegation, we are united in fighting for a fair resolution of the housing crisis that has devastated tens of thousands of families across our state.  That is why we are deeply troubled by your recent action to silence New York’s voice by removing New York State Attorney General Eric Schneiderman from an executive committee negotiating a nationwide settlement with the banks.  We ask that you explain how New York’s interests will be protected as negotiations move forward.

New York’s homeowners and investors have been hit hard by the economic impact of wrongdoing related to the mortgage crisis.  According to the FBI, New York ranked as one of the top ten states for known or suspected mortgage fraud activity for two consecutive years.  It also was one of the top ten states for reports of mortgage fraud across all originations in 2010.  Undoubtedly, our state, the third largest in the nation, deserves a seat at any negotiating table that could potentially limit our state’s ability to investigate and penalize wrongdoing done within our borders.

Raising legitimate concerns about elements of the proposed settlement is a responsibility of every member of the executive committee and should never be the basis for silencing a viewpoint.  Your removal of Attorney General Schneiderman sets a dangerous precedent for other attorneys general who, out of fear of what might happen, may choose silence over voicing valid concerns with particular aspects of the proposed settlement.  Moreover, your attempt to banish opposition rather than address varying viewpoints undermines both the validity of the process and any settlement reached by the committee.

New York deserves adequate representation during the remainder of the mortgage settlement negotiations.  We look forward to hearing how you will ensure that New York’s voice is heard.

Sincerely,

Jerrold Nadler
Carolyn Maloney
Maurice Hinchey
Joseph Crowley
Edolphus Towns
Carolyn McCarthy
Jose Serrano
Gary Ackerman
Timothy Bishop
Eliot Engel
Charles Rangel
Nita Lowey
Louise Slaughter
Paul Tonko
Gregory Meeks
Bill Owens
Yvette Clarke
Kathleen Hochul
Brian Higgins
Nydia Velazquez
Steve Israel

###

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Matt Stoller: Power Politics – What Eric Schneiderman Reveals About Obama

Matt Stoller: Power Politics – What Eric Schneiderman Reveals About Obama


Absolute Must Read…

Naked Capitalism-

A lot of people have asked why New York Attorney General Eric Schneiderman is going after the banks as aggressively as he is. It’s almost unbelievable that one lone elected official, who happens to have powerful legal tools at his disposal, is doing something that no one with any serious degree of power has done. So what is the secret? What kind of machinations is he undertaking that no one else has been able to do?

I’ve known Schneiderman for a few years, back when he was a state Senator working to reform the Rockefeller drug laws. And my answer to this question is pretty simple. He wants to. That’s it. Eric Schneiderman is investigating the banks because he thinks it’s the right thing to do. So he’s doing it. This guy has thought about his politics. He wrote an article about how he sees politics in 2008 in the Nation, and in his inaugural speech as NY AG he talked about the need to restore faith in both public and private institutions. Free will still counts for something, apparently.

[NAKED CAPITALISM]

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The Man Who May Bring the Banksters to Justice (If They Don’t Break His Knees First)

The Man Who May Bring the Banksters to Justice (If They Don’t Break His Knees First)


New York State Attorney General Eric Schneiderman may will go down in history as the most important public official in reforming the corrupt financial system!!

HuffPO-

New York State Attorney General Eric Schneiderman may go down in history as the most important public official in reforming the corrupt financial system that caused the great Financial Crisis of 2008 and holding the perps responsible — if he can hold out against pressure from Wall Street, the Federal Reserve, and the Obama administration to give Wall Street a “Get Out of Jail Free” card.

Eric Schneiderman has played a key role in the investigation of foreclosure fraud and robo-signing by 50 state attorneys general against JP Morgan Chase, Bank of America, Wells Fargo, Citigroup, and Ally Bank. Reportedly, most of of the attorneys general — with the support of the Obama administration — are advocating a $20 billion settlement with the banks (less than a year’s worth of Wall Street’s bonus pool) in exchange for broad immunity from future investigations and prosecutions, not only of illegal foreclosures but of a wide range of fraudulent activity in connection with mortgage securitization over the past decade.

[HUFFINGTON POST]

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FDIC Objects to Bank of America’s Proposed $8.5 Billion Mortgage-Bond Pact

FDIC Objects to Bank of America’s Proposed $8.5 Billion Mortgage-Bond Pact


There will be NO settlement!

Via Bloomberg

The FDIC objected to Bank of America Corp. (BAC)’s proposed mortgage-bond settlement.

Filing Courtesy of Naked Capitalism & Webber3292

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Under fire, N.Y. AG wins plaudits in mortgage probe

Under fire, N.Y. AG wins plaudits in mortgage probe


Miller said he invited Schneiderman’s office in June to be part of a smaller negotiating committee, but Schneiderman declined, indicating he “would possibly pursue a different direction.”

LOL! this is telling him nicely to take his “$maller Negotiating Committee” and stuff it, I ain’t For $ale!

Baltimore Sun-

NEW YORK (Reuters) – The New York attorney general’s booting from a panel of state officials negotiating a settlement of mortgage abuses may shore up his political base and enforcement agenda.

Eric Schneiderman’s resistance to a possible $25 billion settlement being negotiated with the largest mortgage servicers has already drawn praise from groups representing minorities and organized labor.

“Anybody who takes on the banks is a hero,” political consultant Hank Sheinkopf said. “Whether he gets anything done is another story. In politics, it’s not what you do, it’s how you do it.”

[BALTIMORE SUN]

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NY AG Eric T. Schneiderman Committed To Full Investigation into Banks’ Misconduct

NY AG Eric T. Schneiderman Committed To Full Investigation into Banks’ Misconduct


Via an email from his office-

You might have been following the latest developments related to the national settlement of the mortgage probe, including this story in today’s Huffington Post about our tough fight for a comprehensive resolution to this crisis.

Let me tell you directly: I am deeply committed to pursuing a full investigation into the misconduct that led to the collapse of America’s housing market, and to seeking a resolution that gives homeowners meaningful relief, allows the housing market to begin to recover, and gets our economy moving again.

Our ongoing investigation into the housing crisis cannot be shut down to accommodate efforts to settle quickly and give banks and others broad immunity from further legal action. If you have any thoughts or concerns about this critical issue, please contact me at 1-800-771-7755, or send a message via Facebook or Twitter.

Thank you for your support,

Eric T. Schneiderman
Attorney General

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Obama Goes All Out For Dirty Banker Deal

Obama Goes All Out For Dirty Banker Deal


Dirty, Dirty, Dirty…

TAIBBLOG

A power play is underway in the foreclosure arena, according to the New York Times.

On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.

On the other side is the Obama administration, all the banks, and, now, apparently, all the other state attorneys general.

[ROLLINGSTONE]

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BREAKING: New York Removed From State Group Working on Foreclosure Fraud Settlement Deal

BREAKING: New York Removed From State Group Working on Foreclosure Fraud Settlement Deal


Truly remarkable that no one can convince Attorney General Eric Schneiderman to agree to back down! NY should support his team in any way, shape and form. He is NOT willing to let go of what is right for the NY people!

Aug. 23 (Bloomberg) — The New York Attorney General’s office was removed from a group of state attorneys general that is working on a nationwide foreclosure settlement with U.S. banks, according to a state official.

New York Attorney General Eric Schneiderman, who has raised concern about terms of a possible deal, was removed from the executive committee of state attorneys general, according to an e-mail today from Iowa Assistant Attorney General Patrick Madigan.

[BLOOMBERG]

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GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
Kenneth Eric Trent, www.ForeclosureDestroyer.com

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