Foreclosure Defense Litigation

The attorneys at the Law Offices of Joseph A. Chang & Associates, LLC are experienced foreclosure defense attorneys with a reputation for being aggressive advocates for homeowners and borrowers. We have successfully represented clients at all stages of the foreclosure process, including in the Chancery Division where emergency foreclosure matters are frequently heard.

Today, foreclosure defense law and procedure are changing at a rapid pace. It is important that you have competent, aggressive legal representation whether foreclosure is imminent or has been filed against you, no matter what stage of the process you are in.

Mr. Chang is committed to continuing education to stay abreast of current foreclosure defense law and litigation related continuing legal education.

Attendandce at: National Institute for Trial Advocacy: Building Trial Skills: New Orleans, this program qualified for approx. 49 hours of CLE credit, including Ethics and Professionalism, as a participant in Building Trial Skills, Joseph was able to use NITA's "learning-by-doing" method to learn, practicing and perfecting skills in all of the challenging arts of trial advocacy, persuasion, and communication.

He attended an intensive training seminar: "Foreclosure Defense Training: Saving Homes, Protecting Home Equity, Eliminating Predatory Lending."

Mr. Chang received a Certificate of Completion after satisfactorily completing the Advanced Foreclosure: Case Study Practicum at the Neighbor Works Training Institute Los Angeles, California, February 24-25, 2014


Know Your Rights. If you are facing foreclosure, you need to know your legal rights. The lender cannot obtain possession of your home automatically even if you have late or missed mortgage payments. The lender must formally pursue a legal action against you in court and prove it has a legal basis to foreclose. You have a right to defend yourself against the foreclosure action. This can be a complicated process.

Years ago, most homeowners did not contest a foreclosure action. Many assumed the lender had all the rights and no contest was possible. However, by law, the lender must prove it has a legal basis to foreclose. The lender must have complied with the following laws. These laws apply beginning from their advertisement of loan products, to initiation of your loan, to requirements they must follow at all stages of proceedings against you. In some circumstances, loss of your home can be prevented - even if a foreclosure action has already been filed and no matter what stage of the process you are in.

Summary of Defenses to Foreclosure. While not intended to provide a complete description, the following is a summary of laws intended to protect you as a borrower. They are defenses available to you in a foreclosure action.

The New Jersey Fair Foreclosure Act, N.J.S.A. 2A:50-53, et. seq.

The lender is required to serve you with a Notice of Intent to Foreclose at least thirty days before filing a Complaint. You must receive proper service of the Notice of Intent to Foreclose via registered or certified mail, return receipt requested. The lender must provide you with the name and address of the lender, as well as the name, telephone number and address where you should send your payment. This Notice must inform you specifically of the nature of the default that is the basis of the foreclosure, including the particular obligation or security interest. The lender must provide the right to cure the default and inform you of the amount you must pay to cure. To "cure" means to pay what you owe and have the mortgage reinstated. You have the right to cure your default at any stage of the process before final judgment.

New Jersey Consumer Fraud Act, N.J.S.A.56:8-1, et . seq.

Lenders or lenders' agents may not engage in "unconscionable" commercial practices. They are liable under this law regardless of whether a person has actually been "misled, deceived or damaged". In other words, lawmakers passed this law as a strong public policy measure so that lenders must employ "above board" practices to advertise to borrowers. The law prohibits the following practices: deception, fraud, false pretense, false promise, misrepresentation, 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 …"

Some important questions help define "predatory lending practices". Were the loan payments affordable at the time the loan was made? Did the lender or lender's agent lie or conceal the fact that the homeowner qualified for a "fixed-rate" as opposed to an "adjustable rate" mortgage? Did the lender advertise low interest rates, then sell the borrower a loan that originates at the low rate but then adjusts to a higher rate? Was a low monthly payment loan offered that failed to cover interest on the loan, resulting in an increase of the loan's principal balance?

The Truth in Lending Act (TILA)15 U.S.C.A. § 1601 et. seq.

At the time your loan was made, the lender was required under this federal law to accurately disclose to you the terms of the mortgage, including accurate statements of finance charges, annual percentage rate (APR) and payment schedules. They were also required to provide a disclosure known as a "Notice of Right to Cancel". This Notice must explain that you have a right to cancel the loan and include the time by which you must cancel and where to send the cancellation notice. This Notice must be served to anyone whose name is on the Deed, whether or not they are co-borrowers.

Fair Debt Collections Practices Act, 15 U.S.C. § 1601, et. seq.

In an attempt to collect a debt from a consumer, a collector may not make false, deceptive, or misleading representations or engage in abusive, harassing or oppressive practices. In addition, lenders must provide you with payoff and reinstatement figures or debt verification, and/or other information as requested.

Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et. seq.

You were entitled to facts and information important to the closing of your loan at the time it was made. Lenders may not have complied, or they may have used brokers acting as their agents who did not comply.


Do you know who owns your mortgage? Quite possibly, you don't. Many lenders sell their loans to other companies, often "pooling" loans and selling them as investment securities. It is highly likely that the company you have been making mortgage payments to is not the company that owns your mortgage. In addition, your payments may be going to a "servicer" who acts as a debt collector. The plaintiff who filed a complaint against you for foreclosure is required to prove it owns your loan. The plaintiff must prove it is the holder of your Note. If the Mortgage was sold, the plaintiff must hold an Assignment. This seemingly small issue has been of significant importance in many cases throughout the United States.


New Jersey Foreclosure Mediation Program. The mediation program is intended to facilitate open and fair communication between lender and borrower. Mediation allows you the opportunity to negotiate a payment plan with the lender with the assistance of a foreclosure mediator. During the mediation process, foreclosure proceedings continue but, if mediation is successful, the parties may agree to stop the foreclosure.

As a Certified Foreclosure Mediator, I understand how stressful it is to go through this process. Many of our firm's clients were first time homebuyers who were simply swept up in the irrational exuberance of the last few years. The first step is education. Although the Internet is full of good information, just as much misinformation is out there. With so much on the line it is essential that you have accurate information from a licensed, experienced attorney.

Below please find an informative announcement of the New Jersey Judiciary explaining the Foreclosure Mediation Program (link found below).

Judiciary Announces Foreclosure Mediation Program to Assist Homeowners at Risk of Losing Their Homes

Chief Justice Stuart Rabner today announced the roll-out of a statewide Judiciary program to assist homeowners in foreclosure actions. The program will provide mediators to help homeowners and lenders negotiate with one another and try to work out agreements to avoid foreclosures.

Chief Justice Rabner said, "While the courts must remain neutral in all foreclosure matters, it is in everyone's best interest to have a forum where homeowners facing foreclosure have the opportunity to negotiate to save their homes. Our goal is to get lenders and borrowers to meet at the table and work out a mutually beneficial arrangement. I encourage continued cooperation among the courts, lenders, borrowers, and the bar as we address the increasing number of foreclosure actions in New Jersey in today's difficult economic times."

Under the program, the courts will require mediation in all cases in which homeowners contest owner-occupied foreclosure actions. Volunteer mediators will meet with eligible homeowners and their lenders in an effort to resolve the foreclosure action and renegotiate the terms of mortgage agreements.

In uncontested actions, where the homeowner has failed to respond to a foreclosure complaint, the courts will notify the homeowner of the mediation program and encourage participation. If the homeowner fails to respond and a default judgment is entered, mediation will remain an option before the matter proceeds to a sheriff's sale.

The Chief Justice praised Middlesex Vicinage Assignment Judge Travis L. Francis for spearheading an innovative pilot project on foreclosure mediation. The program is operating in the Middlesex Vicinage, where volunteers from the Middlesex County Bar Association are providing free mediation services for homeowners facing foreclosure. General Equity Presiding Judge Frank M. Ciuffani has been working closely with representatives from the bar, Legal Services, and other agencies to build awareness of the program.

"The worst thing a homeowner facing a foreclosure action can do is nothing. It is critical to let homeowners know that even after a default action has been entered, there may still be a window of opportunity for borrowers and banks to work out an agreement that will avoid a sheriff's sale," said Judge Francis.

The Judiciary will expand Middlesex's model mediation program throughout the state in the coming months. In the next 30 days, the program will be expanded to Essex, Union, Ocean, Camden, Bergen, and Hudson counties, which had the highest number of recent foreclosure filings. Within 60 days, the project will be in place in all 21 counties.

During the past 12 months, the courts received 46,130 residential foreclosure filings, a 46 percent increase from the previous 12 months, when 31,667 filings were received.

In September 2008, the courts received 3,997 residential foreclosure filings, compared to 1,400 filings in September 2006. Oct 16, 2008, Judiciary Announcement

Important New Jersey Cases relating to Mortgage Foreclosure

Notice of Intent to Foreclose

Several months after final judgment was entered in residential foreclosure action, borrowers moved to vacate default judgment entered against them. The Fair Foreclosure Act (FFA) requires that a notice of intent to foreclose include the name and address of the actual lender;

US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 38 A.3d 570 (2012)

We hold that N.J.S.A. 2A:50–56(c)(11) requires that foreclosure plaintiffs list on the notice of intention the name and address of the actual lender, in addition to contact information for any loan servicer involved in the mortgage. 

US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 458, 38 A.3d 570, 574 (2012)

The Guillaumes claim that they were confused by U.S. Bank's communications to them with respect to a potential loan modification at a time when the foreclosure action was underway. The trial court properly rejected this contention, holding that the Guillaumes were fully informed of the existence of a “court process” requiring a legal response for over a year, and that U.S. Bank's communications with them regarding loan modification did not alter the analysis. Indeed, the Guillaumes were informed in writing that communications with the bank did not obviate the need to retain counsel and file a timely answer to the foreclosure complaint. There is no evidence that U.S. Bank suggested to the Guillaumes that it was unnecessary to respond to the foreclosure action; it expressly *469 advised the Guillaumes that the foreclosure action could not be ignored. Notices were detailed and informative with respect to the retention of counsel and the necessity of a responsive pleading in the foreclosure case. Before the trial court's entry of default judgment, the Guillaumes were advised that their efforts to secure a loan modification had been unsuccessful. Notwithstanding the repeated notices, the Guillaumes took no action to respond to the foreclosure complaint, and the record reflects no excuse for their inaction. 

US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 468-69, 38 A.3d 570, 581 (2012)

Enacted in 1995, the FFA was *470 intended to “advance the public policies of the State by giving debtors every opportunity to pay their home mortgages, and thus keep their homes,” while ensuring that “lenders will be benefited when debtors cure their defaults and return the residential mortgage loan to performing status.” Statement to Assembly Bill No. 1064, at 10 (Jan. 24, 1994). 

US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 469-70, 38 A.3d 570, 581 (2012)

The parties disagree about the meaning of the term “lender,” as it appears in N.J.S.A. 2A:50–56(c)(11). The Guillaumes contend that U.S. Bank is the “lender” for purposes of the statute, and that its name and address should have been identified in the notice of intention. US Bank argues that ASC, in effect, is the “lender” and that the notice therefore complied with the FFA. 

US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 471, 38 A.3d 570, 582 (2012)

But the Legislature, intending to protect homeowners at risk of foreclosure, has unmistakably directed that a homeowner shall be advised of the exact entity to which he or she owes the balance of the loan.

We disagree with the assertion, advanced by U.S. Bank and Amicus New Jersey Bankers Association, that identification of aloan servicer in lieu of the lender constitutes substantial compliance with the FFA.

US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 472, 38 A.3d 570, 583 (2012)

Here, there is a potential for significant prejudice to the “defending party,” the homeowner, by virtue of a bank's failure to identify the lender. For example, a misunderstanding about a lender's identity could prompt a homeowner to make a critical error at a time when he or she is struggling to avert foreclosure. See Laks, supra, 422 N.J.Super. at 210, 27 A.3d 1222. While the loan servicer's name, address and telephone number is significant information that should be part of a notice of intention, the lender's identity is equally important to the Legislature's objective of ensuring that homeowners at risk of foreclosure are thoroughly informed. 

US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 473, 38 A.3d 570, 583 (2012)

There is, in short, no basis in the statutory language to conclude that a notice of intention that substitutes the loan servicer for the lender achieves substantial compliance with N.J.S.A.2A:50–56(c)(11).2 Accordingly, we hold that the FFA *475 requires that a notice of intention include the name and address of the actual lender, in addition to contact information for any loan servicer who is charged by the lender with the responsibility to accept mortgage payments and/or negotiate a resolution of the dispute between the lender **585 and the homeowner. 

US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 474-75, 38 A.3d 570, 584-85 (2012)

On May 18, 2008, ASC forwarded to the Guillaumes a Notice of Intent to Foreclose (NOI) that urged them to “immediately seek the advice of an attorney(s) of your own choosing concerning this residential mortgage default.” The Guillaumesdid not seek the advice of counsel but continued to attempt a loan modification with ASC unsuccessfully. 

US Bank Nat. Ass'n v. Guillaume, No. A-0376-10T3, 2011 WL 1485258, at *1 (N.J. Super. Ct. App. Div. Apr. 20, 2011) aff'd as modified, 209 N.J. 449, 38 A.3d 570 (2012)

Concerning excusable neglect, it is undisputed that the Guillaumes were properly served with the foreclosure complaint and were fully aware of the proceedings. Rather than answer the complaint, they attempted a loan modification. The motion judge stated correctly that:

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 theyjust 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.

US Bank Nat. Ass'n v. Guillaume, No. A-0376-10T3, 2011 WL 1485258, at *2 (N.J. Super. Ct. App. Div. Apr. 20, 2011) aff'd as modified, 209 N.J. 449, 38 A.3d 570 (2012)

1604 g

Proof of Authority to Service

Judge Doyne found “Wells Fargo's role as a servicer remain[ed] unproven” as “[t]he servicing agreement defined mortgage loans as a ‘Mortgage Loan ... identified on the Mortgage Loan Schedule,’ but the mortgage loan schedule was blank.” Further, no explanation was offered to clarify why the servicing agreement was blank or how the 2004 document encompassed an assignment made in 2009.

Bank of Am., N.A. v. Limato, No. A-4880-10T3, 2012 WL 2505725, at *3 (N.J. Super. Ct. App. Div. July 2, 2012)

Judge Doyne concluded plaintiff did not have standing to initiate the action. Examining the certifications of Campbell, Williams, and Wilson, which alleged plaintiff was in actual possession of the promissory note, thejudge found the documents amounted to nothing more than a “naked assertion” as there was “no information ... provided as to the basis of this assertion.” Walters was an incompetent witness “as she lacked personal knowledge of the assertions set forth in her certification[ .]” Further, although Williams and Campbell may be competent witnesses, their certifications contain “no competent admissible proofs of execution of the note, execution and recordation of the mortgage, and nonpayment” and were rife with hearsay. 

Bank of Am., N.A. v. Limato, No. A-4880-10T3, 2012 WL 2505725, at *3 (N.J. Super. Ct. App. Div. July 2, 2012)

The facts in this record support the judge's findings that despite an assertion plaintiff held the original promissory note and was the assignee of the mortgage when the foreclosure action was filed, no evidence explains how plaintiff acquired ownership from AMOP.Even assuming Wells Fargo was plaintiff's servicing agent and somehow the 2004 servicing agreement governed a service relationship in 2009, no fact speaks to the basis of the Wells Fargo employees' claimed personal knowledge regarding plaintiff's entitlement to enforce the instrument as a holder under N.J.S.A.12A:1–201,3 or a “nonholder in possession of the instrument who has the rights of a holder[.]” N.J.S.A. 12A:3–301. Certifications from Wells Fargo employees can attest only to facts occurring during the servicing relationship, but not to plaintiff's ownership status.4 Neither Campbell nor Williams held personal knowledge that plaintiff could file a foreclosure action as the assignee of the mortgage or holder of the negotiable promissory note because their assertions or facts were based on assumptions or inferences gleaned from the servicing file, which represents inadmissible hearsay. N.J.R.E. 802.5

*5 Finally,the bald assertion that Wells Fargo had possession of the original note is fundamentally different from proof of plaintiff's status as holder of the negotiable promissory note. Judge Doyne correctly found the record contained no authentication of the requisite documents by an individual having personal knowledge of the requisite facts. SeeFord, supra, 418 N.J.Super. at 599–600 (holding a mortgagee's request for summary judgment to establish itself as a holder of a negotiable instrument must be based on properly authenticated documents, which must be based on personal knowledge).

Lastly, plaintiff's reliance on the broad terms of the servicing agreement fails for the reasons identified in Judge Doyne's opinion. The servicing agreement predated the assignment of the promissory note and contained no listing of loans and instruments covered by its terms.

Bank of Am., N.A. v. Limato, No. A-4880-10T3, 2012 WL 2505725, at *4-5 (N.J. Super. Ct. App. Div. July 2, 2012)

Evidence and Fair Foreclosure Act: Notice of Intent to Foreclose

During a bench trial, plaintiff Bank of America, National Association (BOA) was unable to have its sole witness authenticate a Notice of Intent to Foreclose (NOI), and therefore unable to have the document admitted into evidence. The court determined that BOA's failure to establish that it mailed a proper NOI was in turn a failure to establish that it had complied with the Fair Foreclosure Act (FFA), N.J.S.A. 2A:50–53 to –68. For that reason, the court dismissed the complaint without prejudice. Defendants Meir Weinraub and Amy Weinraub filed this appeal. Overlooking controlling precedent, defendants argue that the court should have dismissed the complaint with prejudice. We find their claim devoid of merit and therefore affirm.

Bank of Am., Nat. Ass'n v. Weinraub, No. A-5044-11T1, 2014 WL 3396081, at *1 (N.J. Super. Ct. App. Div. July 14, 2014)

Personal Service Issues

In this residential foreclosure action, defendants Rafael L. Martinez and Ritza Y. Martinez appeal the denial of their motion to vacate a sheriff's sale and extend their right of redemption. They contend, among other things, that they were never served with process. Because the motion judge who denied their motion never addressed that issue, and because defendantspresented sufficient evidence in support of their motion to raise a doubt as to the validity of the affidavits of service, we reverse the order denying defendants' motion and remand for a hearing.

First Horizon Home Loans v. Martinez, No. A-1646-12T3, 2014 WL 4472704, at *1 (N.J. Super. Ct. App. Div. Sept. 12, 2014)

We conclude by emphasizing the narrow scope and self-evident nature of our holding. Where, as here, defendants have adduced competent evidence, other than uncorroborated denials, that the information in an affidavit of service concerning how service was made is wrong, the plaintiff is no longer entitled to the presumption that the facts are true. Absent some countervailing consideration explained by the trial court as required by Rule 1:7–4, and supported by competent evidence in the record or decided as a matter of law, defendants in those circumstances are entitled to a hearing. 

First Horizon Home Loans v. Martinez, No. A-1646-12T3, 2014 WL 4472704, at *5 (N.J. Super. Ct. App. Div. Sept. 12, 2014)


Deutsche Bank must prove it had possession of the note when it filed the complaint to obtain standing.

Deutsche Bank Nat. Trust Co. v. Mitchell, 422 N.J. Super. 214, 224, 27 A.3d 1229, 1236 (App. Div. 2011)

Deutsche Bank could have established standing as an assignee, N.J.S.A. 46:9–9, if it had presented an authenticated assignment indicating that it was assigned the note before it filed the original complaint. The only evidence presented by Deutsche Bank was to the contrary. We reverse the grant of summary judgment and remand for a hearing to determine whether or not, 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

Deutsche Bank Nat. Trust Co. v. Mitchell, 422 N.J. Super. 214, 225, 27 A.3d 1229, 1236 (App. Div. 2011)

In Ford, supra, we explained that “[a] certification will support the grant of summary judgment only if the material facts alleged therein are based, as required by Rule 1:6–6, on personal knowledge.” 418 N.J.Super. at 599, 15 A.3d 327. We held that the trial court should not have considered an assignment that was not “authenticated by an affidavit or certification based on personal knowledge.” Id. at 600, 15 A.3d 327.

**1237 In support of its motion for summary judgment, Deutsche Bank provideda certification of an attorney dated January 22, 2009, which stated that “[p]laintiff is the present holder of the Note and Mortgage. A copy of the Assignment of Mortgage is attached as Exhibit B.” The attorney certified that his knowledge was based upon his “custody and review of the computerized records of *226 plaintiff which were made in the ordinary course of business as part of plaintiff's regular practice to create and maintain said records and which were recorded contemporaneously with the transactions reflected therein.” This attorney certification does not meet the requirement of personal knowledge we articulated in Ford. Attorneys in particular should not certify to “facts within the primary knowledge of their clients.”7 SeePressler & Verniero, Current N.J. Court Rules,comment on R. 1:6–6 (2011); Higgins v. Thurber, 413 N.J.Super. 1, 21 n. 19, 992 A.2d 50 (App.Div.2010), aff'd, 205 N.J. 227, 14 A.3d 745 (2011).

Deutsche Bank Nat. Trust Co. v. Mitchell, 422 N.J. Super. 214, 225-26, 27 A.3d 1229, 1236-37 (App. Div. 2011)

However, this certification does not make any mention of the assignment of the mortgage or how the signor knows that Deutsche Bank became the holder of the note.

At oral argument in the trial court, plaintiff's counsel indicated that plaintiff had possession of the note prior to obtaining the assignment. Deutsche Bank did not present any certification based on personal knowledge stating that it ever possessed the original note.

Deutsche Bank Nat. Trust Co. v. Mitchell, 422 N.J. Super. 214, 226, 27 A.3d 1229, 1237 (App. Div. 2011)

By assignment of mortgage from Washington Mutual Bank, successor in interest to Long Beach Mortgage Company to Deutsche Bank National Trust Company, as Trustee for Long Beach Mortgage Loan Trust 2006–3, plaintiff, herein, dated 05/14/2008. Said assignment is unrecorded at this time. 

Deutsche Bank Nat. Trust Co. v. Mitchell, 422 N.J. Super. 214, 219, 27 A.3d 1229, 1233 (App. Div. 2011)

Those documents were admitted into evidence at trial, based on Mitchell's testimony. While plaintiff was never able to present the Mortgage Loan Schedule that should have been attached to the Mortgage Loan Purchase Agreement, it was able to present a separate schedule maintained by the Bank, which did refer to defendant's loan. From all the proofs presented, the court was satisfied that defendant's loan was among the loans which were securitized in 2004. The securitization documents did provide that the Custodian was to review the files for each mortgage loan, to confirm that each **459 file contained the documents required, including the original note for each loan. From those circumstances, plaintiff argued the court could infer that the review occurred sometime in or around 2004 or 2005, that the file for defendant's loan was included in that review, and that the Custodian must then have located the original note in the file, appropriately endorsed. That inference is not illogical. It was considered. 

Bank of New York v. Raftogianis, 418 N.J. Super. 323, 362, 13 A.3d 435, 458-59 (Ch. Div. 2010)

Defendant offered other arguments, suggesting the proofs presented by plaintiff were suspect, and that other contradictory inferences would be appropriate. Given all the circumstances presented, it was entirely appropriate to question the reliability of the materials submitted by plaintiff. The provisions of plaintiff's original complaint referring to the plaintiff as having become the *363 owner of the note and mortgage “before the complaint was filed” did not comply with the provision of Rule 4:64–1(b)(10) and was arguably evasive. The MERS assignment was potentially misleading. Plaintiff was never able to explain, in any meaningful way, why it was unable to locate the Mortgage Loan Schedule that should have been attached to the Mortgage Loan Purchase Agreement, or why it had taken so long to respond the court's prior requests for the production of documents. Plaintiff was clearly on notice that the court intended to address the question of whether it had possession of the note as of the date the complaint was filed at trial, but was unable to produce any meaningful proof on the issue.Plaintiff failed to present a witness from the Custodian, or even an appropriate business record that might have been maintained by the Custodian to confirm just what had occurred when the mortgage loan files were to be reviewed. There was also no explanation of justhow plaintiff's counsel had come into possession of the original note. In the absence of such proofs, defendant argued, the court could infer that the review contemplated by the securitization process had not occurred, or that plaintiff was simply unable to establish that it had. Those potential inferences were also logical, and were considered. 

Bank of New York v. Raftogianis, 418 N.J. Super. 323, 362-63, 13 A.3d 435, 459 (Ch. Div. 2010)

As a general rule, one who takes an instrument does so subject to the claims and defenses that the maker may have against the originator. N.J.S.A. 12A:3–305. The holder in due course doctrine is an exception to this general rule, protecting from liability an innocent bona fide purchaser of an instrument. Carnegie Bank v. Shalleck, 256 N.J.Super. 23, 33 (App.Div.1992). A holder in due course is one who takes the instrument in good faith and for value. N.J.S.A. 12A:3–306; Unico v. Owen, 50N.J. 101, 109 (1967) (pertaining to mass marketing of consumer goods). The doctrine is meant to remove anxieties of one who takes the paper as an innocent purchaser. Unico, supra, 50 N.J. at 109.However, holder in due course status is “neither necessary nor desirable when the transferee knew a great deal about, or controlled, or participated in, the underlying transaction.” Mercedes–Benz Corp. v. Lotito,306 N.J.Super. 25, 31 (App.Div.1997), certif. denied, 165 N.J. 137 (2000).

Bank of New York v. Ukpe, No. A-2209-11T1, 2014 WL 4082953, at *3 (N.J. Super. Ct. App. Div. Aug. 20, 2014)

Evidentiary Issues

The judge determined that the notices of intention Wells Fargo served prior to filing the foreclosure complaint did not comply with N.J.S.A. 2A:50–56(c)(11), a provision of the Fair Foreclosure Act (FFA), N.J.S.A. 2A:50–53 to –68. In conformity with this court's decision in Bank of New York v. Laks, 422 N.J.Super.201 (App.Div.2011), the judge determined that a dismissal without prejudice was required.

Wells Fargo Bank, N.A. v. Dominguez, No. A-0539-11T3, 2013 WL 1390752, at *1 (N.J. Super. Ct. App. Div. Apr. 8, 2013)

“A certification will support the grant of summary judgment only if the material facts alleged therein are based, as required by Rule1:6–6, on ‘personal knowledge.’ “ Id. at 599 (citing Claypotch v. Heller, Inc., 360 N.J.Super.472, 489 (App.Div .2003)). The closest Campbell's certification comes to alleging personal knowledge of the date on which Wells Fargo obtained physical possession of the original note and retained it until it was sent to Wells Fargo's attorneys is his allegation that he personally reviewed records maintained in the regular course of Wells Fargo's business. But knowledge gleaned from review of records is not “personal knowledge.” It is knowledge based on hearsay statements included in records, which may or may not be admissible.See N.J.R.E. 803(c)(6) (setting forth the conditions for admission of hearsay included in business records).

Rule 1:6–6 permits an affiant to assert facts “which are admissible in evidence to which the affiant is competent to testify.” It also permits an affiant to annex “certified copies of all papers or parts thereof” referenced in the affidavit. R. 1:6–6. Here, there were no copies of papers, let alone certified copies, supporting Campbell's bald assertion that Wells Fargo had possession of the note on and after March 14, 2008.


Wells Fargo Bank, N.A. v. Dominguez, No. A-0539-11T3, 2013 WL 1390752, at *5 (N.J. Super. Ct. App. Div. Apr. 8, 2013)

Predatory Lending and Consumer Fraud

Countrywide had no involvement in the initiation, underwriting or funding of plaintiff's loan and could not have made any misrepresentations sufficient to support a claim of fraud. None of the elements for common law fraud or the CFA were established below and the dismissal of these claims was proper.

Edwards v. Countrywide Home Loans, No. A-1571-10T4, 2012 WL 6720205, at *2 (N.J. Super. Ct. App. Div. Dec. 28, 2012)

The five elements of common-law fraud are: (1) a material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages. Jewish Ctr. of Sussex County v. Whale, 86 N.J. 619, 624–25 (1981).

To state a claim under the Consumer Fraud Act (CFA), N.J.S.A. 56:8–1 to–20, three elements are required: (1) unlawful conduct by defendant; (2) an ascertainable loss by plaintiff; and (3) a causal relationship between the unlawful conduct and the ascertainable loss. Int'l Union of Operating Eng'rs Local No. 68 Welfare Fund v. Merck & Co., Inc., 192 N.J.372, 389 (2007).

Edwards v. Countrywide Home Loans, No. A-1571-10T4, 2012 WL 6720205, at *2 (N.J. Super. Ct. App. Div. Dec. 28, 2012)

Trial Period Payments, Modification Issues and NJ Consumer Fraud

Before reviewing the record and setting forth our own legal analysis, we briefly discuss the most pertinent case law on which the parties rely. In Wigod v. Wells Fargo Bank, N.A., 673F.3d 547 (7th Cir.2012), the court cogently explained the federal HAMP program, which was designed to address the residential mortgage foreclosure crisis by encouraging lenders to extend loan modifications to qualified mortgagors. Id. at 556–57; seeEmergency Economic Stabilization Act of 2008, 12 U.S.C.A. § 5219(a)(1). The court concluded that, even though there is no private cause of action under HAMP, a mortgagor may nonetheless assert a common-law contract claim based on a bank's failure to honor promises made in a HAMP Trial Period Plan Agreement.3 The court reasoned that the terms of the TPP Agreement must be construed as a promise by the bank that if the debtor complies with its terms, she will be offered a loan modification. The court thus described the TPP Agreement as including “a unilateral offer to modify Wigod's loan conditioned on her compliance with the stated terms of the bargain.” Wigod, supra, 673 F.3d at 562. The court reasoned that “a reasonable person in Wigod's position would read the TPP as a definite offer to provide a permanent modification that she could accept so long as she satisfied the conditions.” Ibid.; see also Corvello v. Wells Fargo Bank, N.A., 728 F.3d 878, 883–85 (9th Cir.2013); Young, supra, 717F.3d at 234; Bosque v. Wells Fargo Bank, N.A.,762 F.Supp.2d 342 (D.Mass.2011); West v. JPMorgan Chase Bank, N.A., 214 Cal.App.4th 780, 154 Cal.Rptr.3d 285 (Ct.App.), rev. denied, 2013 Cal. LEXIS 5801 (July 10, 2013).

*2 The court rejected the bank's argument that there was no consideration for a promise to grant a loan modification because the debtor was merely making a partial payment of a debt she already owed. Wigod, supra, 673 F.2d at 564. The court pointed out that in entering into the TPP Agreement, the debtor agreed to provide additional financial information and agreed to attend debt counseling if asked to do so. Ibid.4; see Seaview Orthopaedics v. Nat'l Healthcare Res., Inc., 366 N.J.Super. 501, 508–09, 841 A.2d 917 (App.Div.2004) (discussing adequacy of consideration). The court also rejected the bank's argument that the TPP Agreement left to the bank's sole and unbridled discretion whether to actually send the debtor a loan modification agreement once she complied with her obligations under the TPP Agreement. The court found that such an interpretation would render the TPP Agreement illusory. Wigod, supra, 673 F.3d at 563.


Arias v. Elite Mortgage Grp., Inc., No. A-4599-12T1, 2014 WL 7665197, at *1-2 (N.J. Super. Ct. App. Div. Jan. 23, 2015)

Following our review of the legal issue presented, we, like the panel in Arias, conclude HAMP's preclusion of private causes of action would not prevent a borrower from pursuing state law claims arising from the breach of an underlying temporary contractual arrangement pending the lender's review under the HAMP guidelines.

Miller v. Bank of Am. Home Loan Servicing, L.P., No. A-0169-13T2, 2014 WL 8028849, at *1 (N.J. Super. Ct. App. Div. Mar. 5, 2015)

More recent reported opinions from federal courts of appeals have held there is no preemption from filing common law claims related to a contractual agreement arising under a HAMP transaction. In Wigod, the Seventh Circuit concluded “HAMP and its enabling statute do not contain a federal right of action, but neither do they preempt otherwise viable state-law claims.” Wigod, supra, 673 F.3d at 555, 576. Also, in Young,the First Circuit noted “ ‘[t]he standard-form TPP represents to borrowers that they will obtain a permanent modification at the end of the trial period if they comply with the terms of the agreement.’ “ Young, supra, 717 F.3d at 229 (quoting Markle v. HSBC Mortg. Corp. (USA), 844 F.Supp.2d 172, 177 (D.Mass.2011)). The court of appeals accepted the premise that a reasonable person would read the TPP as an offer to provide a permanent modification if all conditions were met. Young, supra, 717 F.3d at 234 (citingWigod, supra, 673 F.3d 562). 

Miller v. Bank of Am. Home Loan Servicing, L.P., No. A-0169-13T2, 2014 WL 8028849, at *4 (N.J. Super. Ct. App. Div. Mar. 5, 2015)

We agree with our Appellate Division colleagues and adopt the methodology outlined in Arias.We accept the holding and conclude HAMP's preclusion of a private right of action does not preempt pursuit of valid state law claims arising between the parties to a TPP. Although a borrower may not sue when a lender denies a loan modification because the borrower failed to meet HAMP's guidelines, which include the lender's evaluation of the borrower's financial stability, id. at –––– (slip op. at 9) (citingWigod, supra, 673 F.3d at 562; Young, supra,717 F.3d at 234), we hold borrowers should not be denied the opportunity to assert claims alleging a lender failed to comply with its stated obligations under the TPP. Consequently, when the issuance of a loan modification agreement is explicitly made contingent upon the evaluation and satisfaction of all prescribed conditions precedent within a TPP, including the evaluation and timely satisfaction of all financial disclosures and obligations, the declination of a lender to present a loan modification agreement may be actionable. See id. at –––– (slip op. at 4). In this regard, the specific terms of the TPP govern the parties' agreement.7

Miller v. Bank of Am. Home Loan Servicing, L.P., No. A-0169-13T2, 2014 WL 8028849, at *5 (N.J. Super. Ct. App. Div. Mar. 5, 2015)

We agree with Judge Stephan C. Hansbury that defendant mortgagor presented legally competent evidence that by letter dated March 30, 2010, plaintiff mortgagee approved her application for a loan modification, and that she accepted plaintiff's offer by continuing to make payments under the loan modification offered to her. We also agree with the trial judge that plaintiff failed to present legally competent evidence to support its claim that the March 30, 2010 letter granting the loan modification was sent in error.

BAC Home Loan Servicing, L.P. v. Ficco, No. A-4756-10T4, 2012 WL 2345398, at *1 (N.J. Super. Ct. App. Div. June 21, 2012)

Further, even if the March 30 letter were sent in error, we would be inclined to find that plaintiff was equitably estopped from denying defendant the benefit of the bargain, because she reasonably relied to her detriment on that letter in making continued payments. Knorr v. Smeal, 178 N.J. 169, 178 (2003). 

BAC Home Loan Servicing, L.P. v. Ficco, No. A-4756-10T4, 2012 WL 2345398, at *2 (N.J. Super. Ct. App. Div. June 21, 2012)

Unlike the unpublished federal court decision plaintiff has cited to us, defendant's claim is not based merely on her having made payments under a trial period plan, but on plaintiff having unequivocally notified her that she qualified for the loan modification, and having induced her to make continued payments based on that promise. We emphasize that the obligation we find here, to provide defendant with a loan modification, lies with plaintiff. If plaintiff wishes to avoid alleged problems with the federal loan modification program, as represented to us at oral argument (albeit with no supporting legally competent evidence), our decision does not preclude plaintiff from offering to directly refinance defendant's mortgage through an “in house” loan.

*3Finally, we observe that inducing debtors to continue making mortgage payments over an extended period of time, on the promise of a loan modification, only to eventually pull the rug out from under them when they are unable to satisfy criteria beyond prompt continuing payment of the mortgage, borders on unconscionability.1


BAC Home Loan Servicing, L.P. v. Ficco, No. A-4756-10T4, 2012 WL 2345398, at *2-3 (N.J. Super. Ct. App. Div. June 21, 2012)

We confess some puzzlement at why a mortgage company would continue foreclosure proceedings against a debtor who, unlike many, is actually paying her mortgage. The “net present value” investment formula seems divorced from the current reality, which is that foreclosure is unlikely to yield a higher investment return than keeping in place a “paying” mortgage. We emphasize, however, that our decision of this appeal does not turn on any of those observations, but on the application of legal and equitable principles to the evidentiary record before us.

BAC Home Loan Servicing, L.P. v. Ficco, No. A-4756-10T4, 2012 WL 2345398, at *3 (N.J. Super. Ct. App. Div. June 21, 2012)

escalas case

chancery division procedure

krause, Judge Doyne

recent case regarding pro se Judge Doyne

Vacating Default

Rule 4:43–3 requires only a showing of good cause for setting aside the entry of defaultN.J. Mfrs. Ins. Co. v. Prestige Health Grp., LLC, 406 N.J.Super. 354, 360 (App.Div.),certif. denied, 199 N.J. 543 (2009). Although the trial court was undoubtedly correct that courts have traditionally considered the presence of a meritorious defense in assessing good cause, see James W. Moore, et al., 10Moore's Federal Practice–Civil § 55.70[2][a] (3d ed.2013) (reviewing Fed.R.Civ.P. 55(c)), our cases have long counseled that “the opening of default judgments should be viewed with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached.” Marder v. Realty Constr. Co., 84N.J.Super. 313, 319 (App.Div.), aff'd, 43 N.J.508 (1964). We upheld the setting aside of a default judgment in Marder although defendant, while alleging a meritorious defense, never said what it wasId. at 318–19. As the Supreme court recently reiterated, in the context of a foreclosure case, the standard for setting aside the entry of a default is decidedly less stringent than that of setting aside a default judgment. US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012) (citing Pressler & Verniero, Current N.J. Court Rules,comment on R. 4:43–3 (2012)). 

Kondaur Capital Corp. v. Thomas, No. A-2775-13T4, 2014 WL 7391454, at *1 (N.J. Super. Ct. App. Div. Dec. 31, 2014)

Vacating a Final Judgement (Default Judgement) many months after Sheriff's sale

For various reasons, the sheriff's sale was adjourned a total of seventeen times. Finally, on July 5, 2011, defendants filed their first pleading in the foreclosure action, an order to show cause seeking to stay the sheriff's sale and seeking to vacate the 2009 final judgment of foreclosure pursuant to Rule 4:50–1(d) and (f).3

Deutsche Bank Nat. Trust Co. v. Russo, 429 N.J. Super. 91, 96, 57 A.3d 18, 21 (App. Div. 2012)

But nowhere in her certification is there any statement that plaintiff told defendants that they did not need to file an answer to the complaint or that the foreclosure would be held in abeyance. 

Deutsche Bank Nat. Trust Co. v. Russo, 429 N.J. Super. 91, 99, 57 A.3d 18, 23 (App. Div. 2012)

Further, as we recently held in Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J.Super.315, 53 A.3d 673 (App.Div.2012), “[m]otions made under any Rule 4:50–1 subsection ‘must be filed within a reasonable time.’ ” Id. at 319, 53 A.3d 673 (quoting Orner v. Liu, 419N.J.Super. 431, 437, 17 A.3d 266 (App.Div.),certif. denied, 208 N.J. 369, 29 A.3d 741 (2011)). We also noted that, pursuant to Rule4:50–2, “motions based on Rule 4:50–1(a), (b) and (c)” must be filed within a year of the judgment. Ibid. Therefore, a Rule 4:50 motion based on excusable neglect is barred if it is filed more than one year after the foreclosure judgment was entered. Ibid. Additionally, as we held in Deutsche Bank, equitable considerations may justify a court in rejecting a *100 foreclosure defendant's belated attempt to raise as a defense the plaintiff's lack of standing: 

Deutsche Bank Nat. Trust Co. v. Russo, 429 N.J. Super. 91, 99-100, 57 A.3d 18, 23 (App. Div. 2012)

Therefore, in this post-judgment context, lack of standing would not constitute a meritorious defense to the foreclosure complaint.

101112 In reaching that conclusion, we note that, contrary to defendants' contention, standing is not a jurisdictional issue in our State court system and, therefore, a foreclosure judgment obtained by a party that lacked standing is not “void” within **25 the meaning of Rule 4:50–1(d). In the federal courts, standing is a jurisdictional concept, because Article III of the United States Constitution limits the jurisdiction of the federal courts to cases and controversies. SeeRaftogianis, supra, 418 N.J.Super. at 353, 13A.3d 435 (citing In re Foreclosure Cases, 521F.Supp.2d 650, 653–54 (S.D.Ohio 2007)).

1314 By contrast, the Superior Court of New Jersey is a court of general jurisdiction, Swede v. Clifton, 22 N.J. 303, 314, 125 A.2d 865 (1956), and in our courts, the requirement that a party have standing is a matter of judicial policy not constitutional command. See DeVesa v. Dorsey, 134 N.J. 420, 428, 634 A.2d 493 (1993) (“Unlike the Federal Constitution, the New Jersey Constitution does not confine the exercise of the judicial power to actual cases and controversies. See U.S. Const. art. III, § 2, cl. 1; N.J. Const. art. VI, § 1, para. 1.”) (Pollock, J., concurring); Salorio v. *102 Glaser, 82 N.J. 482, 490–91, 414 A.2d 943,cert. denied, 449 U.S. 804, 101 S.Ct. 49, 66L.Ed.2d 7 (1980). “Because standing affects whether a matter is appropriate for judicial review rather than whether the court has the power to review the matter, and standing is a judicially constructed and self-imposed limitation, it is an element of justiciability rather than an element of jurisdiction.” N.J. Citizen Action v. Riviera Motel Corp., 296N.J.Super. 402, 411, 686 A.2d 1265 (App.Div.1997), appeal dismissed, 152 N.J.361, 704 A.2d 1297 (1998); see also Gilbert v. Gladden, 87 N.J. 275, 280–81, 432 A.2d 1351 (1981) (distinguishing the concept of justiciability from that of subject matter jurisdiction).4

Finally, based on our review of the record, we find no evidence that defendants have any other meritorious defense. They claim that they were defrauded into taking an interest-only loan that would eventually result in higher mortgage payments.But they produced no proof that the alleged fraud caused them to default on the mortgage. See Jewish Center of Sussex County v. Whale, 86 N.J. 619, 624, 432 A.2d 521 (1981) (fraud requires proof that the victim relied “to his detriment” on a material misrepresentation). They stopped making payments in the first year of the mortgage, long before the monthly payments were scheduled to increase.5

Deutsche Bank Nat. Trust Co. v. Russo, 429 N.J. Super. 91, 101-02, 57 A.3d 18, 24-25 (App. Div. 2012)

Mediation apparently failed, as Deutsche purchased the property at a sheriff's sale on August 20, 2010. Angeles did not object to the sale at that time. See R. 4:65–5 (requiring any objection to be made within ten days after the sheriff's sale or any time prior to the delivery of the deed). The deed was delivered by the sheriff to Deutsche and recorded on September 16, 2010.

Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315, 317, 53 A.3d 673, 675 (App. Div. 2012)

Rather, when all hope of further delay expired, after his home was sold and he was evicted, he made a last-ditch effort to relitigate the case. 

Deutsche Bank Trust Co. Americas v. Angeles, 428 N.J. Super. 315, 320, 53 A.3d 673, 676 (App. Div. 2012)


Glenn Mitchell, vice-president of BNY, certified that defendants' mortgage note has been in BNY's possession since the fall of 2005. According to Mitchell, under the PSA, BNY was required to deliver three certifications as to each loan it purchased: (1) an initial certification attesting to BNY's receipt of the required collateral documents; (2) an interim certification of the original note endorsed in blank thirty days after the PSA closed; and (3) a final certification as to the receipt of all collateral documents, six months after the loan closed. All three certifications were made for defendants' loan, indicating that BNY was in possession of all the collateral documents for defendants' loan within six months after the closing of the loan. 

Bank of New York v. Ukpe, No. A-2209-11T1, 2014 WL 4082953, at *2 (N.J. Super. Ct. App. Div. Aug. 20, 2014)

The PSA required the endorsement and transfer of the various mortgage notes at issue and the endorsement and transfer process was the subject of specific review.

Bank of New York v. Ukpe, No. A-2209-11T1, 2014 WL 4082953, at *2 (N.J. Super. Ct. App. Div. Aug. 20, 2014)

Frequently Asked Questions

The information in this site is not intended as legal advice, and is not intended to take the place of hiring an attorney to represent you.

If I apply for a loan modification, will that stop foreclosure proceedings?

No. The New Jersey Supreme Court in US Bank v. Guillaume made it clear that not answering a foreclosure complaint is like "sticking your head in the sand." If you believe you have defenses to foreclosure, you should raise these defenses within 35 days of the filing of a foreclosure complaint, or within 35 days of being notified of being sued by a foreclosure complaint.

What are some defenses and affirmative claims in a foreclosure case?

Defenses, which may sometimes also work as an affirmative claim, include abusive lending practices such as (1) charging excessive interest and fees, (2) refinancing homes with little financial benefit to the borrower, (3) hiding certain fees or interest, and (4) neglecting to inform the borrower of the loan's terms and conditions.

Sometimes, if the lender's conduct is "unconscionable" or if the lender has committed an unfair business practice, you can file a claim against the lender for a violation of the New Jersey Consumer Fraud Act. Examples of these instances would be the wrongful denial of a loan modification or if the loan made to you is "predatory." Every case is different and requires a review of the loan documents and an interview with a prospective client.

What is a "predatory" loan?

It basically means that the bank has given you a loan that you cannot afford. While predatory lending is a general concept not subject to precise definition, the New Jersey courts have defined it as "a mismatch between the needs and capacity of the borrower" where "the terms of the loan are so disadvantageous to that particular borrower that there is little likelihood that the borrower has the capability to repay the loan."

What is the Notice of Intent to foreclose?

The New Jersey "Fair Foreclosure Act" requires the lender to send the homeowner a

Notice of Intention to Foreclose before the lender can file a foreclosure complaint. The Notice of Intention to Foreclose advises the homeowner that he or she is behind with the mortgage

payments, and gives the homeowner at least 30 days to cure the default. This document must also give the homeowner some other important information that the borrower may need in order to resolve a dispute.

Once they receive this notice, homeowners have to seriously consider their options and plan ahead. With some strategy and advance planning, there are usually some viable options. The New Jersey courts have made it clear that a lender must identify the "actual lender." Often, the foreclosure bank or lender will only disclose the "servicer" of the mortgage, but not the "actual lender."

What is a lis pendens?

During the foreclosure process, the bank or lender must also file a legal form called a "lis pendens." A lis pendens is a recorded document that provides to the public notice that the property is being foreclosed upon. A homeowner cannot sell the home to avoid the foreclosure if a lis pendens if filed. This document, filed in the county court, is usually not sent to the homeowner.

Is the law settled in the area of foreclosure law in New Jersey?

There are only a few cases that have reached the New Jersey Supreme Court in the area of foreclosure. Many lower court cases involving foreclosure are "unpublished" and are not "binding" on other courts in New Jersey. This means that other courts are not required to following the reasoning and decision of an unpublished decision. Many new cases in foreclosure have been filed in New Jersey in recent years, which may result in a new decisions making significant changes in the law.

How much time will my case take?

It's impossible to determine how short or how long foreclosure cases will take. Sometimes we've achieved a quick resolution after submitting one modification application. We've also had cases that get stuck in the appellate process and can take much longer. The volume of cases in your county can also play a role in the timing. Appealing a decision from a trial court to the Appellate Division could easily take well over a year. Due to the stress involved with this type of case, waiting for a court decision that long may not be suited for everyone.

What is a "contesting" answer? What is an "uncontesting" answer?

The Office of Foreclosure in Trenton , a unit in the Administrative Office of the Courts, Trenton reviews a filed answer and determines whether it is contesting or not. A contesting answer is one that challenges the lender's right to foreclosure on the property. The Office of Foreclosure sends contesting answers to judges to the General Equity judge in the county where the property is located.

An answer is considered uncontesting when it does not dispute the validity of the mortgage, the priority of the mortgage or create an issue with respect to the lender's right to foreclose. An uncontesting answer also may recite that the party is without knowledge or information sufficient to form a belief as to the allegations and to leave the plaintiff to its proofs. Foreclosure actions with uncontesting answers remain with the Office of Foreclosure for administrative processing.

If an answer is found to be uncontesting, the case proceeds as such and the next step is waiting for a default judgment, which is generally followed by a final judgment and then a sheriff's sale. of the property. Therefore, if you want to contest a foreclosure, it is critically important to file an answer that is deemed to be contesting by the Office of Foreclosure.

What happens after a homeowner files a contesting answer?

The next step is conducting what is called "discovery." This means making requests of different kinds in order to obtain information helpful to your case. If you don't make discovery requests, you lose your right to discovery. If you are representing yourself pro se you are expected to understand and be knowledgeable of court rules and procedures. The court cannot give you legal advice. The timing of making of discovery demands is critical, because if you wait too long, you may lose the opportunity of conducting discovery and obtaining valuable information.

How important is discovery in foreclosure cases?

A homeowner's proofs and access to documents are often lacking and weak at the outset of a case. Effective use of the discovery process can help to transform a weak case into a strong case. The discovery process takes various forms, which can include following techniques: interrogatories (sending questions to the lender for answers); depositions (out-of-court testimony provided by parties and witnesses); requests for production of evidence (one party asks the other for physical evidence related to the dispute, such as promissory notes, mortgage documents, etc.); and requests for admissions (one party asks the other party to admit, under oath, that certain facts are true or certain documents are genuine).

Each type of discovery method has its own rules and procedures, and attention must be paid to form and timing when utilizing the various discovery techniques.

Why are depositions important?

Depositions provide the opportunity to cross examine witnesses and parties. This technique presents the best opportunity for obtaining detailed information and exploring the weaknesses and strengths of a lender's case. Depositions sometimes result in exposing shocking conduct which provides a homeowner with real opportunities against a lender. Examples include the depositions of Erica Johnson Seck and Angela Nolan, which helped to publicize the wrongful "robo signing" conduct utilized and condoned by large banks and lenders.

What should I expect if I'm deposed?

Your deposition may be the most important event that happens in your entire case. It may even be more important than your testimony at trial. As scary as that may sound, it is actually a very simple event. A deposition is nothing more than a question and answer session where the lender's attorney asks you questions to learn about your case. A court reporter records your testimony with a stenography machine, and then creates a written transcript to be used at trial.

As long as you tell the truth, there is very little to worry about.

When the question is clear to you, you should answer whatever is the truth to that question. If you don't know the answer, you should say, "I don't know", because that is the truth. If the question calls for something you once knew but have now forgotten, you should say, "I do not remember," because that is the truth. You should not be ashamed to say, "I don't know," or "I don't recall," or words to that effect, if that is the truth.

What is a summary judgment motion?

Most lenders file a motion for summary judgment, which is a way to more quickly end a case without a trial. A motion for summary judgment is a request that the judge "summarily" enter judgment now. It says there is no reason to go further as there is no way the other side (you) can win, since there are no "factual disputes" that a jury or judge must resolve and the law is so clear that the court has to rule in favor of the lender. Normally an affidavit will be attached to the motion which gives the court the facts to base its decision on. Sometimes depositions will be relied upon by the parties.

Unless you have some defense or counterclaim that would justify or excuse your non-payment, the lender will win the motion for summary judgment and the court will render a final judgment against you. However, if the judge denies the lender's motion for summary judgment, the foreclosure proceeds to trial. If you lose at trial, the court will enter a final judgment of foreclosure against you.

If I lose at summary judgment, do I have any other options?

One option is to file an appeal with the Appellate Division of the Superior Court. It's important to carefully review the trial court's decision, and determine whether there are issues worth appealing. Foreclosure law in New Jersey is evolving very quickly and many cases end up before the Appellate Division. Some wind up before the New Jersey Supreme Court.

Another option is to continue efforts to obtain a modification of your loan. Every month that goes by may provide a new opportunity for a loan modification program that be able to make your loan affordable and take it out of default status. Sometimes, even something as simple as a servicer change or management change may help in making a settlement more flexible.

What is securitization failure?

It is very common for banks to issue loans with the goal of selling them to Wall Street, a process called loan securitization or asset securitization. A securitized loan, by definition, is one that has been bundled with thousands of others and sold as a stock certificate. If your actual lender is identified as a trust, your loan has most likely been securitized.

Under these circumstances, it is likely that your lender, now threatening foreclosure on your home due to your inability or difficulty to pay your mortgage, might not be able to show complete chain of title of the mortgage loan note. A foreclosing plaintiff that fails to adequately trace the loan from the original lender to the plaintiff faces defenses to foreclosure, including that the Plaintiff lacks standing, failed to join indispensable parties, and failed to state a cause of action.

What this means for you is that you may be able to challenge your lender's ability to collect, which could put you in a strong position to negotiate a modified repayment of your mortgage.

The mechanics of loan securitization are complex, and this area of the law is undergoing change. In the Raftogianis decision in New Jersey, Judge Todd required certain securitization documents to be provided to the Court before he rendered a decision at summary judgment. One of the key documents in securitization is a pooling and servicing agreement (PSA), which has strict requirements. Sometimes PSA requirements are not satisfied and the contract might not permit that a certain loan be part of the pool of loans in a specific trust. This may be used as a defense, since the wrong party may be attempting to foreclose on your home or commercial property.

How about bankruptcy?

We always urge our clients to consult with a bankruptcy attorney.

What should I do if I've been offered a temporary trial offer?

If offered an affordable payment, you should seriously consider a temporary trial offer. Once all the trial payments have been paid, then a permanent offer typically comes through and the actual permanent terms are disclosed (the terms are not disclosed beforehand). The permanent terms may include a balloon payment at the end of the loan, a deferred payment, or a principal reduction feature. These are items that have to be carefully reviewed before accepting the lender's offer. If, after making the trial payments, a deal offered to you is unacceptable, you can then decide to not sign the permanent documents.

The offer made to me during litigation is unaffordable. Can I reject their offer?

Yes, you can. We just urge our clients to carefully weigh the pros and cons of an offer and not make a knee jerk reaction. What may initially appear as an unattractive offer may be the best option in the long run. Various factors need to be considered, including the strength of your case, the expense of litigation and trial, and the length of time that may be required in defending your foreclosure case.

In a decision issued (Aug. 2011) Deutsche Bank v. Mitchell et al , the Appellate Division vacated a sheriff's sale, final judgment and summary judgment for reasons related to the plaintiff's lack of standing to pursue the foreclosure complaint. Although no stay was sought by the homeowner pending the appeal, the appellate division rejected plaintiff's invitation to dismiss the appeal as moot because the issues are important and no third party rights were impacted. Relying heavily onWells Fargo v. Ford the court found that the plaintiff did not have standing to file the complaint because it did not have the assignment of mortgage at the time of the filing of the complaint and it did not demonstrate that it had possession of the note underlying the mortgage. The court engaged in a lengthy analysis of the UCC requirements for enforcement of notes and ultimately held that the Plaintiff "could not cure the defect in the initial complaint, filed one day before obtaining the assignment, by filing an amended complaint following the assignment." The court also held that the proofs presented by the plaintiff in support of summary judgment were inadequate in part because the assignment was not authenticated by an affidavit or certification based on personal knowledge.

The Appellate Division ruled in Bank of New York v. Laks that the failure either to identify or to properly identify the lender in the Notice of Intention to Foreclose requires the dismissal of the foreclosure complaint, not a new notice issued after the complaint. The Laks case arose on a Pro Se homeowner's Motion to Vacate Default (later default judgment) and to dismiss the complaint. The motion was denied by the trial court and reversed in this opinion. The Appellate Division engaged in a lengthy statutory construction analysis of the Fair Foreclosure Act and concluded that the New Jersey Legislature intended to require the lender to identify itself in the Notice of Intention to Foreclose prior to the commencement of foreclosure proceedings. The Appellate Division noted that it is confusing to homeowners to receive a foreclosure complaint from an entity that was not the originator and also not named in the Notice of Intention to Foreclose.

What is a Notice of Intention to Foreclose?

New Jersey law requires that a servicer send a borrower a Notice of Intention to Foreclose letter at least thirty days before filing a complaint against a borrower in connection with a foreclosure lawsuit involving a primary residence. Although a Notice of Intention to Foreclose correspondence might look like an unimportant and routine letter from your servicer, take this correspondence seriously and don't be deceived. A Notice of Intention to Foreclose is an important document of legal significance that essentially provides you with notice that the foreclosure process has begun or is about to begin. As required by the New Jersey Fair Foreclosure Act, N.J.S.A. 2A:50-56, your servicer (the mortgagee) or your servicer's attorney is required to send a Notice of Intent or Notice of Intention to Foreclose via registered or certified mail, return reciept requested. Whether you get a Notice of Intention to Foreclose from an attorney or directly from your servicer, it should be treated as the serious legal document that it is. A foreclosure defense attorney can help defend against the foreclosure action that your servicer intends to initiate against you or has already commenced.

What's a default judgment in a New Jersey foreclosure? 

In New Jersey, if you are in foreclosure and miss the deadline to file an Answer, or file a Non-Contesting Answer, your servicer has the right and will likely file papers with the court seeking the court to Enter Default Judgment against you. This is an important step in a foreclosure case, and should, if possible, be avoided as the entry of a default judgment can both compromise your legal rights and impair your ability to fight a New Jersey foreclosure case.

It is, however, possible to fight a previously entered Default Judgment, although this is typically an uphill battle. New Jersey Court Rule 4:43-3 provides a mechanism to fight a Default Judgment by giving you the right to file a motion to vacate the default and seek leave to file an Answer. In other words, this rule enables you to, if successful, effectively remove the default and it gives you the right to file an Answer to the lawsuit filed against you following the removal of the default. However, as previously mentioned, it is difficult to successfully vacate a default judgment as it is only possible if you both show good cause for not answering the complaint filed against you and if you can demonstrate that the answer you intend to file has meritorious defenses.

Court OKs Suits Over Denied Mortgage Modifications

Mary Pat Gallagher, New Jersey Law Journal

January 28, 2015

Homeowners who enter into trial agreements to modify their mortgages under the federal Home Affordable Modification Program (HAMP) and comply with the terms can sue for breach of contract if a modification is denied and might even have a consumer fraud claim, a New Jersey appeals court has held in a precedential decision of first impression.

“While there are no reported New Jersey cases addressing the contractual status of a [Trial Period Plan] Agreement, case law suggests that an agreement that purports to bind a debtor to make payments while leaving the mortgage company free to give her nothing in return might violate the New Jersey Consumer Fraud Act,” Judge Susan Reisner, joined by Ellen Koblitz and Michael Haas, said in the Jan. 23 ruling inArias v. Elite Mortgage Group Inc.

Loan Modification:What is a loan Modification?

Most lenders / banks will review at least one time a borrower's loan modification application. There are many free options out there for borrowers in New Jersey and I urge every prospective client to seek out those free alternatives first. One great free alternative is legal services of New Jersey. When an application is denied, many times that denial is based on incorrect or inaccurate information. It is important to ask the lender for a specific reason for the denial. Pursuant to regulation x of RESPA, a borrower is entitled to ask for that information and receive an answer within a limited amount of time. If we are assisting a client with a loan modification we typically send out, on their behalf a post submission request for infomation, asking for but not limited to a confirmation that the application be deemed complete and if not complete a written statement detailing what specifically is missing. If no response is provided sending out a notice of error is typcially appropriate.

Some frequent complaint I've heard from clients, include the following:

I was lulled into a false sense of security and did not answer my foreclosure complaint believing that a loan modification would stop the foreclosure action. The lender told me to first fall behind a few months in order to qualify for a loan modification. I submitted specific documents over and over again to the lender while being told they were not receiving the documents. I participated in a trial payment modification and sent in timely payments however I was still rejected for a permanent modification for reasons that are unclear to me. My lender is stating a foreclosure sale has not been scheduled, i'm scared that it means one can be scheduled at any moment.

Guidelines: its important to ask and review a specific investor's / creditor's / servicer's / bank's loan modificiation guidelines. Every guideline is potentially different and knowing what is potentially available to you is important before you go through the process. Requesting this information can be done pursuant to a request for information (RESPA). See more at

Recent Case Updates

Emingrant Mortgage Company vs. Karen Costa, NJ Appellate Division, decided September 18th, 2017 Judges Nugent, Carrier and Gieger. IssueL Whether a Emigrant is liable for the acts of a potential agent. Summary Judgment. NJ Consumer Fraud. Agency Issues. HOSA or the NJ Home Ownership Security Act of 2002 borrowing money for home improvements and asserting defenses against various parties. Partial reversal.

The Bank of New York Mellon vs. Jeffrey Davis, NJ Appellate Division, unpublished, decided October 16, 2017, Judges Hoffman and Mayer, Burlington County: DiTech, Rule 1:6-6 personal knowledge of an affiant of a summary judgment certification signed on behalf of a lender/servicer. Failure to establish as a matter of law that the bank acquired control of the note. Plaintiff failed to produce a power of attorney document evidencing its legal relationship with DiTech. Failure to detail note's physical location or state details regarding delivery. No Source of knowledge. Decision One's deisnation of MERS as its nomimee remained in effect after it ceased operations. On Remand, the trial court should address the question of whether MERS remained the nominee of Decision One.

Bankruptcy. If you are in foreclosure and file a bankruptcy, all actions and proceedings against you are stayed. This means the foreclosure is "stopped", including sheriff's sales. Joseph A. Chang & Associates are experienced bankruptcy attorneys who will consult with you to determine whether bankruptcy is advisable for you.

Mr. Chang has extensive experience serving as a court-appointed mediator. If you need experienced and professional legal representation contact Joseph A. Chang & Associates, L.L.C. today at (973) 925-2525 to schedule a consultation. Or email us at