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Greenpoint Mortgage Funding, Inc. v. Odoemene

A-4438-08T2 (N.J. Super. App. Div. 2010) (Unpublished)

MORTGAGES; FORECLOSURE — Where borrowers, on the loan closing date, issue a mortgage to the Mortgage Electronic Registration Systems (MERS), as nominee for the lender, and the MERS assigns the mortgage to the lender before entry of judgment, the lender has standing to foreclose on the mortgage.

To secure a note, borrowers executed and delivered a mortgage. At the closing, the lender assigned the note. The mortgage was issued to Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for the lender. When the borrowers defaulted, the lender sought to foreclose, as required by statute. It first mailed a notice of intent to foreclose advising the borrowers of their right to cure. Then, after more than sixty days had passed, it filed a foreclosure complaint. The lender’s summary judgment motion went unopposed by the borrower. After the action commenced, MERS assigned the mortgage to the lender.

The lower court entered a foreclosure order. The borrowers filed a motion seeking to vacate the order asserting that they relied on a third party to assist them in the foreclosure action. Since the third party did not respond to the lender’s summary judgment motion, it argued that such failure should be considered “excusable neglect.” The Court rejected this contention as being a valid excuse for reconsideration. The borrower also claimed that because MERS assigned the mortgage after the date the foreclosure action commenced, the lender did not have standing to initiate the action. After the lender gave the Court proof that it was the lender and that the mortgage had been issued to MERS at the closing as its nominee, the Court rejected that assertion as well. It also rejected the borrowers’ claim that the lender did not provide adequate notice of the opportunity to cure the default as required by the applicable statute. The borrowers appealed.

On appeal, the Appellate Division affirmed, holding that the borrowers failed to establish a basis for setting aside the order. First, it stated that even if it were assumed that the borrowers reasonably relied upon a third party to see that a response was filed to the lender’s summary judgment motion, the borrowers failed to establish that they had “a meritorious defense worthy of a judicial determination.” Second, it agreed with the lower court that the borrowers had adequate notice of their opportunity to cure the default since they were given more than thirty days notice of the lender’s intention to bring a foreclosure action before the action was commenced, all in accordance with statutory requirements. Finally, the Court rejected the lack of standing argument, holding that on the loan closing date the borrowers issued the mortgage to MERS, as nominee for the actual lender. Further, MERS formally assigned the mortgage before the entry of final judgment.

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