February 11, 2011

The Appellate Division of the Superior Court of New Jersey has issued a 13-page written opinion in the matter of Wells Fargo Bank, N.A. v. Ford, Docket No. A-3627-06T1 (approved for publication January 28, 2011) which reversed a summary judgment in favor of Wells Fargo, finding that Wells Fargo had failed to establish standing. The opinion is significant for many reasons, among them being that any attempt by Wells Fargo to satisfy standing as a “holder” of the note upon remand would defeat any “holder in due course” status.

The original Note was in favor of Argent Mortgage Company, well known to have sold off its loans into securitizations. In its Complaint, Wells Fargo claimed to have been assigned the mortgage and note but that the assignment had not yet been recorded. The borrower defended with counterclaims and questioned the validity of the purported assignment.

Wells Fargo moved for summary judgment, submitting a certification from a person who identified himself as a “Supervisor of Fidelity National as an attorney in fact for HomeEq Servicing Corporation as attorney in fact for Wells Fargo”. Although the certification alleged knowledge of the amount due; that Wells Fargo was a holder and owner of the note and mortgage; and that the copies thereof were “true copies”, the Court noted that the certification did not indicate the source of this purported knowledge. Wells Fargo also relied upon an “Assignment of Mortgage” which the Court noted was not authenticated in any manner.

The Court concluded that Wells Fargo failed to establish its standing to pursue the foreclosure action and reversed the summary judgment, holding that the documents that Wells Fargo relied upon in support of its motion for summary judgment were not properly authenticated and that the certification was not based on personal knowledge as to the alleged “holder and owner” allegations, or how the person who signed the certification obtained his alleged knowledge. The Court also held that the purported assignment of the mortgage, which must be produced in New Jersey to maintain a foreclosure action (citing New Jersey statute), should not have been considered by the trial court as it was not authenticated by an affidavit or certification based on personal knowledge.

Significantly, the Court also noted that even if Wells Fargo could, on remand, establish its standing as a holder of the note through an indorsement from Argent “at this late date”, Wells Fargo would not thereby become a holder in due course that could avoid whatever defenses the borrower would have to a claim by Argent because Wells Fargo is now aware of these defenses.

The significance of this opinion; the new foreclosure rules recently implemented in New Jersey; and other court rulings in New Jersey including the discovery and dismissal rulings obtained by FDN attorneys Jeff Barnes, Esq. and Michael Jacobson, Esq. in several New Jersey foreclosure actions, will be discussed at the upcoming foreclosure defense seminar which is scheduled for Friday, February 25, 2011 in Edison, New Jersey. Registration forms for this seminar are available upon request by e-mail.

Jeff Barnes, Esq.,