NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4238-15T2
HSBC BANK USA, NATIONAL
ASSOCIATION TRUSTEE FOR
DEUTSCHE ALT-A SECURITIES,
INC. MORTGAGE LOAN TRUST,
SERIES 2007-OA2 MORTGAGE
PASS-THROUGH CERTIFICATE,
Plaintiff-Respondent,
v.
DEBORAH DELBANGO a/k/a
DEBORAH VERITAS a/k/a
DEBORAH F. VERITAS, and
NATIONAL CITY BANK,
Defendants-Appellants.
_______________________________
Argued August 8, 2017 – Decided August 17, 2017
Before Judges Hoffman and Currier.
On appeal from the Superior Court of New
Jersey, Chancery Division, Monmouth County,
Docket No. F-014533-14.
Gary E. Fox argued the cause for appellant
(Fox & Melofchik, L.L.C., attorneys; Mr. Fox
on the briefs).
Stuart I. Seiden argued the cause for
respondent (Duane Morris LLP, attorneys; Mr.
Seiden, Brett L. Messinger, and Kelly K.
Bogue, of counsel and on the brief).
PER CURIAM
In this residential foreclosure action, defendant Deborah
Delbango appeals from an order entered after trial striking her
answer and referring the case to the Office of Foreclosure, and
the subsequent final judgment. After a review of the contentions
in light of the record and applicable legal principles, we affirm.
We discern the following facts and procedural history from
the record on appeal.
In January 2007, defendant executed an adjustable rate note
to IndyMac Bank, FSC and a mortgage securing the note to Mortgage
Electronic Registration Systems, Inc.
In December 2011, defendant became unemployed and she
apprised IndyMac of her situation in January 2012. Defendant and
IndyMac entered into a conditional forbearance agreement
(agreement) in February 2012. The agreement permitted defendant
to make lower monthly payments for one year that would be applied
towards the original principal and interest. The bank would not
undertake any legal action against defendant as long as she was
in compliance with the agreement. Although the agreement stated
that IndyMac would work with defendant to identify "a more
permanent foreclosure prevention alternative," it clarified that
defendant might not qualify for any foreclosure alternative and
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the bank had the sole discretion to make that decision. It further
advised that there was no guarantee that the loan would be eligible
for consideration under the Home Affordable Modification Program
(HAMP).
In April 2013, defendant was informed in a Notice of Intention
to Foreclose (NOI) that she was in default on her mortgage as of
June 2012. Plaintiff HSBC Bank U.S. was identified in the NOI as
the lender.1 The NOI advised defendant that she needed to pay
$28,627.44 within thirty-five days in order to cure the default.
IndyMac sent defendant a notice in October 2013 that it was
transferring the servicing of her loan to Ocwen Loan Servicing,
LLC (Ocwen) effective November 1. Ocwen contacted defendant
shortly thereafter, advising that it was evaluating her
qualification for HAMP before considering any other alternatives.
Defendant submitted an application under HAMP with all required
documents. However, in December 2013, defendant was informed by
Ocwen that plaintiff did not allow loan modifications.
Plaintiff filed its complaint for foreclosure in April 2014.
Defendant contested the action and asserted affirmative defenses.
1
At some point not stated in the record, the note was transferred
to a new lender – plaintiff HSBC Bank U.S. There is no challenge
to plaintiff's ownership of the Note.
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A bench trial took place over two days in September 2015 before
Judge Patricia Del Bueno Cleary.
Ocwen's representative testified at trial that he had
personally reviewed Ocwen's business records and confirmed that
plaintiff was in possession of the note and mortgage. He also
stated that defendant's account was in default commencing with the
monthly payment due on July 1, 2012. The representative explained
that although defendant was making payments in accordance with the
forbearance agreement, those payments were one-third of the
original mortgage payment amount; therefore, the account went into
default. He stated: "[B]ecause they were not full payments it
would take almost three of those payments just to equal one
payment" and therefore the account would reflect it was in default.
Defendant testified at trial that when she learned she was
to be laid off from her job, she contacted IndyMac in January 2012
advising of her situation. Defendant stated that IndyMac provided
her information on how to apply for the forbearance plan. She
received the agreement and signed it, and was of the understanding
that as long as she made the payments established under the
forbearance plan, she was not defaulting on the note.
Defendant remained current on her mortgage payments through
March 2012. In April, she sent in the payment listed on the
agreement (roughly a third of her original mortgage payment). She
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paid the lesser amounts set forth under the agreement through
March 2013. Defendant conceded that when she received her mortgage
statement in April 2013, it noted that she was ten months past due
in her payments.
At the expiration of the agreement, defendant testified that
she was told by an IndyMac representative to fill out an
application for a loan modification. She submitted the application
and subsequent requests for financial documents and information.
Defendant testified that she spoke to numerous representatives of
IndyMac and Ocwen during this time period, and that she documented
her conversations in handwritten notes. These notes were presented
at trial and admitted into evidence. The notes reflect
conversations with different people at IndyMac from April through
October 2013. The notes reflected that financial information was
requested; defendant also called periodically to check on the
status of her loan modification application.
Defendant also testified that she was told by several people
at IndyMac that she should not make any mortgage payments while
she was going through the loan modification process. She did not
have any written documentation to support this testimony nor any
notes memorializing those conversations.
After defendant received the letter in October 2013 that her
loan was being transferred to Ocwen for servicing, she contacted
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IndyMac. She states she was told that her application would be
transferred to Ocwen who would continue assessing her
modification. Before Owen took over the loan on November 1, 2013,
defendant stated that several IndyMac representatives contacted
her requesting additional financial information. As all of the
information was not received by IndyMac before November 1,
defendant was told that IndyMac could no longer act on her
application, and it was going to be transferred to Ocwen.
Defendant made an appointment to speak with an Ocwen
representative in mid-November; during that conversation she was
told she needed to submit additional information to process her
modification request. Defendant confirmed that she received the
subsequent letter in December 2013 advising her that plaintiff did
not participate in the HAMP program nor permit loan modifications.
Following the close of counsels' arguments, Judge Cleary
issued an oral decision. She noted that plaintiff had proven a
prima facie case for foreclosure on the property; there was no
dispute that defendant had signed the note and mortgage nor that
she had defaulted on the loan. However, defendant asserted the
affirmative defense of unclean hands because she had been told by
various individuals to stop making payments after the conclusion
of the forbearance period.
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In addressing the proffered defense, the judge reviewed the
"copious notes" that had been presented by defendant memorializing
her conversations with the lender's representatives. Judge Cleary
stated:
There are many, many letters, many, many
notes, it sets forth times, it sets forth
dates, it sets forth names of persons who the
defendant contacted about this. There are
numerous times where . . . plaintiff told the
defendant to send in more information, which
she did . . . . But there is nothing in any
of these notes that tells us a name of who
suggested . . . or who told the defendant that
she did not have to pay. There is not a
specific date where she was told not to pay.
The judge concluded that defendant had not met her burden of
proof to establish unclean hands, and therefore, an order striking
the answer and defenses was entered. The matter was transferred
to the foreclosure unit.
On appeal, defendant reiterates her argument that the
doctrine of unclean hands prevents the entry of a judgment of
foreclosure. She relies on Totowa Savings and Loan Ass'n v.
Crescione, 144 N.J. Super. 347, 351 (App. Div. 1976), to support
her contention that since it was plaintiff who "induced and caused
the default," equity requires that such actions not be tolerated.
Defendant urges us to fashion an equitable remedy to permit her
to remain in her home and resume making her mortgage payments
without the imposition of any arrearages.
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In considering these arguments, we are mindful of our limited
scope of review. "The factual findings of a trial court are
reviewed with substantial deference on appeal, and are not
overturned if they are supported by 'adequate, substantial and
credible evidence.'" Manahawkin Convalescent v. O'Neill, 217 N.J.
99, 115 (2014) (citations omitted). Such deference is especially
due when a trial judge's findings "are substantially influenced
by [the judge's] opportunity to hear and see the witnesses and to
have the 'feel' of the case, which a reviewing court cannot enjoy."
Zaman v. Felton, 219 N.J. 199, 216 (2014) (alteration in original)
(citation omitted).
Judge Cleary considered all of the evidence presented by
defendant. She observed that defendant was meticulous in keeping
handwritten notes of her conversations with various mortgage
representatives. However, in the multitude of notes admitted into
evidence, there was not one reference to a conversation in which
defendant was instructed to cease her mortgage payments. There
was no support for her allegation that she had been told to stop
her payments. The judge found, after hearing and seeing defendant,
and considering the written evidence, that defendant could not
support her contention that she had been "induced" to default on
her mortgage.
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We do not find Totowa to be instructive under these
circumstances. In that matter, the defendants obtained a mortgage
loan from the plaintiff and were told a certain amount would be
applied to the principal and interest on the loan each month. Id.
at 349. After making the specified monthly payments for twenty
years, the defendants believed the loan was satisfied and requested
its cancellation. Id. at 350. The plaintiff then determined that
the monthly amortization figure had been incorrect, leaving the
defendants still owing a sizeable balance on the principal. Ibid.
After the defendants refused to pay the newly established
balance, the plaintiff instituted foreclosure proceedings. Ibid.
The defendants contended that the default resulted solely from the
plaintiff's conduct, and therefore, the plaintiff should be
equitably estopped from any recovery. Ibid.
We determined that, despite the mistake made by the bank in
the monthly calculation, defendants still owed, and were obligated
to pay, the principal balance. Id. at 351. They were not entitled
to a "substantial windfall, despite the absence of fault on their
part." Ibid. We agreed, however, that the "harsh remedy of
foreclosure" should be delayed and that a "fair and reasonable"
fee schedule for the payment of the balance due should be set.
Id. at 351-52.
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We fail to see how Totowa is helpful to defendant's position
in the case before us. There is no contention that plaintiff or
its predecessor made any mistake regarding this loan. Defendant
defaulted on her mortgage payments; after the forbearance period
ended, no further payments were ever made. Plaintiff advised
defendant of her default and her right to cure through the NOI.
The default was not cured. It is well established that defendant
was not entitled to a mortgage modification, U.S. Bank National
Ass'n. v. Curcio, 444 N.J. Super. 94, 114 (App. Div. 2016), and
she was informed of that in the forbearance agreement.
The trial judge's determination was supported by the credible
evidence in the record.
Affirmed.
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