Federal National Mortgage Association v. Riley, T.
Federal National Mortgage Association v. Riley, T. No. 2038 MDA 2016
Pa. Super. Ct.Aug 16, 2017Background
- Terrence and Andrea Riley executed a promissory note and mortgage in 2008 for property on Gilbert Road; payments ceased in August 2010.
- HSBC filed a mortgage foreclosure complaint in 2015; Federal National Mortgage Association (FNMA) was later substituted as plaintiff and moved for summary judgment in August 2016.
- FNMA supported its motion with copies of the note, mortgage, recorded assignments, and an affidavit from Van Anderson (a foreclosure specialist/servicing agent records custodian) establishing default and the amount due.
- The Rileys opposed with legal arguments alleging (among other things) that the note had been securitized/bifurcated from the mortgage and that FNMA lacked standing; they did not submit affidavits, depositions, or other evidentiary material to controvert FNMA’s facts.
- The trial court found FNMA established a prima facie case of foreclosure (default, failure to pay interest, specified recorded amount) and that the Rileys failed to produce record evidence creating a genuine dispute of material fact; summary judgment for FNMA was granted and affirmed on appeal.
Issues
| Issue | Plaintiff's Argument (FNMA) | Defendant's Argument (Riley) | Held |
|---|---|---|---|
| 1. Summary judgment appropriate in foreclosure? | FNMA: established default, unpaid interest, and specified recorded amount via records and Anderson affidavit. | Rileys: denied factual averments and raised legal defenses; argued FNMA did not prove facts with originals. | Court: Granted summary judgment; Rileys failed to produce evidence creating a factual dispute. |
| 2. Applicability of Nanty‑Glo rule to exclude Anderson affidavit? | FNMA: Nanty‑Glo does not apply because Rileys produced no contradictory factual evidence; Anderson’s affidavit is admissible to prove default/amount. | Rileys: movant relied only on affidavit; Nanty‑Glo bars conclusiveness of such testimony. | Court: Nanty‑Glo inapplicable—no genuine dispute of material fact presented by Rileys, so affidavit may be considered. |
| 3. Standing — must plaintiff produce original note? | FNMA: Rules require pleading certain averments and assignments; originals not required; assignments and other records show chain and possession. | Rileys: Best evidence rule and cases like In re Walker require review of original endorsements; FNMA lacked proof of possession/original. | Court: FNMA had standing as holder via assignments and records; originals not required for standing under Pa. R.C.P. 1147. |
| 4. Effect of alleged securitization/bifurcation of note and mortgage | FNMA: assignments’ language conveys the note and beneficial interest; no record evidence of securitization defeating FNMA’s interest. | Rileys: argued note was securitized/bifurcated (e.g., via PSA/REMIC), destroying negotiable instrument and FNMA’s enforcement right. | Court: Rejected bifurcation defense—assignments expressly conveyed note and mortgage together; Rileys offered no record evidence to support securitization claim. |
Key Cases Cited
- Borough of Nanty‑Glo v. American Surety Co. of N.Y., 163 A. 523 (Pa. 1923) (limits sole reliance on testimonial affidavits/depositions in motions practice)
- Bank of America, N.A. v. Gibson, 102 A.3d 462 (Pa. Super. 2014) (holder entitled to summary judgment where mortgagor admits default, failure to pay, and recorded mortgage amount)
- Washington v. Baxter, 719 A.2d 733 (Pa. 1998) (summary judgment standards and burdens of non‑moving party)
- Landau v. Western Pennsylvania Nat. Bank, 282 A.2d 335 (Pa. 1971) (mortgage foreclosure summary judgment criteria)
- Montgomery County v. MERSCORP, Inc., 795 F.3d 372 (3d Cir. 2015) (recording‑act analysis rejecting duty to record all land conveyances)