U.S. Bank, N.A. v. Montalvo
3:08-cv-01504
M.D. Penn.Oct 15, 2013Background
- In 2003 Antonio Montalvo Sr. borrowed $223,250 and both defendants executed a mortgage on Mount Pocono property; the mortgage was later assigned to U.S. Bank.
- Defendants defaulted and U.S. Bank filed this in-rem mortgage foreclosure seeking $384,702.80 plus fees (motion for summary judgment filed by plaintiff).
- Ocwen Loan Servicing provided an affidavit (Timeka Motlow) describing account history, default, amount due, and stating no current loan modification exists.
- Defendants (pro se) denied default and asserted pending loan modification applications under Pennsylvania Act 91/HEMAP and federal HAMP, but produced no documentary proof in opposition to summary judgment.
- The court treated the action as strictly in rem foreclosure (not an in personam suit on the note) and questioned whether any statutory or programmatic stay from loan-modification applications applied.
- Because defendants failed to submit documentary evidence of any pending or current loan-modification agreement, the court deferred ruling and ordered defendants to supplement the record with such documentation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to summary judgment on foreclosure | U.S. Bank: valid mortgage assigned to plaintiff, defendants defaulted, amount due shown by servicer affidavit | Montalvo: denies default; challenges affidavit’s personal-knowledge/hearsay foundation | Court: summary judgment merits supported by mortgage, assignment, and Motlow affidavit; defers final ruling pending evidence of loan-modification stay |
| Admissibility of servicer affidavit/business records | Motlow affidavit qualifies under Fed. R. Evid. 803(6) as an "other qualified witness" with knowledge of Ocwen’s recordkeeping | Defendants: Motlow lacks personal knowledge; testimony is hearsay | Court: Motlow has sufficient familiarity with records and business practices to lay proper foundation; records admissible as business records |
| Effect of alleged pending loan-modification applications (HEMAP/HAMP) | U.S. Bank: no evidence of any pending/approved modification; foreclosure may proceed absent documentation | Montalvo: timely filed applications create statutory or programmatic stay of foreclosure | Court: stays (Act 91/HEMAP or HAMP) can temporarily suspend foreclosure, but defendant presented no documentary proof; court orders defendants to produce evidence before ruling |
| Nature of action (in rem vs in personam) | U.S. Bank: complaint is mortgage foreclosure seeking in rem relief only | Defendants: argue assign. endorsed only mortgage not note; imply personal liability claims or defenses | Court: action is in rem foreclosure only; Junior not a signatory to the note, and challenge to note assignment is irrelevant to in rem mortgage remedy |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard; materiality and genuine dispute)
- Celotex Corp. v. Catrett, 477 U.S. 317 (burden on movant in summary judgment)
- Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871 (nonmoving party must show specific facts)
- Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358 (draw inferences for nonmoving party)
- Pelullo, 964 F.2d 193 (foundation for business-records exception; "other qualified witness")
- United States v. Console, 13 F.3d 641 (requirements for business-records foundation)
- Insilco Corp. v. Rayburn, 543 A.2d 120 (Pa. Super. Ct. 1988) (mortgage foreclosure is generally in rem; personal judgment requires waiver)
- Meco Realty Co. v. Burns, 200 A.2d 869 (Pa. 1964) (purpose of foreclosure judgment is judicial sale)
- Cunningham v. McWilliams, 714 A.2d 1054 (Pa. Super. Ct. 1998) (summary judgment appropriate where mortgagors admit default or record shows default)