J. S73006/16

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

U.S. BANK NATIONAL ASSOCIATION, 

AS TRUSTEE FOR STRUCTURED ASSET 

INVESTMENT LOAN TRUST MORTGAGE 

PASS-THROUGH CERTIFICATES, 

SERIES 2006-BNC3

:

:

:

:

:

IN THE SUPERIOR COURT OF

PENNSYLVANIA

:

v. :

:

CHARLES E. McGOWAN, THE UNITED 

STATES OF AMERICA

:

: No. 1843 WDA 2015

:

APPEAL OF: CHARLES E. McGOWAN :

Appeal from the Order Entered November 2, 2015,

in the Court of Common Pleas of Westmoreland County

Civil Division at No. 3065 OF 2014

BEFORE: FORD ELLIOTT, P.J.E., LAZARUS AND JENKINS, JJ. 

MEMORANDUM BY FORD ELLIOTT, P.J.E.: FILED DECEMBER 22, 2016

Charles E. McGowan (“appellant”) appeals the November 2, 2015 order 

of the Court of Common Pleas of Westmoreland County that granted the 

motion for summary judgment of U.S. Bank National Association, as Trustee 

for Structured Asset Investment Loan Trust Mortgage Pass-Through 

Certificates, Series 2006-BNC3 (“appellee”), and entered an in rem

judgment in favor of appellee and against appellant in the amount of 

$106,412.29 plus interest from April 21, 2015, and other costs and charges 
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collectible under the mortgage, for foreclosure and sale of the mortgaged 

property.1

On May 22, 2006, appellant made, executed, and delivered a 

mortgage for real property located at 1360 Conway Drive, Greensburg, 

Pennsylvania, to BNC Mortgage, Inc. (“BNC”). BNC subsequently assigned 

the mortgage to appellee. On July 1, 2014, appellee filed a complaint in 

mortgage foreclosure and alleged that the mortgage was in default because 

monthly payments of principal and interest due January 1, 2012, and each 

month thereafter had not been made. Appellee alleged that the amount due 

and owing was $97,221.64, which was comprised of the principal balance of 

$72,803.72, interest from December 1, 2011 to May 29, 2014 of 

$17,252.38, an escrow deficit of $5,593.27, and late charges, property 

inspections, appraisal/broker’s price opinion, and prior servicer fees of 

$1,562.77. The complaint was verified by Caroline Cochran (“Cochran”), 

contract management coordinator for Ocwen Loan Servicing, LLC (“Ocwen”). 

In the verification, Cochran explained that appellee delegated the mortgage 

 

1 On October 31, 2014, the trial court entered a consent judgment in which 

appellee and the United States of America (“U.S.”) agreed that a judgment 

would be entered in favor of appellee and against the U.S. for foreclosure of 

the mortgage of appellant and for sale of the mortgaged property of 

appellant. It was further ordered that the U.S. shall be notified by appellee 

of the date, time, and place for any sheriff’s sale of the real property of 

appellant, that the U.S. shall be entitled to payment from the proceeds of 

the sheriff’s sale to the extent its proper priority would entitle it to the same, 

and the U.S. shall be entitled to redeem the property within 120 days from 

the date of sale as provided by 28 U.S.C. § 2410. The U.S. is not 

participating in the proceedings before this court.
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servicing responsibility to Ocwen for appellant’s loan. As a result, Ocwen 

possessed all the documents and records that supported the statements in 

the complaint and appellee lacked sufficient information to make the 

verification because it did not maintain the business records for the 

mortgage. While initial attempts to effect service were unsuccessful, service 

of the complaint was made on July 3, 2014, at 10 Old Clairton Road, 

Suite 12A, in Pleasant Hills, Pennsylvania, at a United Parcel Service Store 

where appellant maintained a post office box. 

On August 25, 2014, appellant preliminarily objected to the complaint 

on the basis of allegedly ineffective service of process, the failure to identify 

the particulars of default, the failure to identify sufficiently the parties, the 

failure to identify the transaction through a note, and that the verification 

was spurious. On October 22, 2014, the trial court overruled the preliminary 

objections and directed appellant to file an answer.

In an answer filed November 21, 2014, appellant denied the material 

allegations. Appellant averred in new matter that the trial court lacked 

personal jurisdiction over him because he was not properly served, appellee 

failed to state a cause of action because appellee did not identify itself as a 

person entitled to enforce the note, did not allege a dishonor on the 

promissory note, and that the trial court also lacked subject matter 

jurisdiction over him since appellee did not properly assert a default on the 

mortgage. Appellant also asserted a host of affirmative defenses.
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On June 26, 2015, appellee moved for summary judgment and alleged 

that there were no material facts in dispute regarding appellant’s default on 

the mortgage. The motion contained an affidavit from Peter Nocero 

(“Nocero”), contract management coordinator from Ocwen, which explained 

that the mortgage had been assigned to appellee and that appellant had 

failed to make the scheduled payments beginning with the payment that was 

due on January 1, 2012. At this point, the amount due and owing according 

to Nocero was $106,412.29.

On August 3, 2015, appellant moved to dismiss the motion for 

summary judgment and alleged he had never been served with a complaint 

and that appellee had not properly sent the motion for summary judgment, 

brief in support of summary judgment, and scheduling order.

On August 20, 2015, appellant moved to strike the motion for 

summary judgment on the basis that the trial court lacked personal 

jurisdiction because appellee had not served appellant with a copy of the 

complaint, appellee violated a court scheduling order, appellee failed to show 

that it had standing, appellant had not admitted to a default on the 

mortgage, the trial court lacked subject matter jurisdiction, the mortgage 

contract was void ab initio because it was based upon LIBOR2rates that are 

 

2

LIBOR stands for the London InterBank Offered Rate. LIBOR is the 

annualized, average interest rate at which a select group of large, reputable 

banks that participate in the London interbank money market can borrow 

unsecured funds from other banks. 

(http://fedprimerate.com/libor/index.html.)
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fraudulently manipulated, and appellee violated Section 1692g of the Fair 

Debt Collection Practices Act, 15 U.S.C.A. § 1692g, because it did not send 

an initial communication to appellant stating that it was a debt collector 

trying to collect a debt.

Following oral argument on September 4, 2015, the trial court denied 

the motion to dismiss and gave appellant 30 days to file a brief in opposition 

to the motion for summary judgment. By order dated November 2, 2015, 

the trial court determined that appellee was entitled to summary judgment 

and entered an in rem judgment in favor of appellee and against appellant 

in the amount of $106,412.29 plus interest from April 21, 2015, and other 

costs and charges collectible under the mortgage for foreclosure and sale of 

the mortgaged property. On November 20, 2015, appellant appealed to this 

court.

On appeal to this court, appellant raises the following issues for our 

review:

1. Did Plaintiff/Appellee lack standing to bring this 

action because the pre-acceleration notice 

required by Paragraph 22 of the Mortgage was 

not sent, and because the Act 91 Notice is 

defective?

2. Did the [t]rial [c]ourt lack personal jurisdiction 

over [appellant] since the Plaintiff/appellee did 

not serve [a]ppellant . . . with a copy of the 

Complaint as required by Pa.R.C.P. No. 402?

3. Did the [t]rial [c]ourt lack subject matter 

jurisdiction in this mortgage foreclosure case 

where the Plaintiff/Appellee did not provide 
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evidence that it had standing as the Holder in 

Due Course to enforce a promissory note 

signed by [appellant]?

4. Did the [t]rial [c]ourt err in granting summary 

judgment for Plaintiff/Appellee where the 

Plaintiff/Appellee did not prove the existence of 

a default upon the mortgage?

5. Did the [t]rial [c]ourt err in granting summary 

judgment for Plaintiff/Appellee where the 

Plaintiff/Appellee’s Motion for Summary 

Judgment did not include a Statement of 

Undisputed Facts as required by 25 Pa.C.S.A. 

[§] 1021.94a(b)(1)(ii) and 25 Pa.C.S.A. 

[§] 1021.94a(d)?

6. Is the Summary Judgment void because the 

fixed-rate mortgage contract itself is void 

ab initio because the interest rate is based 

upon the LIBOR rates which are fraudulently 

manipulated by the banks?

Appellant’s brief at 6.

This court reviews a grant of summary judgment under the following 

well-settled standards:

Pennsylvania law provides that summary 

judgment may be granted only in those 

cases in which the record clearly shows 

that no genuine issues of material fact 

exist and that the moving party is 

entitled to judgment as a matter of law. 

The moving party has the burden of 

proving that no genuine issues of 

material fact exist. In determining 

whether to grant summary judgment, 

the trial court must view the record in 

the light most favorable to the nonmoving party and must resolve all doubts 

as to the existence of a genuine issue of 

material fact against the moving party. 
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Thus, summary judgment is proper only 

when the uncontroverted [sic] 

allegations in the pleadings, depositions, 

answers to interrogatories, admissions of 

record, and submitted affidavits 

demonstrate that no genuine issue of 

material fact exists, and that the moving 

party is entitled to judgment as a matter 

of law. In sum, only when the facts are 

so clear that reasonable minds cannot 

differ, may a trial court properly enter 

summary judgment.

[O]n appeal from a grant of summary 

judgment, we must examine the record 

in a light most favorable to the 

non-moving party. With regard to 

questions of law, an appellate court’s 

scope of review is plenary. The Superior 

Court will reverse a grant of summary 

judgment only if the trial court has 

committed an error of law or abused its 

discretion. Judicial discretion requires 

action in conformity with law based on 

the facts and circumstances before the 

trial court after hearing and 

consideration.

Gutteridge v. A.P. Green Services, Inc., 804 A.2d 

650, 651 (Pa.Super. 2002).

Wright v. Allied Signal, Inc., 963 A.2d 511, 514 (Pa.Super. 2008) 

(citation omitted). Summary judgment in mortgage foreclosure actions is 

subject to the same rules as any other civil action. See Pa.R.C.P. 1141(b).

Initially, appellant contends that the trial court lacked subject matter 

jurisdiction to hear this case because there is nothing in the record to 

indicate that appellee served him with a Notice of Default as contractually 
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required by paragraphs 20 and 22 of the Mortgage Security Contract 

Agreement before accelerating the loan and proceeding with foreclosure.

A review of the exhibits attached to the complaint indicates that a 

notice of default labeled “Act 91 Notice Take Action to Save your Home from 

Foreclosure” was sent to appellant at the address where he received service: 

10 Old Clairton Road, Suite 12A, Pleasant Hills, Pennsylvania. The notice 

also indicates that it was sent to appellant by first class mail and by certified 

mail with the certified mail number indicated on the form. This court does 

not agree with appellant’s contention that appellee failed to properly issue a 

notice of default so that it lacked standing.

Appellant next contends that the trial court lacked personal jurisdiction 

over appellant since appellee did not serve him with a copy of the complaint 

as required by the Pennsylvania Rules of Civil Procedure. Appellant asserts 

that the Sheriff made only one attempt to serve him at his actual residence: 

540 Lisa Drive, West Mifflin, Pennsylvania. As a result, appellant believes 

that appellee’s request for alternative service was premature because it only 

attempted service at his domicile once. Appellant argues that there is 

nothing in the record to indicate that appellee served him with a copy of the 

complaint in accordance with the trial court’s November 21, 2014 order 

which permitted service by mail and by posting at the property. Appellant 

also disagrees with the trial court’s determination that he waived any 

objection to lack of service of the complaint when he filed an answer to it. 
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Appellant asserts that he filed an answer under threat, duress, and coercion 

because he believed that the trial court would enter a default judgment 

against him if he did not answer the complaint.

Rule 402 of the Pennsylvania Rules of Civil Procedure provides in 

pertinent part:

(a) Original process may be served

(1) By handing a copy to the 

defendant; or 

(2) By handing a copy 

(i) at the residence of the 

defendant to an adult 

member of the family 

with whom he resides; 

but if no adult member 

of the family is found, 

then to an adult person 

in charge of such 

residence; or

(ii) at the residence of the 

defendant to the clerk 

or manager of the 

hotel, inn, apartment 

house, boarding house 

or other place of 

lodging at which he 

resides; or 

(iii) at any office or usual 

place of business of the 

defendant to his agent 

or to the person for the 

time being in charge 

thereof. 

Pa.R.C.P. 402(a).
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Appellee argues that it properly served appellant when it served 

appellant at the UPS store at 12 Old Clairton Road, Suite 12A, Pleasant Hills, 

Pennsylvania, in compliance with Pennsylvania Rule of Civil 

Procedure 402(a)(2)(iii). Appellee attempted to serve appellant both at the

mortgaged property and at another address for him, 3567 Mountain View 

Drive, #122, West Mifflin, Pennsylvania, but the Sheriff of Allegheny County 

as deputized by the Sheriff of Westmoreland County found the property 

vacant. Appellant established the UPS store as his address. The Sheriff of 

Allegheny County served appellant by way of Mr. Nestor, the UPS store 

manager, who accepted service on behalf of appellant. Although appellant 

argues that Nestor was not authorized to accept service, the sheriff’s 

affidavit of service creates a presumption of effective service. See 

Hollinger v. Hollinger, 206 A.2d 1 (Pa. 1965) (in the absence of fraud, the 

return of service by a sheriff, which is full and complete, is conclusive and 

immune from attack by extrinsic evidence). The trial court did not err when 

it determined that appellant was properly served.

In addition, the trial court, by order dated November 21, 2014, 

directed appellee to serve a copy of the complaint by posting at the 

mortgaged property and by first class mail to three “last known addresses” 

of appellant which included the UPS store at 10 Old Clairton Road, 

Suite 12A, Pleasant Hills, Pennsylvania, as well as the mortgaged premises. 

There is no allegation that appellee did not comply with this order.
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Appellant next contends that the trial court lacked subject matter 

jurisdiction where appellee did not provide evidence that it had standing as 

the holder in due course to enforce a promissory note signed by appellant. 

First, appellant argues that none of the pleadings filed by appellee, 

subsequent to the filing of the complaint, were verified as required by 

Pennsylvania Rule of Civil Procedure 1024. A review of the record including 

appellant’s motion to dismiss the motion for summary judgment and his

motion to strike the motion for summary judgment fails to reveal that 

appellant raised this point about verification beyond verification of the 

complaint before the trial court. Therefore, it is waived. Pennsylvania Rule 

of Civil Procedure 302(a) provides that only issues properly raised and 

preserved in the trial court will be considered on appeal.

Second, with respect to whether appellee had standing, appellant 

argues that appellee failed to offer proof that it was the holder of the 

promissory note. Appellant notes that appellee failed to attach a copy of the 

note to the complaint though it did when it responded to appellant’s 

preliminary objections. Appellant argues that appellee lacked standing 

because it failed to prove that it was the holder of a promissory note signed 

by appellant. Further, appellant asserts that because appellee did not 

possess the note, it could not institute foreclosure proceedings.

Pennsylvania Rule of Civil Procedure 2002 provides, “[e]xcept as 

otherwise provided . . . all actions shall be prosecuted by and in the name of 
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the real party in interest, without distinction between contracts under seal 

and parol contracts.” Pa.R.C.P. 2002(a); see also J.P. Morgan Chase 

Bank, N.A. v. Murray, 63 A.3d 1258, 1258 (Pa.Super. 2013) (finding a 

debtor’s claim that appellee bank was not a real party in interest to bring 

foreclosure action was a challenge to appellee’s standing). “[A] real party in 

interest is a [p]erson who will be entitled to benefits of an action if 

successful. . . . [A] party is a real party in interest if it has the legal right 

under the applicable substantive law to enforce the claim in question.” 

U.S. Bank, N.A. v. Mallory, 982 A.2d 986, 993-994 (Pa.Super. 2009) 

(citation and quotation marks omitted; some brackets in original).

In a mortgage foreclosure action, the mortgagee is the real party in 

interest. See Wells Fargo Bank, N.A. v. Lupori, 8 A.3d 919, 922 n.3 

(Pa.Super. 2010). Of course, an original mortgagee may assign its interest 

as mortgagee, as was the case here. This is made evident under our 

Pennsylvania Rules of Civil Procedure governing actions in mortgage 

foreclosure that require a plaintiff in a mortgage foreclosure action 

specifically to name the parties to the mortgage and the fact of any 

assignments. Pa.R.C.P. 1147. A person foreclosing on a mortgage, 

however, also must own or hold the note. This is so because a mortgage is 

only the security instrument that ensures repayment of the indebtedness 

under a note to real property. See Carpenter v. Longan, 83 U.S. 271, 275 

(1872) (noting “all authorities agree the debt is the principal thing and the 
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mortgage an accessory.”). A mortgage can have no separate existence. Id. 

When a note is paid, the mortgage expires. Id. On the other hand, a 

person may choose to proceed in an action only upon a note and forego an 

action in foreclosure upon the collateral pledged to secure repayment of the 

note. See Harper v. Lukens, 112 A. 636, 637 (Pa. 1921) (noting, “as suit 

is expressly based upon the note, it was not necessary to prove the 

agreement as to the collateral.”). For our instant purposes, this is all to say 

that to establish standing in this foreclosure action, appellee had to plead 

ownership of the mortgage under Rule 1147, and have the right to make

demand upon the note secured by the mortgage.3

Here, appellant alleged that appellee failed to prove that it had 

standing to enforce the note because appellee did not establish that it had 

possession of the promissory note when it filed its complaint in mortgage 

foreclosure. Appellant argues that the note attached to the motion for 

summary judgment does not establish that appellee owned the note because 

no witness verified the note or testified to its authenticity. Once again, 

appellant failed to raise any issue based on verification before the trial court 

so any argument based on verification is waived.

 

3 The rules relating to mortgage foreclosure actions do not expressly require 

that the existence of the note and its holder be pled in the action. 

Nonetheless, a mortgagee must hold the note secured by a mortgage to 

foreclose upon a property. “The note and mortgage are inseparable; the 

former as essential, the latter as an incident.” Longan, 83 U.S. at 274.
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The trial court determined that appellee had been assigned the 

mortgage and that the note was endorsed in blank, was negotiable, and was 

possessed by appellee prior to the commencement of the foreclosure action. 

(Trial court opinion, 12/23/15 at 3.)

Here, the note produced by appellee indicated that appellant was the 

borrower and BNC Mortgage, Inc., was the lender. An allonge to the note 

was endorsed without recourse in blank by Eleanora Martino, Vice President 

of Quality Assurance for BNC Mortgage, Inc. A note endorsed in blank 

becomes payable to “bearer” and may be negotiated by transfer of 

possession alone until specially endorsed. See 13 Pa.C.S.A. §§ 3109(a), 

3205(b). The note as a negotiable instrument entitles the holder of the note 

to enforcement of the obligation. See id. §§ 3109(a), 3301. Thus, 

appellant’s argument that ownership of the note cannot be established in 

appellee because there was no formal assignment or transfer is unavailing, 

because “the chain of possession by which [a party] c[o]me[s] to hold the 

[n]ote [is] immaterial to its enforceability by [the party].” Murray, 63 A.3d 

at 1266; see Bank of America, N.A. v. Gibson, 102 A.3d 462, 466 

(Pa.Super. 2014) (rejecting an identical argument). Appellee, as the holder 

of the note, a negotiable instrument not challenged herein, was entitled to 

make demand upon and to enforce the obligations under the note. 

Accordingly, given appellee’s ownership of the mortgage and possession of 
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the note, the trial court did not err in concluding that appellee had standing 

as a real party in interest to bring the underlying foreclosure action.

Appellant continues to argue that appellee did not possess the note 

and did not prove the existence of endorsements to the note and that 

Mortgage Electronic Registration Systems, Inc. (“MERS”), did not have 

possession of the note and lacked authority to assign the note.

Appellee produced the note before the trial court. Further, to the 

extent that appellant contends that MERS lacked standing to foreclose 

because it did not hold the note, this argument is meritless. MERS was not 

a party to this litigation, did not seek to enforce an interest in the underlying

loan in the litigation, and was only involved to the extent that it was a 

nominee for the original lender. In addition, while appellant asserts that 

MERS could not assign the note, appellee never asserted that MERS assigned 

the note to appellee. Further, in Murray, 63 A.3d at 1265-1266, this court 

held that a note secured by a mortgage was a negotiable instrument 

governed by Section 3104 of the Pennsylvania Uniform Commercial Code, 

13 Pa.C.S.A. § 3104, such that defects in the chain of possession did not

affect the right of the mortgagee to enforce the note. 

Appellant next contends that the trial court erred when it granted 

summary judgment because appellee did not prove the existence of a 

default upon the mortgage. Appellant argues that because appellee did not 
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plead a default upon the promissory note, it could not claim a default on the 

mortgage.

Pennsylvania Rule of Civil Procedure 1147 provides in pertinent part: 

(a) The plaintiff shall set forth in the complaint:

(1) the parties to and the date of the 

mortgage, and of any assignments, 

and a statement of the place of 

record of the mortgage and 

assignments;

(2) a description of the land subject to 

the mortgage;

(3) the names, addresses and interest 

of the defendants in the action and 

that the present real owner is 

unknown if the real owner is not 

made a party;

(4) a specific averment of default;

(5) an itemized statement of the 

amount due; and

(6) a demand for judgment for the 

amount due.

Pa.R.C.P. 1147(a).

A review of the complaint reveals that appellee complied with the 

requirements of Pa.R.C.P. 1147(a).

Appellant also argues that the affidavit of Nocero does not offer any 

evidence of a default to support the motion for summary judgment. Nocero, 

a contract management coordinator for Ocwen, states in the affidavit, that 

he had access to the business records maintained in the servicing of the 
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mortgage in question, that appellant entered into the mortgage with MERS, 

the nominee for BNC Mortgage, Inc., that the mortgage was assigned to 

appellee, that appellant’s payment was due and owing on January 1, 2012, 

and for each month thereafter, and set forth the amounts due. Appellant 

argues that Nocero is not a competent witness because he does not go into 

detail about his knowledge about the facts to which he attests. 

This court does not find any merit in appellant’s claims here. In order 

for summary judgment to be proper in a mortgage foreclosure action, the 

moving party must establish the amount of the mortgage, that the mortgage 

is in default, and that the mortgagor has failed to pay interest on the 

mortgage. Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa.Super. 

1998). Appellee did so. Nocero’s affidavit established how he had access to 

the information. Appellant points to no statute, rule, or case law that 

requires the degree of specificity demanded by appellant regarding exactly 

how Nocero acquired the information.

Furthermore, when responding to the allegations of default listed in 

the complaint in his answer, appellant did not provide specific denials as 

required under Pennsylvania Rule of Civil Procedure 1029. Rule 1029 

provides in pertinent part:

(b) Averments in a pleading to which a responsive 

pleading is required are admitted when not 

denied specifically or by necessary implication. 

A general denial or a demand for proof, except 

as provided by subdivision (c) of this rule, shall 

have the effect of an admission.
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(c) A statement by a party that after reasonable 

investigation the party is without knowledge or 

information sufficient to form a belief as to the 

truth of an averment shall have the effect of a 

denial.

Pa.R.C.P. No. 1029(b)-(c).

In his answer, appellant responded with general denials except for his 

argument that appellee lacked standing. The trial court did not err when it 

granted summary judgment.

Appellant next contends that the trial court erred when it granted 

summary judgment where appellee’s motion for summary judgment did not 

include a statement of undisputed facts.

Appellee asserts that appellant waived this issue because he did not 

raise it before the trial court. Appellant admits that he did not raise the 

issue before the trial court. Accordingly, this issue is waived. See

Pa.R.A.P. 302(b).

Finally, appellant argues that the summary judgment is void because 

the fixed rate mortgage contract is void ab initio because the interest rate 

is based upon LIBOR which is fraudulently manipulated by the banks. 

Appellant argues that a cartel of banks act together criminally to set the 

rates such that his mortgage rate was fraudulently established. This 

argument has no merit. Regardless of the actions of banks that set the 

LIBOR rates, appellant agreed to the rate when he signed the mortgage and 

obtained the loan and then defaulted on his obligation.
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Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 12/22/2016