SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1059-17T2

U.S. BANK, NATIONAL 

ASSOCIATION, AS TRUSTEE 

RELATING TO THE CHEVY 

CHASE FUNDING LLC 

MORTGAGE-BACKED 

CERTIFICATES, SERIES 2005-3,

Plaintiff-Respondent,

v.

JIN CHOI, his/her heirs, devisees, 

and personal representatives, and his,

her, their or any of their successors 

in right, title and interest,

Defendant-Appellant,

and

JI YOUNG, MIDLAND FUNDING,

LLC, BALLON STOLL BADER

& NADLER PC, and STATE OF 

NEW JERSEY,

Defendants.

________________________________

Submitted February 11, 2019 – Decided March 6, 2019

NOT FOR PUBLICATION WITHOUT THE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.
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A-1059-17T2

Before Judges Fasciale and Rose.

On appeal from Superior Court of New Jersey, 

Chancery Division, Bergen County, Docket No. F015615-14.

Joseph A. Chang, attorney for appellant (Jeffrey Zajac, 

on the brief).

Pluese, Becker, & Saltzman, LLC, attorneys for 

respondent (Stuart H. West, on the brief).

PER CURIAM 

In this residential foreclosure case, Jin Choi (defendant) appeals from a 

September 19, 2017 final judgment. Defendant stopped making payments to 

U.S. Bank, N.A. (plaintiff) in 2009. Defendant contends that the judge erred by 

(1) finding that defendant lacked standing to challenge plaintiff's compliance 

with the agreement governing the mortgage; (2) finding that plaintiff proved that 

it possessed the promissory note and mortgage; (3) finding that plaintiff had

standing to file the foreclosure complaint; and (4) granting plaintiff summary 

judgment. We disagree and affirm.

On July 8, 2005, defendant executed an adjustable rate, negatively 

amortizing note (the note) containing a prepayment penalty in the amount of 

$1,148,000 with an initial interest rate of 6.5% made payable to Chevy Chase 

Bank, F.S.B. (Chevy Chase Bank). At the same time, defendant also executed 
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a mortgage to Mortgage Electronic Registration System (MERS), securing 

repayment of the amounts due under the terms of the note. In 2008, defendant 

executed a Mortgage Loan Modification Agreement (the Modification 

Agreement) with Chevy Chase Bank, which represented an adjustable rate, 

negatively amortizing loan, and contained a prepayment penalty. The "lender" 

on the Modification Agreement was "Chevy Chase Bank, F.S.B." The 

acknowledgement designated Chevy Chase Bank, F.S.B. "the holder of the Deed 

of Trust note." In 2010, a MERS Assignment of Mortgage1 was executed that 

purportedly assigned the mortgage to plaintiff.

Section 2.01 of the Pooling and Servicing Agreement (PSA) stated that 

Chevy Chase Funding would provide the Trustee with the original mortgage 

note endorsed by the originator, Chevy Chase Bank, in blank with a complete 

chain of endorsements from the payee to the Trustee. Chevy Chase Funding, 

LLC would also provide the Trustee with the

[m]ortgage [n]ote, endorsed without recourse in either 

blank or to the order of U.S. Bank National Association 

[a]s [T]rustee . . . with all intervening endorsements 

 

1

 MERS is a system that tracks ownership and servicing changes of the mortgage 

loan without the need to record any of the documents each time ownership 

changes. Entities must be members of MERS to participate. If a mortgage is 

sold or transferred from a participating MERS member to an entity that is not a 

member, an Assignment of Mortgage is prepared transferring the mortgage from

MERS to the non-MERS entity.
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showing a complete chain of endorsement from the 

originator to the last endorser[, and] . . . an original 

assignment or assignments of [m]ortgage showing an 

unbroken chain of title from the originator to the 

[p]erson assigning to the Trustee (or to MER[S] . . .).

Plaintiff filed this complaint in April 2014, and then moved for summary 

judgment. Defendant opposed the motion and cross-moved for summary 

judgment. Judge Robert P. Contillo reserved decision and granted defendant 

permission to depose Sorell Elbert (Elbert), plaintiff's document custodian. 

This deposition related to Elbert's "custodial functions" and not as a

representative of the Trust. Exhibit E of Elbert's affidavit was a "screenshot 

maintained in the ordinary course of the [c]ustodian's business." She 

characterized this document by stating, "an exception was added as a result of 

the [c]ustodian not having possession of the original recorded [m]ortgage. The 

exception was removed on May 21, 2007. No other exceptions are noted. The 

absence of any other exception demonstrates the [c]ustodian's possession of the 

original [n]ote on September 20, 2005." As the "exception" was removed, the 

original mortgage, as opposed to a copy, was received by the Trustee.

Elbert also stated "the original [n]ote was endorsed in compliance with 

the governing [PSA]." She attached an undated Final Certification of the 

Trustee, stating that "it should have been executed within [forty-five] days of 
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the execution and delivery of the Initial Certification, pursuant to [s]ection 2.02

of the [PSA] for the Trust." She said, "I acknowledge that the final cert[ified]

document itself, the letter, was not dated; but it should have been executed 

within the [forty-five] days of the initial cert[ification] being issued. And that's 

based on what the PSA requires."

Michael Ward (Ward) is an employee of Specialized Loan Servicing, LLC 

(SLS), plaintiff's servicer. He filed an affidavit in which he alleged that plaintiff 

possessed the note and mortgage. He then filed a supplemental affidavit to show 

ownership of defendant's loan. 

The judge denied defendant's cross motion for summary judgment, 

granted plaintiff's motion, and entered the judgment under review.

I.

Section 2.01 of the PSA required the depositor to provide the Trustee with 

the original mortgage note endorsed by the originator, with a complete chain of 

endorsements from the payee to the Trustee. In the judge's order granting 

plaintiff's motion for summary judgment, he wrote,

[d]efendant also challenges [p]laintiff's standing to 

foreclose in this matter by challenging the [PSA]. A 

borrower, however, lacks standing to challenge a PSA 

because he is not a party to the PSA, nor can he 

demonstrate that he is a third-party beneficiary of the 

PSA's terms. See Correia v. Deutsche Bank Nat'l Trust 
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Co., 452 B.R. 319, 324 (1st Cir. B.A.P. 2011) 

("[d]ebtors lack[] standing to challenge the mortgage's 

chain of title under the PSA"). Furthermore, there is no 

evidence that [d]efendant was an intended third-party 

beneficiary of the PSA. As such, the alleged 

deficiencies in the PSA are irrelevant to [p]laintiff's 

standing to bring this foreclosure action. Therefore,

[p]laintiff has standing to bring this action.

Defendant is not a party to the PSA and he is not a beneficiary of its terms. We 

conclude therefore that he lacks standing to challenge the PSA. 

II.

We reject defendant's contention that Elbert's and Ward's affidavits were 

insufficient to prove ownership and possession of the note. Rule 4:64-2(c)(2) 

states that "the affiant shall confirm . . . that the affidavit is made based on a 

personal review of business records of the plaintiff or the plaintiff's mortgage 

loan servicer, which records are maintained in the regular course of business[.]"

If a motion is based on facts not appearing of record or 

not judicially noticeable, the court may hear it on 

affidavits made on personal knowledge, setting forth 

only facts which are admissible in evidence to which 

the affiant is competent to testify and which may have 

annexed thereto certified copies of all papers or parts 

thereof referred to therein.

[R. 1:6-6.]

The business records exception under N.J.R.E. 803(c)(6) states:
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A-1059-17T2

A statement contained in a writing or other record of 

acts, events, conditions, and, subject to Rule 808, 

opinions or diagnoses, made at or near the time of 

observation by a person with actual knowledge or from 

information supplied by such a person, if the writing or 

other record was made in the regular course of business 

and it was the regular practice of that business to make 

it, unless the sources of information or the method, 

purpose or circumstances of preparation indicate that it 

is not trustworthy.

The "general acceptance of reliability will not attach if 'the trial court, after 

examining . . . [the records] and hearing the manner of their preparation 

explained, entertains serious doubt as to whether they are dependable or worthy 

of confidence.'" State v. Matulewicz, 101 N.J. 27, 30 (1985) (second alteration 

in original) (quoting Mahoney v. Minsky, 39 N.J. 208, 218 (1963)).

Rule 4:64-2(d) states:

Plaintiff's counsel shall annex to every motion to enter 

judgment in a residential mortgage foreclosure action 

an affidavit of diligent inquiry stating: (1) that the 

attorney has communicated with an employee or 

employees of the plaintiff or of the plaintiff's mortgage 

loan servicer who (A) personally reviewed the affidavit 

of amount due and the original or true copy of the note, 

mortgage and recorded assignments, if any, being 

submitted and (B) confirmed their accuracy; (2) the 

date and mode of communication employed; (3) the 

name(s), title(s) and responsibilities in those titles of 

the plaintiff's employee(s) or the employee(s) of the 

plaintiff's mortgage loan servicer with whom the 

attorney communicated pursuant to this rule; and (4) 
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that the aforesaid documents comport with the 

requirements of [Rule] 1:4-8(a).

In his order granting summary judgment to plaintiff, the judge wrote:

Here, Michael Ward, an employee of the loan 

servicer, swore to having access to [p]laintiff's business 

records, and to reviewing those records. Sorell Elbert, 

an employee of the [p]laintiff, swore to the same.

Defendant has not offered any evidence of the falsity of 

Mr. Ward's or Ms. Elbert's affidavits, even after the 

court granted [d]efendant permission to depose Ms. 

Elbert. . . . Contrary to [d]efendant's opinion, and 

explained above, N.J.R.E. 803(c)(6)'s business records 

exception allows an individual to certify to the 

information found in certain business documents as the 

documents are held in the ordinary course of business

and as long as that individual has reviewed those 

documents. That is the exact scenario here. Thus, Mr. 

Ward's and Ms. Elbert's affidavits are admissible.

N.J.R.E. 902(h) governs "self-authentication" and states that extrinsic 

evidence of authenticity as a condition precedent to admissibility is not 

necessary for "[d]ocuments accompanied by a certificate of acknowledgment 

executed in the manner provided by law by a notary public or other officer 

authorized by law to take acknowledgments." The same is true for certified 

copies of public records. See N.J.R.E. 902(d).

To acknowledge a deed or other instrument made on 

behalf of a corporation or other entity, the maker shall 

appear before an officer specified in [N.J.S.A.] 46:14-

6.1 and state that the maker was authorized to execute 
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A-1059-17T2

the instrument on behalf of the entity and that the maker 

executed the instrument as the act of the entity.

[N.J.S.A. 46:14-2.1(a).]

Notary publics are "[o]fficers authorized to take acknowledgments" under 

N.J.S.A. 46:14-6.1. The plain language of N.J.R.E. 902(h) and N.J.S.A. 46:14-

2.1(a) rebuts the allegation that extrinsic proof is necessary. 

III.

"The only material issues in a foreclosure proceeding are the validity of 

the mortgage, the amount of the indebtedness, and the right of the mortgagee to 

resort to the mortgaged premises." Great Falls Bank v. Pardo, 263 N.J. Super. 

388, 394 (Ch. Div. 1993), aff'd, 273 N.J. Super. 542 (App. Div. 1994). "[E]ither 

possession of the note or an assignment of the mortgage that predated the 

original complaint confer[s] standing." Deutsche Bank Tr. Co. Ams. v. Angeles, 

428 N.J. Super. 315, 318 (App. Div. 2012). If a plaintiff cannot establish that it 

owned or controlled the underlying debt at the time the complaint is filed, it 

"lacks standing . . . and the complaint must be dismissed." Wells Fargo Bank, 

N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div. 2011). "If a debt is evidenced 

by a negotiable instrument, such as the note executed by [a] defendant," whether 

a plaintiff has established ownership or control over the note "is governed by 
10 A-1059-17T2

Article III of the Uniform Commercial Code (UCC), N.J.S.A. 12A:3-101 to -

605, in particular N.J.S.A. 12A:3-301." Ibid.

There are "three categories of persons entitled to enforce negotiable 

instruments" as described in N.J.S.A. 12A:3-301. Deutsche Bank Nat'l Tr. Co. 

v. Mitchell, 422 N.J. Super. 214, 222-23 (App. Div. 2011). N.J.S.A. 12A:3-301 

provides:

"Person entitled to enforce" an instrument means the 

holder of the instrument, a nonholder in possession of 

the instrument who has the rights of a holder, or a 

person not in possession of the instrument who is 

entitled to enforce the instrument pursuant to [N.J.S.A.] 

12A:3-309 or subsection d. of [N.J.S.A.] 12A:3-418. A 

person may be a person entitled to enforce the 

instrument even though the person is not the owner of 

the instrument or is in wrongful possession of the 

instrument.

N.J.S.A. 46:9-9 states that,

All mortgages on real estate in this State, and all 

covenants and stipulations therein contained, shall be 

assignable at law by writing, whether sealed or not, and 

any such assignment shall pass and convey the estate of 

the assignor in the mortgaged premises, and the 

assignee may sue thereon in his own name[.]

To show its status as an assignee, a plaintiff must "present[] an authenticated 

assignment indicating that it was assigned the note before it filed the original 

complaint." Mitchell, 422 N.J. Super. at 225.
11 A-1059-17T2

N.J.S.A. 46:18-13(a) states that "[o]nly the established holder of a 

mortgage shall take action to foreclose a mortgage." An entity is the 

"established holder of a mortgage" if that entity is: (1) "the record holder of the 

mortgage as established by the latest record of assignment or by the original 

mortgage recording in the records of the county clerk or the register of deeds 

and mortgages, as appropriate to the county in which the mortgaged property is 

located"; or (2) "found to be the holder of the mortgage in a civil action joining 

as defendants the record holder of the mortgage, the mortgagor, and any other 

person known to have an interest in the mortgage." N.J.S.A. 46:18-13(b).

Here, plaintiff presented a Certification and Business Records from Elbert 

regarding the receipt of the Note, and produced the original note in court. 

Plaintiff claims that the loan was transferred on September 28, 2010, when 

MERS, as Nominee for Chevy Chase Bank, executed an Assignment of 

Mortgage to U.S. Bank, N.A., as Trustee relating to the Chevy Chase Funding, 

LLC, Mortgage-Backed Certificates, Series 2005-3. This Assignment of 

Mortgage was recorded in the Bergen County Clerk's Office on October 15, 

2010. Thus, plaintiff claims that as of October 15, 2010, it had standing to bring 

a foreclosure action. Further, plaintiff argues that Elbert and Ward certified that

plaintiff possessed the note before the Complaint was filed. It claims that Elbert 
12 A-1059-17T2

received and stored the original note on September 1, 2005. Thus, it also claims 

that it is the holder of the note under N.J.S.A. 12A:3-301. As both the record 

holder and as the party in physical possession of the note, we conclude that

plaintiff had standing to file a foreclosure action against defendant.

IV.

Lastly, we turn to defendant's contention that the judge erred by granting 

plaintiff's motion for summary judgment. When reviewing an order granting 

summary judgment, we apply "the same standard governing the trial court 

. . . ." Oyola v. Xing Lan Liu, 431 N.J. Super. 493, 497 (App. Div. 2013). A 

court should grant summary judgment when the record reveals "no genuine issue 

as to any material fact" and "the moving party is entitled to a judgment or order 

as a matter of law." R. 4:46-2(c). We therefore consider the facts in a light most 

favorable to the non-moving party. Brill v. Guardian Life Ins. Co. of Am., 142 

N.J. 520, 523 (1995).

Defendant alleges that he set forth a prima facie case of predatory lending 

under the New Jersey Consumer Fraud Act (NJCFA), N.J.S.A. 56:8-1 to -210. 

While there is no precise definition ascribed to the concept of "predatory 

lending," it has been described as

a mismatch between the needs and capacity of the 

borrower. . . . In essence, the loan does not fit the 
13 A-1059-17T2

borrower, either because the borrower's underlying 

needs for the loan are not being met or the terms of the 

loan are so disadvantageous to that particular borrower 

that there is little likelihood that the borrower has the 

capability to repay the loan.

[Assocs. Home Equity Servs., Inc. v. Troup, 343 N.J. 

Super. 254, 267 (App. Div. 2001) (alteration in 

original).]

N.J.S.A. 56:8-2 states:

The act, use or employment by any person of any 

unconscionable commercial practice, deception, fraud, 

false pretense, false promise, misrepresentation, or the 

knowing, concealment, suppression, or omission of any 

material fact with intent that others rely upon such 

concealment, suppression or omission, in connection 

with the sale or advertisement of any merchandise or 

real estate, or with the subsequent performance of such 

person as aforesaid, whether or not any person has in 

fact been misled, deceived or damaged thereby, is 

declared to be an unlawful practice[.]

To state a claim under the NJCFA, a plaintiff must allege (1) "unlawful conduct 

by defendant;" (2) "an ascertainable loss by plaintiff;" and (3) "a causal 

relationship between the unlawful conduct and the ascertainable loss." 

D'Agostino v. Maldonado, 216 N.J. 168, 184 (2013). We have previously 

explained that a negatively amortized adjustable rate mortgage loan is not a per 

se predatory loan. See Rosenberg v. Washington Mut. Bank, FA, 369 N.J. 

Super. 456, 465-66 (App. Div. 2004).
14 A-1059-17T2

Here, the judge noted that while defendant had an annual income of 

$80,000 – not a monthly income of $40,000 as the loan application stated –

defendant also had monthly expenses of $15,000 and made payments on the loan 

for over three years. Thus, the judge found no fraud in the execution of the loan. 

In his certification, defendant stated, "I fell behind on my mortgage payment 

because of a decline in the economy and loss of customers for my consulting 

business." Defendant also supplemented his income on the loan application with

a letter from his CPA explaining that if defendant "uses funds from the business 

for the new purchase . . . it will not adversely effect his business." "[P]ublic 

policy does not impose upon the Bank absolute liability for the hardships which 

may befall the business venture it finances." See, e.g., Globe Motor Car Co. v. 

First Fid. Bank, N.A., 273 N.J. Super. 388, 394 (Law Div. 1993); see also Pereira 

v. United Jersey Bank, N.A., 201 B.R. 644, 670 (S.D.N.Y. 1996).

Defendant claims that he is not fluent in English. But at his deposition, 

defendant spoke and read English without an interpreter. Further, as the judge 

explained, defendant received and signed copies of a Truth in Lending 

Disclosure Statement, an Adjustable Rate Mortgage Disclosure, and a Consumer 

Handbook on Adjustable Rate Mortgages, which were all in English. Defendant
15 A-1059-17T2

also had legal representation throughout the loan transaction and admitted to 

willfully disregarding documents related to the loan.

Affirmed.