Court Opinion

ID: 4091841
Source: CourtListenerOpinion
Date Created: 2016-10-22 00:11:48.173746+00
Date Added: 2024-06-11T14:36:26.201063
License: Public Domain

J-A19037-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

FANNIE MAE, FEDERAL NATIONAL                      IN THE SUPERIOR COURT OF
MORTGAGE ASSOCIATION                                    PENNSYLVANIA

                          v.

JEFFREY F. KRATZ AND MARGUERITE F.
KRATZ

APPEAL OF: JEFFREY F. KRATZ
                                                      No. 1534 EDA 2014

                  Appeal from the Order Entered May 5, 2014
       in the Court of Common Pleas of Montgomery County Civil Division
                            at No(s): 2011-25916

BEFORE: FORD ELLIOTT, P.J.E., OTT, and FITZGERALD,* JJ.

JUDGMENT ORDER BY FITZGERALD, J.:                  FILED OCTOBER 21, 2016

        Appellant, Jeffrey F. Kratz, appeals from the order granting summary

judgment in favor of Appellee, Fannie Mae, Federal National Mortgage

Association, in this mortgage foreclosure action. Appellant contends (1) that

because the United States government “bailed out” the banks, he owes no

money under the mortgage; (2) every assignment of Appellant’s mortgage

was defective and thus the mortgage was never properly transferred from

the original holder; and (3) thus, Appellee lacks standing to bring suit

because it is not the owner and holder of the mortgage. We affirm.

        We adopt the facts and procedural history set forth in the trial court’s

opinion.1 See Trial Ct. Op., 6/23/15, at 2-7. Appellant timely appealed and

*
    Former Justice specially assigned to the Superior Court.
J-A19037-16

timely filed a court-ordered Pa.R.A.P. 1925(b) statement. Appellant raises

the following issue: “Have the pleadings and discovery of [Appellant] shown

that there is a genuine issue as to material facts and that [Appellee] is not

entitled to a judgment as a matter of law pursuant to Pa.R.C.P. 1035.2.”

Appellant’s Brief at 7.

      In support of his issue, Appellant raises three arguments.           First,

because the United States government “bailed out” Wall Street and the

banks, Appellee has been paid-in-full and Appellant owes no money.            In

support of this argument, Appellants generally refers this Court to a fifty-six

page expert report and cites no law. Second, Appellant states that all the

assignments were invalid because the assignments were not executed by the

“appropriate officers of the bank involved in the actual assignments of the

note and mortgage.” Appellant’s Brief at 18. Appellant cites no law for this

proposition, either.      Lastly, citing a single trial court opinion, Appellant

opines that because the assignments were invalid, Appellee lacks standing to

bring suit. Id. at 16. We affirm.

      We adhere to the following standard of review:

           We view the record in the light most favorable to the
         nonmoving party, and all doubts as to the existence of a
         genuine issue of material fact must be resolved against the
         moving party. Only where there is no genuine issue as to
         any material fact and it is clear that the moving party is

1
  We note this appeal was stayed when Appellant filed for bankruptcy. The
stay was lifted on April 18, 2016. Order, 4/18/16.

                                       -2-
J-A19037-16

        entitled to a judgment as a matter of law will summary
        judgment be entered. Our scope of review of a trial
        court's order granting or denying summary judgment is
        plenary, and our standard of review is clear: the trial
        court's order will be reversed only where it is established
        that the court committed an error of law or abused its
        discretion.

NASDAQ OMX PHLX, Inc. v. PennMont Secs., 52 A.3d 296, 303 (Pa.

Super. 2012) (citation omitted).

     When a party cites no legal authority in support of its claim, the claim

is waived. Commonwealth v. Natividad, 938 A.2d 310, 340 (Pa. 2007);

Commonwealth v. Jette, 947 A.2d 202, 205 (Pa. Super. 2008) (same).

Instantly, Appellant cites no law for the propositions that because Appellee

was “bailed out” by the federal government, Appellant owes nothing for the

mortgage and the assignments were invalid.      Because Appellant cites no

legal authority, he has waived his claims. See Natividad, 938 A.2d at 340;

Jette, 947 A.2d at 205. Appellant’s third argument derives from his second

argument.   Because Appellant has waived his claim that the assignments

were invalid, Appellant cannot establish his derivative claim that Appellee

lacks standing. Accordingly, we affirm.

     Order affirmed.

                                    -3-
J-A19037-16

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 10/21/2016

                          -4-
                                                                                      Circulated 09/29/2016 11:20 AM

         THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY,
                           PENNSYLVANIA
                         CIVIL ACTION - LAW

    FEDERAL NATIONALMORTGAGE                                SUPERIOR COURT
    ASSOCIATION                                             NO. 1534 EDA 2014
                                                            NO. 1545 EDA 2014
                 v.                                         CONSOLIDATED

    MARGUERITE KRATZ
    and JEFFREY KRATZ                                       TRIAL COURT
    a/k/a JEFFREY F. KRATZ                                  NO. 2011-25916

    ROGERS, J.                                              JUNE 23, 2015

                                       OPINION

    I.   INTRODUCTION

         Appellant    Marguerite   Kratz   and    Appellant           Jeffrey          Kratz          (jointly

"Appellants") have appealed to the Superior Court of Pennsylvania ("Superior

Court"] from this court's order dated and docketed on May 6, 2014, granting

Federal National Mortgage Association's!          ("Appellee") motion for summary

judgment.      For the reasons     set forth below, the undersigned                         respectfully

requests that the Superior Court affirm the judgment in rem.

I
   Federal National Mortgage Association is also sometimes referred to as "Fannie Mae" in
the record.

                                                 111 ~~f~t'J~IJll 1
                                                 201 l-25916.0069 6·23'2015 l0:42 A,\I
                                                                        Opinion
                                                                                            #    10351206

                                                 RcptrlZ2441845 F~:so.oo
                                                           Xlark Levy - :-.!ontCo Prothonotary
    II.    FACTUAL AND PROCEDURAL HISTORY

           The relevant facts and procedural history underlying this appeal are as

    follows. On November 27, 2002, Jeffrey Kratz executed a promissory note

    ("note") in the amount of $169,800.00           and mortgage for property located at

    415 East Broad Street, Souderton, Pennsylvania ("property"), as security for

    the sums due under the note to Financial Mortgage Corporation.               (Motion for

    Summary         Judgment,    filed 7 /24 / 13, Exhibit B (substituted     on 10/28/ 13)

and Exhibit C).          On the same day, Financial Mortgage Corporation assigned

the Mortgage to First Horizon Home Loan Corporation.                    (Id. at Exhibit D).

First Horizon had the mortgage assignment recorded on December 12, 2002.

(Id.).     On November 14, 2008, Jeffrey Kratz executed a deed which conveyed

title to the property            to himself and Marguerite       Kratz as tenants     by the

entireties.?         (Id. at Exhibit E). First Horizon Home Loans, a division of First

Tennessee Bank National Association, as successor in interest by merger to

First Horizon Home Loan Corporation,                assigned     the Mortgage on June 3,

2010,       to      Mortgage Electronic     Registration    Systems,   Inc.   ("MERS") as

nominee for First Horizon Home Loans. (Id. at Exhibit F). The Montgomery

County Recorder of Deeds recorded the Assignment of Mortgage on July 28,

2010.      (Id.).

           Appellants failed to make their monthly payments due on the first of

the       month      beginning    with   the payment       due   on September      1, 2010.

2
   Counsel for Jeffrey Kratz, Gerald M. Barr, Esquire, prepared the deed to transfer ownership
"from Husband to Husband and Wife" which Jeffrey Kratz executed on November 14, 2008,
and recorded on the same day. (Motion for Summary Judgment, Exhibit E).
                                                2
(Amended Complaint in Mortgage Foreclosure,                          filed 5/21/ 12, at    ,r     9).     On

August 30, 2011, MERS, as nominee for First Horizon Home Loans, assigned

the mortgage to Appellee.                   (Motion for Summary            Judgment,      Exhibit G).

Appellee recorded the mortgage assignment                          on September    6, 2011.             (Id.).

Appellee sent         the proper          notices     of intent      to foreclose to Appellants.

(Amended Complaint             at    ,r   11; Jeffrey Kratz Answer, filed 6/21 / 12).                     On

September         15, 2011, Appellee filed a complaint                    in mortgage foreclosure.

Appellants each filed preliminary                   objections.      On May 21, 2012, Appellee

filed an amended           complaint        alleging that Appellants were in default and

seeking $172,064.32           in principal, interest, attorney's fees and other charges.

(Amended Complaint at           ,r   10).

      In response, Jeffrey Kratz did not deny his failure to make payments.

Rather,    Appellant        baldly claimed that            the mortgage was not in default

because the original lender and owner of the mortgage had been paid in full

by virtue of the "massive United States Government bailout of Wall Street

and the Banks and/ or a payment received under the well-publicized "Credit

Default    Swaps"         Insurance       Agreements       in place covering        the    mortgage

derivative market;"          (Jeffrey F. Kratz's Answer, filed 6/21/ 12, at                ,r,r    9, 10;

Jeffrey F. Kratz's Answers                to [Appellee's] Request           for Admissions,             filed

4/11/13,     at    ,r,r   1-3, 6; Motion for Summary                  Judgment,    filed 7/24/13,

Exhibit    R).     In his new matter,                Jeffrey      Kratz alleged   that    all of the

assignments       had been fraudulently signed by "Robo-Signers" and that MERS

could not have legally held an ownership                       interest    to assign.     (Jeffrey F.

                                                      3
Kratz's New Matter at ,i,i 13-18).              Jeffrey Kratz also filed a counterclaim

seeking damages for fraud and wrongful misconduct                   in bringing the action

in mortgage        foreclosure    which allegedly resulted        in great financial    and

physical harm.       (Id.).

         For her part,        Marguerite Kratz either admitted        or generally denied

Appellee's averments in her answer.              (Answer and New Matter of Marguerite

Kratz,     filed 6/22/ 12).         In   her    new   matter,    Appellant   claimed   that

unbeknownst        to her, Jeffrey Kratz had tricked her into signing a consent to

divorce in 2001.       According to Appellant, the parties remarried in November

of 2008 and, thereafter,           Jeffrey Kratz deeded the property          over to both

Appellants.       Marguerite Kratz challenged the validity of the mortgage based

upon "the divorce improperly obtained by [Appellant] Jeffrey F. Kratz." (Id.

at ,i,i 15-24).

         Appellee filed preliminary objections to Jeffrey Kratz's counterclaim on

July     11, 2012.        Following oral argument,         the undersigned       sustained

Appellee's preliminary objections by order dated September                   19, 2012, and

dismissed     Jeffrey Kratz's counterclaim.           Jeffrey Kratz filed a motion for

reconsideration      and a separate       application for determination       of finality of

order on October 10, 2012.           This court denied Appellant's requests by order

docketed    on October 22, 2012.               The Superior     Court denied Appellant's

petition for review per curiam. on December 26, 2012, and the Pennsylvania

Supreme Court denied his petition for review per curiam. on July 11, 2013.

                                                4
       On July 24, 2013, Appellee filed a motion for summary judgment,

seeking judgment      in rem against Appellants.   Appellee attached as exhibits

to the motion      copies   of documents,    including   the:     1) recorded   deed

conferring title to the property solely to Jeffrey Kratz, dated November 27,

2002, 2) Note executed by Jeffrey Kratz on November 27, 2002, 3) Mortgage

executed by Jeffrey Kratz on November 27, 2002, 4) Assignment of Mortgage

recorded on December 12, 2002, 5) Deed conferring title to the property to

both Appellants executed on November 14, 2008, 6) Assignment of Mortgage

recorded July 28, 2010, 7) Assignment of Mortgage recorded on September

6, 2011, 8) Notice of Intention to Foreclose to Marguerite Kratz, 9) Notice of

Intention to Foreclose to Jeffrey Kratz, 10) Requests for Admissions sent to

both Appellants,   11) Marguerite Kratz's Answers signed April 2, 2013, 12)

Jeffrey Kratz's Answers signed April 9, 2013, and 13) an Affidavit by Lisa

Lubbess, a Foreclosure Specialist at Seterus,      Inc., the mortgage servicing

agent for Appellee.

      Jeffrey Kratz filed an answer to the motion for summary judgment           on

August 23, 2013.      Therein, Appellant argued that 1) MERS is not an entity

which may receive assignment      or assign a mortgage, 2) the Affidavit by Lisa

Lubbess failed to establish any default, and 3) the motion was premature         as

Appellant had not had the opportunity to pursue discovery. The court held

argument   on Appellee's motion on October 28, 2013.            Based upon Jeffrey

Kratz's claim that he needed       more time for discovery,       the undersigned

deferred his decision and scheduled reargument      for February 4, 2014.       The

                                        5
undersigned     continued reargument        twice at the request of Counsel.     In the

meantime,      Appellee filed an Acknowledgment           executed   by Jeffrey Kratz's

Counsel acknowledging that Counsel "reviewed and inspected                 the original

Promissory Note of November 27, 2002 and original Mortgage of the same

date at the offices of [Appellee's Counsel]". In addition, Jeffrey Kratz filed a

supplemental     memorandum       of law on February 25, 2014 with the following

exhibits:    1) a copy of the original Note dated November 27, 2002, along with

an endorsement      page marked "original" and a Note Allonge listing the payee

as "[Appellee] by Seterus" as well as the original Mortgage, 2) a report signed

by Richard      M. Kahn,      a principal    of and    Mortgage Foreclosure      Fraud

Examiner for Forensic Professionals          Group USA, Inc. and 3) a deposition

transcript    of the testimony of Roger Meadows, a corporate litigation officer

for Seterus as servicer of loans for Fannie Mae.

        On April 25, 2014, the undersigned            held reargument    on Appellee's

motion for summary judgment.         Appellee's Counsel brought the original note

and original mortgage for inspection by the court.          Instead, the undersigned

noted Jeffrey Kratz's Counsel's confirmation           that the documents     were, in

fact, the originals.    Following a thorough       review of the record, the court

granted Appellee's motion on May 6, 2014, and entered judgment                in rem in

the amount of $205,256.19       together with interest.

        Jeffrey Kratz filed a notice of appeal to the Superior Court on May 13,

2014.       The undersigned     issued   an order on May 16, 2014,            directing

Appellant to file a Concise Statement of the Errors Complained of on Appeal

                                            6
("concise statement").     Marguerite   Kratz filed a notice of appeal        to the

Superior Court on May 22, 2014.         The undersigned   issued an order dated

May 29, 2014, directing Appellant to file her concise statement.           Jeffrey

Kratz filed a concise statement    on June 3, 2014, and Marguerite Kratz filed

her concise statement    on June    18, 2014.   The Superior Court sua sponte

consolidated the appeals by per curiam. order entered on June 10, 2014.

III.   ISSUES

       Jeffrey Kratz raises the following issues on appeal:

       1.    The Order of the Honorable Thomas P. Rogers dated May
       6, 2014 provides no reason why Judge Rogers granted Plaintiff's
       Motion for Summary Judgment.        A copy of Judge Rogers [sic]
       Order is attached hereto as Exhibit "A".

       2.     A Motion for Summary Judgment is available only where
       the Pleadings, Depositions, Answers to Interrogatories          and
       Admissions on file together with the Affidavits, if any, show there
       is no genuine issue as to any material fact and the moving party
       is entitled to a judgment as a matter of law. Pa.R.Civ. (sic] P.
       Rule 1035(b).

       3.     An uncontradicted    Affidavit of the moving party or its
       witness will not support a grant of Summary Judgment because
       of the factual issue the Affidavit raises concerning the credibility
       of its maker. Godlewski v. Pars Manufacturing Company [sic]
       408 Superior Court 425 [sic] 597 A.2nd 106 (1991).

       4.     The Honorable Thomas P. Rogers erred in determining
       that there were no genuine issues of material fact. The following
       material facts are at issue:

             a.    The Note upon which Plaintiff is suing was never
       properly transferred  from the original holder of the Note,
       Financial Mortgage Corporation to First Horizon Home Loans.

              b.   Each transfer and assignment thereafter was also
       deficient in some manner and therefore, Federal National
       Mortgage Association has no standing to bring the within
                                        7
       Foreclosure Action because they are not the true owner or
       holder of the original mortgage or note.

             c.     Plaintiff relies on an "Affidavit in Support of
      Plaintiff's Motion for Summary Judgment" allegedly executed by
      Lisa Lubbess. An uncontradicted Affidavit of the moving party
      or its witness will not support a grant of Summary Judgment.

            d.    Plaintiff has been unable    to produce   the original
      assignments of the Note.

             e.    One of the assignees of the Note was MERS which
      Plaintiff's witness admitted in his Deposition that MERS was
      never an owner or a holder of the mortgage or note. Therefore,
      said assignment was invalid.

             f.     The Honorable Thomas P. Rogers failed to address
      Plaintiff's ownership and possession of the Note as a prerequisite
      in the Foreclosure Action.

             g.   The Honorable Thomas P. Rogers erred by granting
      Plaintiff's Motion for Summary Judgment           when Plaintiff
      produced no evidence that it is the proper Holder of the Note.

      5.     The Honorable Thomas P. Rogers erred in determining
      that the Plaintiff has standing to pursue the within action.

{Jeffrey Kratz's concise statement   filed June 3, 2014, at Docket No. 1534

EDA 2014).

      Marguerite Kratz raises the following issues on appeal:

      1.     Judge Rogers has filed no opinion nor provided reasons
      for the Order of May 6, 2014, the Appeal of which is the matter
      at issue.   A true and correct copy of said Order is attached
      hereto as Exhibit "A".

     2.     Summary Judgment is proper only when the pleadings
     and discovery show there is no genuine issue as to any material
     fact and the moving party is entitled to a judgment as a matter
     of law. Pa.R.C.P. No. 1035.2.

     3.    In granting a summary judgment the Court must examine
     the record in a light most favorable to the non-moving party. In

                                      8
       re: Estate of Shelly, 2008 Pa. Super. 116, 950 A.2d 1021
       (2008).

      4.     Defendant, Marguerite Kratz, alleged in her New Matter
      that Defendant, Jeffrey Kratz obtained a divorce from her in
      2001 by wrongfully taking advantage of her mental status
      condition at the time in question.

      5.     The Plaintiff in its general denial of said allegations and in
      its Memorandum of Law in support of its Motion for Summary
      Judgment,    has apparently conceded the accuracy of those
      allegations, while disputing the legal significance thereof. To the
      extent the Plaintiff did not so concede, a genuine issue of
      material fact exists relating to this question.

      6.     The Honorable Thomas P. Rogers in granting the Motion
      for Summary Judgment         filed by the Plaintiff against the
      Defendant, Marguerite Kratz, has erred in ruling that the
      circumstances surrounding the Defendants' marital status were
      not significant to the mortgage foreclosure action.

      7.     The Honorable Thomas P. Rogers has also erred in failing
      to exercise the equitable powers of the Court to promote
      economic justice on behalf of the Defendant, Marguerite Kratz,
      by sanctioning the conduct of Defendant, Jeffrey Kratz in
      obtaining a divorce by fraudulent means. This allowed him to
      use marital assets to acquire the property in question and, in
      turn, to lien said property without the joinder of Defendant,
      Marguerite Kratz. The mortgage foreclosure will result in a loss
      to Marguerite Kratz of what should have been marital property
      as defined in 23 Pa.C.S.A. Sec. 3501(a).

      8.     The Honorable Thomas P. Roger]s] erred in failing to allow
      Marguerite Kratz the opportunity to prove that the Mortgage in
      question should be revoked as it affects and applies to her
      interest in the property in question.

      9.     Defendant, Marguerite Kratz hereby reserves the right to
      file additional matters complained of when the Honorable
      Thomas P. Rogers issues his opinion in support of his Order
      granting the Motion for Summary Judgment.

(Marguerite Kratz's concise statement       filed June   18, 2014, at Docket No.

1545 EDA 2014).

                                        9
 IV.       DISCUSSION

           Appellants assert that the court erred in granting summary judgment,

 albeit     for different   reasons.    First, Jeffrey   Kratz sets    forth two basic

 arguments:        1) Appellee lacked standing     to bring this action in mortgage

 foreclosure because of the improper or deficient transfer and assignment             of

 the Mortgage and Note and 2) Appellee improperly relied on the Affidavit of

 Lisa Lubbess in support of its motion.         Second, Marguerite Kratz insists that

 genuine issues regarding material facts remain regarding her marital status

 which precluded summary judgment.           Appellants are both mistaken.

          Preliminarily, the applicable standards     on review of an order granting

summary judgment            are as follows. Summary judgment      is appropriate   only

where there is no genuine issue of material fact and it is clear that the

moving party is entitled to judgment        as a matter of law. 401 Fourth Street,

Inc. v. Investors Insurance Group, 583 Pa. 445, 461 n.4, 879 A.2d 166, 175

n.4 (2005) (citing Pa.R.C.P. 1035.2(1)); PHH Mortgage Corporation v. Powell,

100 A.3d 611, 616 (Pa.Super. 2014).          Summary judgment         is also "proper in

cases in which an adverse party who will bear the burden of proof at trial

has failed to produce         evidence of facts essential   to a cause of action or

defense in which a jury trial would require the issues to be submitted             to a

jury."    401 Fourth Street, supra (citing Pa.R.C.P. 1035.2(2)).

          In considering the merits of a motion for summary judgment, a
          court views the record in the light most favorable to the non-
          moving party, and all doubts as to the existence of a genuine
          issue of material fact must be resolved against the moving party.
          In considering whether there exists a genuine issue of material
          fact, the court does not weigh the evidence, but determines
                                           10
       whether a reasonable      jury, faced with the evidence presented,
       could return a verdict   for the non-moving party ....  [T]he court
       may grant summary         judgment only when the right to such
       judgment is clear and    free from doubt.

401 Fourth Street, supra (citations omitted).

       Although the moving party bears the initial burden of establishing the

absence of a genuine issue of material fact, the adverse party may not rest

upon mere allegations or denials in the pleadings to defeat the motion for

summary judgment.        Nordi u. Keystone Health Plan West, Inc., 989 A.2d 376,

379 (Pa.Super. 2010). Rather, the nonmoving party must produce evidence

of specific material facts demonstrating     a genuine issue for trial.   Bank of

America, N.A. v. Gibson, 102 A.3d 462, 464 (Pa.Super. 2014) (citing Pa.R.C.P.

1035.3); Nordi, supra.     Failure of the nonmoving party to adduce sufficient

evidence on an issue essential to his case or defense establishes     the moving

party's entitlement   to judgment   as a matter of law. JP Morgan Chase Bank,

N.A. v. Murray, 63 A.3d 1258, 1261 (Pa.Super. 2013); Nordi, supra.            "[A)

factual issue is considered 'material' for summary judgment       purposes   if its

resolution   could affect the outcome of the case under the governing law."

Strine v. Commonwealth,       586 Pa. 395, 402, 894 A.2d 733, 738 (2006)

(citation omitted).

      The governing law provides that an action in mortgage foreclosure is

strictly an in rem proceeding, and its purpose is solely to effectuate a judicial

sale of the mortgaged property.     First Wisconsin Trust Company v. Strausser,

653 A.2d 688, 693 n.4 (Pa.Super. 1995) (citing New York Guardian Mortgage

                                        11
 Corporation v. Dietzel, 524 A.2d 951, 953 (Pa.Super.    1987).   The Gibson

Court recently explained as follows:

      The holder of a mortgage has the right, upon default, to bring a
      foreclosure action. Cunningham v. McWilliams, 714 A.2d 1054,
       1056-57 (Pa.Super. 1998). The holder of a mortgage is entitled
      to summary judgment if the mortgagor admits that the mortgage
      is in default, the mortgagor has failed to pay on the obligation,
      and the recorded mortgage is in the specified amount. Id.
Gibson, supra at 464-65.

      "Under the Pennsylvania   Uniform Commercial Code (PUCC), the note

securing a mortgage is a negotiable instrument."   Id. at 466 (citing Murray,

supra).   "A note endorsed in blank is a 'bearer note/ payable to anyone on

demand regardless of who previously held the note."            Id. (citing 13

Pa.C.S.A. §§ 3109(a), 3301) (emphasis added). In addition,

      [the Superior] Court has held that the mortgagee is the real
      party in interest in a foreclosure action. Wells Fargo Bank, N.A.
      v. Lupori, 8 A.3d 919, 922 (Pa.Super. 2010) (quoting US Bank
      N.A. v. Mallory, 982 A.2d 986, 994 (Pa.Super. 2009)). Section
      3301 of the PUCC provides that a holder of a negotiable
      instrument is a "person entitled to enforce" it. 13 Pa.C.S.A. §
      3301 ( 1). Section 3302 defines a "holder in due course" of a
      negotiable instrument as the holder of an instrument if "the
      instrument when issued or negotiated to the holder does not
      bear such apparent evidence of forgery or alteration or is not
      otherwise so irregular or incomplete as to call into question its
      authenticity;" and the holder took the instrument for value and
      in good faith. Id. § 3302(a). Finally, Section 1201 defines a
      "holder," in relevant part, as "the person in possession of a
      negotiable instrument that is payable either to the bearer or to
      an identified person that is the person in possession." Id. §
      1201 (b)(21)(i).

Powell, supra at 619-20.

                                       12
          Instantly,   Jeffrey    Kratz challenges   the chain     of assignment         and

 transfer of the mortgage and note in this matter.            More important,   however,

 is what he does not challenge.           Appellant does not dispute that Appellee is

 the holder of the original mortgage and note.                (See Acknowledgment         of

Inspection of Original Documents,           filed 4/25/ 14). The record in this case

clearly shows that Appellee holds the original note and original mortgage

indorsed in blank and Note Allonge and, therefore, has standing to bring this

action.    Accordingly, Appellant's challenge to Appellee's standing based upon

the chain of assignment must fail. See Gibson, supra; Powell, supra; Murray,

supra.

         In his second issue on appeal, Jeffrey Kratz complains that the court

erred in considering the Affidavit of Lisa Lubbess that Appellee submitted in

support of its motion for summary judgment.              Appellant's second claim is

also unavailing.

         Pennsylvania     law disfavors trial by affidavit.    Murray, supra at 1267.

Testimonial      affidavits      by the   moving party   or its    witnesses,     even    if

uncontradicted,        will not support     the entry of summary       judgment     since

credibility remains       a matter for the jury.     Id.; see Nanty-Glo    v. American

Surety Company, 309 Pa. 236, 163 A. 523 (1932). An exception to this rule

exists, however, where the moving party uses the admissions of the opposing

party,    including    facts admitted     in the pleadings.     Gibson, supra at 466

(citations omitted).     Further, in mortgage foreclosure actions, general denials

                                             13
 constitute      admissions       where   specific denials     are required.      Id.    (citing

 Strausser, supra at 692; Pa.R.C.P. 1029{b),(c)).

        Instantly,      Lisa Lubbess, a Foreclosure Specialist with Seterus,               Inc.,

 the mortgage servicing agent for Appellee, provided the affidavit at issue.                  In

 the affidavit, Ms. Lubbess explained her credentials               and how the Seterus

 business records are kept.          (Motion for Summary Judgment,           Exhibit S). The

affidavit contains nine (9) paragraphs             of allegations based on the evidence,

the majority of which Appellants previously admitted in their answers to the

amended complaint or in response to Appellee's requests for admissions.                      In

this court's review, the only contested issue alleged in the affidavit is one of

default.      However, the contesting       on Appellant's part is by the assertion           of

unsupported        allegations.

       Specifically, Jeffrey Kratz has never denied that Appellants have failed

to make payments on the mortgage on or after September                    1, 2010.      Rather,

he claims        that   there is no default        because    the original lender       on his

mortgage and note has been paid off by the "government bailout" of certain

unnamed       banks.     Arguably, under the recent cases cited above, whether or

not the original lender has been paid off by anyone other than the borrower

is irrelevant.     Furthermore,      while a novel claim, the unsupported         allegation

does not create a genuine            issue of material       fact contrary   to Appellant's

protestations       otherwise.      The undersigned          properly   granted   summary

judgment.

                                              14
          Marguerite Kratz raises several claims that can be distilled into one.

 Appellant     alleges that her husband             Jeffrey Kratz took advantage          of her

 mental state in 2001 and wrongfully obtained a divorce. In 2008, after the

 couple remarried, Jeffrey Kratz executed a new deed on the property which

he alone had purchased           on November 27, 2002.              The new deed transferred

ownership       to Jeffrey F. Kratz and Marguerite                  Kratz as tenants     by the

entireties.     Had Jeffrey Kratz not fraudulently             obtained a divorce in 2001,

Marguerite      Kratz's signature        would have been required           on the note and

mortgage      in November 2008.            According to Marguerite           Kratz, the fraud

committed by Jeffrey Kratz renders the mortgage invalid.                     Appellant's claim

warrants no relief on appeal.

       The Superior Court addressed             an analogous          claim in Strausser, 653
A.2d at 692-93.            There, the appellant,         Strausser,     asserted   defenses    of

duress,      fraud   and     unjust    enrichment       resulting     from alleged     influence

brought to bear by the second mortgagor appellant, Perlberger, as the reason

the mortgage was invalid.              Specifically, Strausser        claimed Perlberger had

taken advantage       of her while the two were romantically                involved and had

«through manipulation,          fraud and deceit, pressured           her into purchasing     the

mortgaged      premises."        Id. at 692.        The Court         concluded    "Strausser's

allegations    of wrongdoing          [were) directed     at Perlberger     and not at [the

appellee].     Strausser's     affirmative defense, therefore,          [was] without merit."

Id. at 693.

                                               15
       Instantly, Marguerite Kratz's allegations of wrongdoing are directed at

 Jeffrey Kratz and not at Appellee. Accordingly, Appellant's claim lacks merit.

 Moreover, even were this court to consider          Marguerite Kratz's appeal to

exercise its equitable powers, Appellant did not provide a shred of evidence

in support of her allegations.     She may not rest upon mere allegations or

denials in her pleadings to defeat the motion for summary judgment.

      Appellants have produced no evidence which creates a genuine issue

of material fact. Thus, Appellee is entitled to judgment as a matter of law.

V.    CONCLUSION

      Based    upon    the   reasoning     set   forth   herein,   the   undersigned

respectfully requests that the Superior Court affirm the judgment         in rem.

                                         BY THE COURT:

                                         Court of Common P
                                         Montgomery County,
                                         Pennsylvania
                                         3gth Judicial District

A copy of the above Opinion was
sent to the following on 06/23/ 15:
By First~Class Mail:
Gerald M. Barr, Esquire, Counsel for Appellant,
      Jeffrey F. Kratz

                                         16
Douglas A. Gifford, Esquire, Counsel for Appellant,
      Marguerite Kratz
Andrew L. Markowitz, Esquire, Counsel for Appellee,
     Federal National Mortgage Association

                                   17