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Tran v. SN Servicing Corp.

United States District Court, E.D. Pennsylvania

April 19, 2018



          Ditter, J.

         In this case, the plaintiffs, Chuong Van Tran and Tuyet Hong Nguyen, [1] have filed an amended complaint seeking class certification for alleged violations of the Fair Debt Collections Practices Act (“FDCPA”), 16 U.S.C. § 1692 et seq. Plaintiffs contend defendant SN Servicing Corporation (SNS) violated the FDCPA by sending certain written notices of its intent to initiate foreclosure proceedings when MV051, LLC never intended to foreclose because it is a junior lienholder.

         In their first complaint, Plaintiffs also charged MV051, the holder of a second mortgage on their residence with the same violations. MV051 filed a counterclaim seeking foreclosure. On September 20, 2017, I entered a stipulation and order dismissing the FDCPA claims against MV051, but allowing it to pursue its counterclaim for foreclosure in this action.

         Before me is a motion for summary judgment filed by MV051 seeking foreclosure of Plaintiffs' residence. For the reasons that follow, this motion shall be granted.

         1. Factual background

         MV051 contends it is entitled to summary judgment based on the following assertions of uncontested facts.

         Plaintiffs purchased their home in Holland, Pennsylvania, in January 2005. They had a first mortgage on the property with GreenPoint Mortgage Funding, Inc., in the amount of $228, 000. On September 2, 2005, Plaintiffs obtained a second mortgage (the subject of this litigation) secured by a mortgage on the Holland property. A promissory note and mortgage were recorded on November 10, 2005, in the office of the Recorder of Deeds of Bucks County, Pennsylvania. The note indicates the mortgage was in amount of $100, 000, with an interest rate of 6.75%, and 180 payments were to be made in the amount or $885.07. Ans. and Counter Cl., Exh. A.

         This second mortgage has been reassigned several times. First, from Federal Deposit Insurance Corporation, in its capacity as receiver for Earthstar Bank to SFR Venture 2001-1, LLC; then to Mortgage Electronic Registration Systems, Inc.; and finally to MV051 on May 24, 2016. The original promissory note, mortgage, and the subsequent recorded assignments of the mortgage are attached as exhibits to the counterclaim. MV051 asserts Plaintiffs are in default, and at the time of the filing of the answer to the amended complaint and its counterclaim, Plaintiffs owed in excess of $80, 000, plus accruing interest, late fees, legal costs, and attorney's fees.

         Plaintiffs acknowledge in their amended complaint that they defaulted on the second mortgage “at some point after September of 2005” and “remained in default since January of 2012.” Am. Cmpl. ¶ 16. Mr. Tran's deposition testimony confirms that the mortgage is in default, that he hadn't made any payments since “last year, ” and that payment was returned to him. Mot. For Summ. Judg., Exh. 1, Tran Dep. at 31-32. Mr. Tran also testified that he did not know when he had made any payments before this last one or what the balance of the mortgage was, but he agreed it was approximately $75, 000. Id. at 32-33. Mrs. Nguyen confirmed her husband's testimony.

         Plaintiffs also acknowledge that they received notice from MV051, through its loan servicer, SNS, that their loan was in default. This notice is required under Pennsylvania law before a lender can foreclose on a property and is commonly referred to as an Act 91 letter. See Pennsylvania Loan Interest and Protection Law, 41 P.S. §§ 400 et seq., and Homeowner's Emergency Mortgage Act, 35 P.S. §§1680.401c et seq.

         What has been contested by Plaintiffs is the amount currently owed MV051 on the mortgage and the reliability of its business records.

         William A. Fogelman, the corporate designee for MV051, testified at deposition that the principal balance due on the note is $75, 229.56. As of the date of his deposition, inspection fees due on the note were $146.45, and late fees were $2, 493.60. He was unable to testify as to the prior lienholders' business records, only that MV051 relied on what was reported to it as the owed at the time the note was acquired to determining the current balance due on the mortgage.

         2. Standard of Review

         The standard of review for a motion for summary judgment is well established. I must consider the evidence in a light most favorable to the non-moving party. If there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law, summary judgment is appropriate. An issue is genuine only if ...

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