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STATE OF MAINE DISTRICT COURT CUMBERLAND, ss. Location: PORTLAND Docket No. RE-13-264 wm-- PJu- -Lft -rJf-l y- FEDERAL NATIONAL MORTGAGE ASSOC., Plamtiff ORDER ON MOTION FOR v. SUMMARY JUDGMENt C:,-c}:>~ '~.
REBECCA A. LATHROP, SEP 09 2014 Defendant
Before the Court is Plaintiffs (Federal National Mortgage Association (FNMA)), for
Motion for Summary Judgment in an action for foreclosure brought pursuant to 14 M.R.S. §§
6321-6325 (2013) against the Defendant, Rebecca A. Lathrop. Defendant did not file a response
to the Plaintiffs Motion nor has she defended against or appeared in the matter. However,
because FNMA failed to establish or provide evidence of ( 1) a breach of condition in the
mortgage, (2) the amount due on the note, (3) the order of priority, (4) evidence of a properly
served notice in compliance with 14 M.R.S. § 6111 (2013), (5) proof of completed mediation or
waiver, and (6) whether or not the defendant is in the military, the motion for summary judgment
is denied. See Chase Home Fin. LLC v. Higgins, 2009 ME 136, ~ 11, 985 A.2d 508.
Furthermore, the mortgage and assignment produced by FNMA demonstrate that it lacks
standing to pursue the foreclosure of the subject property, see Bank of Am., NA. v. Greenleaf,
2014 ME 89, ~~ 12-17, --- A.3d ---, and is not the real party-in-interest. As such, FNMA has
sixty (60) days to join or substitute the real party-in-interest or the case will be dismissed without
prejudice. Plaintiffs motion for summary judgment is subject to Rule 56(j), which imposes detailed 1 requirements for granting summary judgment in foreclosure actions. M.R. Civ. P. 56U). The
Court is independently required to determine if those requirements have been met and is also
required to determine whether the mortgage holder has set forth in its statement of material facts
the evidence necessary for summary judgment in a residential mortgage foreclosure. See
Higgins, 2009 ME 136, ~ 11, 985 A.2d 508.
After reviewing the Motion and affidavits· cited to, the Court concludes that the
requirements for a summary judgment have not been met because there remains a genuine issue
of material fact regarding six of the elements necessary to support a judgment of foreclosure and
sale. See Greenleaf, 2014 ME 89, ~ 18, --- A.3d ---(citing to Higgins, 2009 ME 136, ~ 11, 985
A.2d 508) (listing the elements of proof necessary to support a judgment of foreclosure).
First, FNMA has not demonstrated that the affiant, Shawann Hampton, is qualified to
introduce records regarding Lathrop's default or the amount due on the note. See M.R. Evid.
803(6); M.R. Civ. P. 56(e); Beneficial Me., Inc. v. Carter, 2011 ME 77, ~~ 14-16, 25 A.3d 96;
(Hampton Af. ~~ 5, 7, 8). FNMA was not assigned the mortgage until March 25, 2013, after
Lathrop allegedly defaulted in December 2011. (Pl. SMF ~~ 6,7; Hampton Af. ~~ 4, 5.) It is
unclear from the record when FNMA began keeping its own records of Lathrop's payments and
the extent to which Hampton is relying on records that were created by entities other than
1 Maine Rule of Civil Procedure 56U) states, in part:
No summary judgment shall be entered in a foreclosure action filed pursuant to Title 14, Chapter 713 of the Maine Revised Statutes except after review by the court and determination that (i) the service and notice requirements of 14 M.R.S. § 6111 and these rules have been strictly performed; (ii) the plaintiff has properly certified proof of ownership of the mortgage note and produced evidence of the mortgage note, the mortgage, and all assignments and endorsements of the mortgage note and the mortgage; and (iii) mediation, when required, has been completed or has been waived or the defendant, after proper service and notice, has failed to appear or respond and has been defaulted or is subject to default.
2 FNMA. Hampton's averment that it is the "regular practice of all previous holders and servicers
of the [n]ote and [m]ortgage referenced to make and keep such records in maintaining the
account" is insufficient to admit documents created by other entities or documents created by
FNMA that integrate information contained in documents received from other entities. See
Carter, 2011 ME 77, ~~ 14-16, 25 A.3d 96. Hampton does not identify the previous "holders
and servicers" from which FNMA has received records or provide any foundation for his
assertions that these entities kept the records in their "regular practice." (Hampton Af. ~ 1.) Nor
does Hampton aver that the documents were accurately kept by these prior entities or provide
any details regarding how the documents were integrated into FNMA' s records and checked for
accuracy. Thus, Hampton's affidavit is insufficient to support the admission of the documents
demonstrating Lathrop's alleged default or the amount due on the note and, by extension, any
averments Hampton makes regarding those issues. See Higgins, 2009 ME 136, ~ 11, 985 A.2d
508; HSBC Mortg. Serv. v. Murphy, 2011 ME 59,~ 9, 19 A.3d 815 (emphasizing that a party's
assertion of material facts must be supported by record references that are of a quality that would
be admissible at trial because "the affidavits [submitted in residential foreclosure cases are]
largely derivative because [they are] drawn from a business's records, and not from the affiant's
personal observation of events").
Regardless of the admissibility of any business records regarding Lathrop's alleged
default and the amount due on the note, no documents were cited to for these propositions in
either FNMA's statement of material facts or Hampton's affidavit. Paragraph Seven ofFNMA's
Statement of Material Facts asserts that the defendant is in default and cites to Paragraph Five of
3 the Hampton affidavit? The Hampton affidavit mirrors the assertion contained in the Statement
of Material Facts but does not cite to any records. This is insufficient to support the assertion of
default. See Murphy, 2011 ME 59,~ 9, 19 A.3d 815. Likewise, Paragraph Nine of FNMA's
Statement of Material Facts cites to Paragraph Eight of the Hampton affidavit to support the
amount owed on the note. However, Paragraph Eight of the Hampton affidavit contains no
citation to any document or record to support the amount claimed. See id. Copies of some
financial records were submitted with the Motion for Summary Judgment, but they are not cited
to and therefore are not part of the summary judgment record. See M.R. Civ. P. 56.
In addition, FNMA's Statement of Material Facts does not contain a statement regarding
the Defendant's military status, which is required because the Defendant has not appeared in the
matter. 3 See Lubar v. Connelly, 2014 ME 17, ~ 37, 86 A.3d 642; HSBC Bank USA, N.A. v.
Gabay, 2011 ME 101, ~ 22, 28 A. 3d 1158 ("Facts not set forth in the statement of material facts
are not in the summary judgment record even if the fact in question can be gleaned from
affidavits or other documents attached to, and even referred to in portions of, a statement of.
material fact."); see also Higgins, 2009 ME 136, ~ 11, 985 A.2d 508.
Also, FNMA' s assertion of superior priority is does not contain a proper record citation.
See M.R. Civ. P. 56; (Pl. SMF ~ 16.) FNMA cites to a copy of the mortgage to establish its
priority but does includ~ any citation indicating that it at any time searched the registry of deeds
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£NT£ RED SEP 2 4 2014
STATE OF MAINE DISTRICT COURT CUMBERLAND, ss. Location: PORTLAND Docket No. RE-13-264 wm-- PJu- -Lft -rJf-l y- FEDERAL NATIONAL MORTGAGE ASSOC., Plamtiff ORDER ON MOTION FOR v. SUMMARY JUDGMENt C:,-c}:>~ '~.
REBECCA A. LATHROP, SEP 09 2014 Defendant
Before the Court is Plaintiffs (Federal National Mortgage Association (FNMA)), for
Motion for Summary Judgment in an action for foreclosure brought pursuant to 14 M.R.S. §§
6321-6325 (2013) against the Defendant, Rebecca A. Lathrop. Defendant did not file a response
to the Plaintiffs Motion nor has she defended against or appeared in the matter. However,
because FNMA failed to establish or provide evidence of ( 1) a breach of condition in the
mortgage, (2) the amount due on the note, (3) the order of priority, (4) evidence of a properly
served notice in compliance with 14 M.R.S. § 6111 (2013), (5) proof of completed mediation or
waiver, and (6) whether or not the defendant is in the military, the motion for summary judgment
is denied. See Chase Home Fin. LLC v. Higgins, 2009 ME 136, ~ 11, 985 A.2d 508.
Furthermore, the mortgage and assignment produced by FNMA demonstrate that it lacks
standing to pursue the foreclosure of the subject property, see Bank of Am., NA. v. Greenleaf,
2014 ME 89, ~~ 12-17, --- A.3d ---, and is not the real party-in-interest. As such, FNMA has
sixty (60) days to join or substitute the real party-in-interest or the case will be dismissed without
prejudice. Plaintiffs motion for summary judgment is subject to Rule 56(j), which imposes detailed 1 requirements for granting summary judgment in foreclosure actions. M.R. Civ. P. 56U). The
Court is independently required to determine if those requirements have been met and is also
required to determine whether the mortgage holder has set forth in its statement of material facts
the evidence necessary for summary judgment in a residential mortgage foreclosure. See
Higgins, 2009 ME 136, ~ 11, 985 A.2d 508.
After reviewing the Motion and affidavits· cited to, the Court concludes that the
requirements for a summary judgment have not been met because there remains a genuine issue
of material fact regarding six of the elements necessary to support a judgment of foreclosure and
sale. See Greenleaf, 2014 ME 89, ~ 18, --- A.3d ---(citing to Higgins, 2009 ME 136, ~ 11, 985
A.2d 508) (listing the elements of proof necessary to support a judgment of foreclosure).
First, FNMA has not demonstrated that the affiant, Shawann Hampton, is qualified to
introduce records regarding Lathrop's default or the amount due on the note. See M.R. Evid.
803(6); M.R. Civ. P. 56(e); Beneficial Me., Inc. v. Carter, 2011 ME 77, ~~ 14-16, 25 A.3d 96;
(Hampton Af. ~~ 5, 7, 8). FNMA was not assigned the mortgage until March 25, 2013, after
Lathrop allegedly defaulted in December 2011. (Pl. SMF ~~ 6,7; Hampton Af. ~~ 4, 5.) It is
unclear from the record when FNMA began keeping its own records of Lathrop's payments and
the extent to which Hampton is relying on records that were created by entities other than
1 Maine Rule of Civil Procedure 56U) states, in part:
No summary judgment shall be entered in a foreclosure action filed pursuant to Title 14, Chapter 713 of the Maine Revised Statutes except after review by the court and determination that (i) the service and notice requirements of 14 M.R.S. § 6111 and these rules have been strictly performed; (ii) the plaintiff has properly certified proof of ownership of the mortgage note and produced evidence of the mortgage note, the mortgage, and all assignments and endorsements of the mortgage note and the mortgage; and (iii) mediation, when required, has been completed or has been waived or the defendant, after proper service and notice, has failed to appear or respond and has been defaulted or is subject to default.
2 FNMA. Hampton's averment that it is the "regular practice of all previous holders and servicers
of the [n]ote and [m]ortgage referenced to make and keep such records in maintaining the
account" is insufficient to admit documents created by other entities or documents created by
FNMA that integrate information contained in documents received from other entities. See
Carter, 2011 ME 77, ~~ 14-16, 25 A.3d 96. Hampton does not identify the previous "holders
and servicers" from which FNMA has received records or provide any foundation for his
assertions that these entities kept the records in their "regular practice." (Hampton Af. ~ 1.) Nor
does Hampton aver that the documents were accurately kept by these prior entities or provide
any details regarding how the documents were integrated into FNMA' s records and checked for
accuracy. Thus, Hampton's affidavit is insufficient to support the admission of the documents
demonstrating Lathrop's alleged default or the amount due on the note and, by extension, any
averments Hampton makes regarding those issues. See Higgins, 2009 ME 136, ~ 11, 985 A.2d
508; HSBC Mortg. Serv. v. Murphy, 2011 ME 59,~ 9, 19 A.3d 815 (emphasizing that a party's
assertion of material facts must be supported by record references that are of a quality that would
be admissible at trial because "the affidavits [submitted in residential foreclosure cases are]
largely derivative because [they are] drawn from a business's records, and not from the affiant's
personal observation of events").
Regardless of the admissibility of any business records regarding Lathrop's alleged
default and the amount due on the note, no documents were cited to for these propositions in
either FNMA's statement of material facts or Hampton's affidavit. Paragraph Seven ofFNMA's
Statement of Material Facts asserts that the defendant is in default and cites to Paragraph Five of
3 the Hampton affidavit? The Hampton affidavit mirrors the assertion contained in the Statement
of Material Facts but does not cite to any records. This is insufficient to support the assertion of
default. See Murphy, 2011 ME 59,~ 9, 19 A.3d 815. Likewise, Paragraph Nine of FNMA's
Statement of Material Facts cites to Paragraph Eight of the Hampton affidavit to support the
amount owed on the note. However, Paragraph Eight of the Hampton affidavit contains no
citation to any document or record to support the amount claimed. See id. Copies of some
financial records were submitted with the Motion for Summary Judgment, but they are not cited
to and therefore are not part of the summary judgment record. See M.R. Civ. P. 56.
In addition, FNMA's Statement of Material Facts does not contain a statement regarding
the Defendant's military status, which is required because the Defendant has not appeared in the
matter. 3 See Lubar v. Connelly, 2014 ME 17, ~ 37, 86 A.3d 642; HSBC Bank USA, N.A. v.
Gabay, 2011 ME 101, ~ 22, 28 A. 3d 1158 ("Facts not set forth in the statement of material facts
are not in the summary judgment record even if the fact in question can be gleaned from
affidavits or other documents attached to, and even referred to in portions of, a statement of.
material fact."); see also Higgins, 2009 ME 136, ~ 11, 985 A.2d 508.
Also, FNMA' s assertion of superior priority is does not contain a proper record citation.
See M.R. Civ. P. 56; (Pl. SMF ~ 16.) FNMA cites to a copy of the mortgage to establish its
priority but does includ~ any citation indicating that it at any time searched the registry of deeds
to determine the priority of any other possible lienholders. Without such a statement, it is
impossible to verify FNMA' s priority position.
2 Paragraph seven also cites to FNMA' s complaint to support its assertion that Lathrop defaulted under the terms of the mortgage. However, "[a] party's citation to its own complaint is insufficient to support a material fact." Deutsche Bank Nat. Trust Co. v. Raggiani, 2009 ME 120,, 6, 985 A.2d I. 3 The affidavit submitted by FNMA 's attorney does state that the Defendant is not currently in the military and attaches the appropriate record support, but this is insufficient to establish the fact because all material facts must be included in the statement of material facts. See HSBC Bank USA, N.A. v. Gabay, 20 II ME I 0 I,, 22, 28 A .3d 1158.
4 FNMA also did not provide "evidence of [a] properly served notice of default and
mortgagor's right to cure in compliance with statutory requirements." Higgins, 2009 ME 136, ~
11, 985 A.2d 508. The Notice of Default sent to the Defendant, dated June 12,2013, informs the
Defendant that "[i]f the default is not cured by August 1, 2013, the payment due for that date
must also be included" in the amount necessary to cure the Defendant's default. (Pl. SMF 8;
Hampton Af. ~ 6; Ex. D.) This statement does not comply with the statutory requirements of 14
M.R.S. § 6111, which "effectively freezes" additions to the amount necessary to cure the default.
Greenleaf, 2014 ME 89, ~ 31, --- A.3d ---. By stating that the August 1, 2013 payment must be
"included," the letter indicates that that amount is necessary in order to cure the default and
therefore runs afoul of 14 M.R.S. § 6111 and the Greenleaf decision.
Furthermore, with regard to compliance with the statutory mediation program, see 14
M.R.S. § 6321-A (2013), FNMA's Statement of Material Facts provides:
15. Mediation, if required, has been completed, waived, or borrower(s) are not appearing [sic]. For proof of completion, waiver, or default or mediation, or affidavit that mediation was not required, see [p ]aragraph 3 of the Affidavit of Attorney.
(Pl. SMF ~ 15.) This Paragraph, however, fails to assert anything all. Either mediation
was completed or it was waived and this Paragraph fails to state which occurred. The
Court will not search the record to determine the mediation status. See Gabay, 2011 ME
101, ~ 17,28 A.3d 1158.
Finally, as FNMA' s Statement of Material Facts allege, FNMA is currently the "holder of
[Lathrop's] mortgage . . . by virtue of an Assignment of Mortgage from Mortgage Electronic
Registration Systems, Inc., acting solely as the nominee for First Horizon Home Loan
Corporation." (Pl. SMF ~ 6; Ex. C.) The assignment from MERS to FNMA is the only
assignment contained in the record. The mortgage at issue lists First Horizon Home Loan
5 Corporation as the lender and MERS as the "nominee." (Ex. B.) The mortgage contains the same
language as the mortgage in Bank of Am., NA. v. Greenleaf, 2014 ME 89, ~ 13, --- A.3d ---.
Applying the Law Court's reasoning in Greenleaf, because MERS possessed only a limited
interest in the mortgage, it could not have transferred the "owner[ship]" interest to FNMA
required to establish standing to seek foreclosure of Lathrop's mortgage. As such, FNMA lacks
standing and is not the real party in interest. Pursuant to M.R. Civ. P. 17(a), FNMA has sixty
(60) days to join or substitute the real party in interest, the owner of the mortgage, or the case
will be dismissed without prejudice.
The entry shall be:
The Plaintiffs Motion for Summary Judgment is denied. The Plaintiff is to join
or substitute the real party in interest within 60 days of this order or the action will be dismissed
without prejudice. The Clerk is directed to incorporate this Order into the docket by reference
pursuant to Maine Rule of Civil Procedure 79(a).
~ ~ \Y _ _ Dated: - - - +c..\,__.___,__,_ Hon. Peter . Goranites Judge, District Court
6 OF COURTS 3rland County Street, Ground Floor ld, MF04101
\ JEFFREY J. HARDIMAN, ESQ - P\ ~""'+ f'f' (. ~IN'\.s:e.l SHECHTMAN, HALPERIN & SAVAGE, LLP. 1080 MAIN STREET PAWfUCKET, RI. 02860
~OF COURTS 1erland County 1 Street, Ground Floor tnd, ME 04101
REBECCAA. LATHROP - :DJ.QI'\d~+ ( Qro 5,) 500 FOREST AVENUE, SUITE 7 PORTLAND, ME. 04103