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NOT FOR PUBLICATION WITHOUT THEAPPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEYAPPELLATE DIVISION

DOCKET NO. A-0804-10T3

AURORA LOAN SERVICES, LLC,

Plaintiff-Respondent,

v.

BERNICE TOLEDO,

Defendant-Appellant,

and

MR. TOLEDO, Husband ofBERNICE TOLEDO, MORTGAGEELECTRONIC REGISTRATIONSYSTEMS, INC., As NomineeFor LEHMAN BROTHERS BANK FSB;MORTGAGE ELECTRONIC REGISTRATION

SYSTEMS, INC., As Nominee ForAURORA LOAN SERVICES LLC,

Defendants.

_________________________________________________________

Submitted September 26, 2011 - Decided

Before Judges Alvarez and Skillman.

On appeal from Superior Court of New Jersey,Chancery Division, Passaic County, DocketNo. F-10005-09.

Kenneth C. Marano, attorney for appellant.

Victoria E. Edwards (Akerman Senterfitt),attorney for respondent.

October 18, 2011

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PER CURIAM

Defendant appeals from an order entered on August 31, 2010,

which granted a summary judgment in this mortgage foreclosure

action declaring that defendant's answer "sets forth no genuine

issue as to any material fact challenged and that [plaintiff] is

entitled to a judgment as a matter of law." There is no

indication in the record before us that plaintiff ever secured a

final judgment of foreclosure. Therefore, the appeal appears

interlocutory. See Wells Fargo Bank, N.A. v. Garner, 416 N.J.

Super. 520, 523-24 (App. Div. 2010). However, because defendant

did not move to dismiss on that basis and the appeal has been

pending for a substantial period of time, we grant leave to

appeal as within time and address the merits. See R. 2:4-

4(b)(2).

The record before us is rather sparse and disjointed.

However, the following facts may be gleaned from that record.

Defendant owns a home in the Borough of Prospect Park. On

July 24, 2006, defendant executed two promissory notes payable

to Lehman Brothers Bank, the first for $320,000, which was

payable on August 1, 2036, and the second for $60,000, which was

payable on August 1, 2021. Both notes were secured by mortgages

on defendant's home.www.S

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On September 1, 2006, plaintiff began servicing the notes

on behalf of Lehman.

Sometime in 2008, defendant went into default in the

payment of her obligations under the notes.

On January 30, 2009, plaintiff purportedly obtained an

assignment of the $320,000 note from Lehman and the mortgage

securing that note.1 This assignment was signed by a person

named Joann Rein, with the title of Vice-President of Mortgage

Electronic Systems, Inc. (MERS). MERS was described in the

assignment document as a "nominee for Lehman Brothers Bank."

This document is discussed in greater detail later in the

opinion.

On February 23, 2009, plaintiff filed this mortgage

foreclosure action. The parties subsequently engaged in

negotiations to resolve the matter. Those negotiations were

unsuccessful and are not relevant to our disposition of this

appeal.

Plaintiff filed a motion for summary judgment to strike

defendant's answer on the ground there was no contested issue of

fact material to plaintiff's right to foreclose upon defendant's

property. In support of this motion, plaintiff relied primarily

1 The record does not indicate whether there also was anassignment of the $60,000 note and mortgage securing that note.www

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upon an affidavit by Laura McCann, one of its vice-presidents,

and exhibits attached to that affidavit, which are discussed

later in this opinion. Defendant submitted an answering

certification.

After hearing oral argument, the trial court issued a brief

written opinion and order granting plaintiff's motion. This

appeal followed.

To have standing to foreclose a mortgage, a party generally

must "own or control the underlying debt." Wells Fargo Bank,

N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div. 2011) (quoting

Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 327-28 (Ch.

Div. 2010)). If the debt is evidenced by a negotiable

instrument, such as the promissory notes executed by defendant,

the determination whether a party owns or controls the

underlying debt "is governed by Article III of the Uniform

Commercial Code (UCC), N.J.S.A. 12:3-101 to -605, in particular

N.J.S.A. 12A:3-301." Ibid. Under this section of the UCC, the

only parties entitled to enforce a negotiable instrument are

"[1] the holder of the instrument, [2] a nonholder in possession

of the instrument who has the rights of the holder, or [3] a

person not in possession of the instrument who is entitled to

enforce the instrument pursuant to [N.J.S.A.] 12A-3-309 orwww.S

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subsection d. of [N.J.S.A.] 12A:3-418." N.J.S.A. 12A:3-301

(brackets added).

In this case, it is clear for the same reasons as in Ford,

418 N.J. Super. at 598, that plaintiff is neither a "holder" of

the promissory notes executed by defendant nor a "person not in

possession" of those notes who is entitled to enforce them

pursuant to N.J.S.A. 12A:3-309 or N.J.S.A. 12A:3-418(d).

Therefore, as in Ford, plaintiff's right to foreclose upon the

mortgages defendant executed to secure those notes depends upon

whether plaintiff established that it is "a nonholder in

possession of the instrument[s] who has the rights of a holder."

N.J.S.A. 12A:3-301; see Ford, supra, 418 N.J. Super. at 498-99.

To establish its right to foreclose upon the mortgage

defendant executed to secure her $320,000 note to Lehman,

plaintiff relied upon an affidavit by Laura McCann, a vice-

president of plaintiff. McCann's affidavit states that she has

"custody and control of the business records of [plaintiff] as

they relate to [defendant's] loans." Regarding each of the

copies of defendant's notes and mortgages attached to her

certifications, McCann asserts that it is a "true and correct

copy." However, McCann does not state that she personally

confirmed that those attachments were copies of originals in

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McCann's affidavit also has attached a copy of a document

that purports to be a "Corporate Assignment of Mortgage" from

MERS, as Lehman's nominee, to plaintiff. Again, McCann's

affidavit asserts that this document "is a true and correct copy

of the instrument assigning the Mortgage and Note to

[plaintiff]," but does not state that she personally confirmed

that it was a copy of the original.

A certification in support of a motion for summary judgment

must be based on "personal knowledge." Ford, supra, 418 N.J.

Super. at 599 (quoting R. 1:6-6); see also Deutsche Bank Nat'l

Trust Co. v. Mitchell, ___ N.J. Super. ___, ___ (App. Div. 2011)

(slip op. at 17-19). Our Supreme Court has recently reaffirmed

the need for strict compliance with this requirement in mortgage

foreclosure actions by adopting, effective December 20, 2010, a

new court rule which specifically states that an affidavit in

support of a judgment in a mortgage foreclosure action must be

"based on a personal review of business records of the plaintiff

or the plaintiff's mortgage loan servicer." R. 4:64-2(c)(2).

McCann's affidavit does not state that she conducted such a

"personal review of [plaintiff's] business records" relating to

defendant's notes and mortgages.

Furthermore, even if plaintiff had presented adequate

evidence that the purported assignment of the mortgages andwww.S

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notes attached to McCann's affidavit was a copy of the original

in plaintiff's files, this would not have been sufficient to

establish the effectiveness of the alleged assignment. This

document was signed by a JoAnn Rein, who identifies herself as a

vice-president of MERS, as nominee for Lehman Brothers, and was

notarized in Nebraska. Plaintiff's submission in support of its

motion for summary judgment did not include a certification by

Rein or any other representative of MERS regarding her authority

to execute the assignment or the circumstances of the

assignment. In the absence of such further evidence, we do not

view the purported assignment of the mortgages and notes to be a

self-authenticating document that can support the summary

judgment in plaintiff's favor. N.J.R.E. 901; see 2 McCormick on

Evidence 221 (6th ed. 2006).

There is an additional potential problem with this

purported assignment. The assignment was not made by Lehman, as

payee of the promissory notes secured by the mortgage, but

rather by MERS, "as nominee for Lehman." Although the notes and

mortgages appointed MERS as Lehman's nominee, Lehman filed a

petition for bankruptcy protection in September 2008, see Andrew

Ross Sorkin, Lehman Files for Bankruptcy; Merrill is Sold, N.Y.

Times (Sept. 14, 2008), which was before the purported

assignment of defendant's mortgage and note on January 30, 2009.www.S

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Therefore, we question whether Lehman's designation of MERS as

its nominee remained in effect after Lehman filed its bankruptcy

petition, absent ratification of that designation by the

bankruptcy trustee. On remand, the trial court should address

the question whether MERS was still Lehman's nominee as of the

date of its purported assignment of defendant's note and

mortgage to plaintiff.

Accordingly, we reverse the August 31, 2010 order granting

plaintiff's motion for summary judgment and remand to the trial

court for further proceedings in conformity with this opinion.

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