Reverse Mortgage Solutions, Inc. v. The Estate of Jose Antonio Santiago- Ocasio et al
Filing
50
Opinion and ORDER. GRANTED 47 Motion for Partial Summary Judgment. Plaintiff shall move for default judgment against the remaining defendants within fourteen days from the expiration of HUD's moratorium, which, as of today, extends until May 18, 2018. See HUD's Mortgage Letter 2018-02, available at https://www.hud.gov/sites/dfiles/OCHCO/documents/18-02ml.pdf. Signed by Judge Gustavo A. Gelpi on 3/23/2018. (JRD)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
REVERSE MORTGAGE SOLUTIONS,
INC.,
Plaintiff,
Civil No. 16-1421 (SEC)
v.
THE ESTATE OF JOSE SANTIAGOOCASIO, ET AL.,
Defendants.
OPINION AND ORDER
Plaintiff Reverse Mortgage Solutions, Inc. filed this in rem mortgage foreclosure
action against the members of the estates of José Santiago-Ocasio and Antonia AllendeReyes. Because the reverse mortgage subject of this action is secured by the Department
of Housing and Urban Development under its Home Equity Conversion Program for
seniors, Plaintiff joined the United States pursuant to 28 U.S.C. § 2410.1
Pending before the Court is Plaintiff’s unopposed motion for partial summary
judgment against Jose C. Santiago-Allende, the only member of the estates who
answered the complaint. In his answer, Santiago-Allende stated that he “does not have
any hereditary interest in the property,” that “[t]he keys of the property are available to
plaintiff upon demand,” and that he “accepts that the Court enter judgment.” ECF No.
39, p. 2. The motion is granted.
1
Plaintiff also joined two local government agencies as defendants but later dismissed its claims against them.
See ECF No. 43.
Civil No. 16-1421 (SEC)
I.
Page 2
Factual Background
On October 22, 2010, José Santiago-Ocasio and Antonia-Allende Reyes (the
Borrowers) entered into a reverse mortgage loan agreement and executed a mortgage
note payable to Urban Financial Group, or to its order, for the maximum principal
amount of $237,000.00, with interest at 5.060%. The Borrowers ultimately received
$111,140.88 in principal pursuant to the terms of the loan agreement. Both Borrowers
passed away in 2014.
To guarantee the debt, the Borrowers executed a mortgage deed, which was
notarized and recorded in the Puerto Rico Property Registry. Reverse Mortgage
Solutions is the current holder of the of the mortgage note. See ECF Nos. 30, ¶7; 39, ¶C;
& 47-2 at 1. Pursuant to the terms of the mortgage documents, the holder of the note is
entitled to declare the debt due and payable when, as here, “a Borrower dies and the
property is not the principal residence of at least one Borrower.” ECF No. 30-1, p. 7.
Both Borrowers passed away in 2014. Accordingly, Plaintiff declared the entire debt
due and payable.
The mortgage property, whose title is now vested upon the Borrowers’
succession, is described below in the Spanish language:
URBANA: Solar marcado con el número (8) ocho del Bloque "G"
en el Plano de Inscripción de la Urbanización Villas de San
Agustín, Sección Primera, radicado en el Barrio Guaraguao Abajo
y Minillas término municipal de Bayamón, Puerto Rico, con un
área superficial de trescientos once punto dieciocho metros
cuadrados (311.18) y colinda por el NORTE, en una distancia de
veinticuatro metros, con el solar número nueve (9) del mencionado
Plano y Bloque; por el SUR, en una distancia de veinticuatro
metros, con el solar número siete (7) del mencionado Plano y
Bloque; por el ESTE, en una distancia de doce punto novecientos
sesenta y seis metros (12.966), con el solar número veintiuno (21)
Civil No. 16-1421 (SEC)
Page 3
del mencionado plano y bloque; y por el OESTE, en una distancia
de doce punto novecientos sesenta y seis metros (12.966), con la
Calle número seis (6) del mencionado Plano. Sobre el antes
descrito solar se ha edificado una casa residencial de hormigón
armado dedicada a vivienda.
Inscrita al Folio 216 del Tomo 1290 de Bayamón Sur, finca
número 58,040, Registro de la Propiedad de Puerto Rico, Sección
I de Bayamón.
As of May 16, 2017, Plaintiff was owed $172,383.17 in unpaid principal,2
$420.14 in accrued interest, $37.78 in accrued mortgage insurance premiums, and
$424.00 in hazard insurance for a total of $173,295.09. See ECF No. 47-1, p. 5. But as
a non-recourse mortgage loan, Plaintiff concedes, Defendants are not liable for these
amounts and they will not be pursued for any deficiency.3
II.
Standard of Review
Summary judgment is appropriate only if the “movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a). A dispute is genuine if a “reasonable fact-finder could
resolve in favor of either party and a material fact is one that could affect the outcome
of the case.” Flood v. Bank of Am. Corp., 780 F.3d 1, 7 (1st Cir. 2015). When
conducting this analysis, courts “may not weigh the evidence,” Casas Office Machs.,
Inc. v. Mita Copystar Am., Inc., 42 F.3d 668 (1st Cir. 1994), and must construe the
record and resolve all reasonable inferences in the “light most flattering” to the
nonmovant. Soto-Padró v. Public Bldgs. Authority, 675 F.3d 1 (1st Cir. 2012).
Pursuant to the mortgage note, the accrued interest is “added to and made part of, the principal balance as a
Loan Advance at the end of each month.” ECF No. 30-1, p. 4.
2
See 24 C.F.R. § 206.27 (“The borrower shall have no personal liability for payment of the outstanding loan
balance. The mortgagee shall enforce the debt only through sale of the property. The mortgagee shall not be
permitted to obtain a deficiency judgment against the borrower if the mortgage is foreclosed.”)
3
Civil No. 16-1421 (SEC)
Page 4
Where, as here, the summary judgment motion stands unopposed, the court “is
obliged to take the plaintiff's statement of uncontested facts as true.” Velez v. Awning
Windows, Inc., 375 F.3d 35, 41–42 (1st Cir. 2004). Still this does not mean that
summary-judgment automatically follows. “Even when faced with an unopposed
motion for summary judgment, a court still has the obligation to test the undisputed facts
in the crucible of the applicable law in order to ascertain whether judgment is
warranted.” Id.
III.
Applicable Law and Analysis
Under Puerto Rico law, “obligations arising from contracts have legal force
between the contracting parties, and must be fulfilled in accordance with their
stipulations.” P.R. Laws Ann. t. 31 § 2994. A mortgage is defined as “a guarantee of a
debt, which in turn is secured by a particular property.” Chicago Title Ins. Co. v.
Sotomayor, 394 F.Supp.2d 452, 460 (D.P.R. 2005) (citing Torres v. Fernandez, 47
D.P.R. 845, 848 (1934)).
The reverse mortgage note object of this action permits Plaintiff to declare the
note due and payable and require immediate payment-in-full of all outstanding principal
and accrued interest if a “Borrower dies and the Property is not the principal residence
of at least one surviving Borrower.” ECF No. 30-1, p. 7. Here, it is uncontested that both
Borrowers passed away. It is also undisputed that as of May 16, 2017, Plaintiff was
owed a total of $173,295.09 pursuant to the terms of the mortgage note and that none of
the members of the Borrower’s estate has paid this debt. Accordingly, Plaintiff is entitled
to judgment as a matter of law providing for the foreclosure of the mortgage property
described above. Plaintiff, however, may not seek any deficiency judgment from
Defendants.
Civil No. 16-1421 (SEC)
IV.
Page 5
Conclusion
Plaintiff’s motion for partial summary judgment is GRANTED.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 23rd day of March, 2018.
s/ Gustavo A. Gelpí
GUSTAVO A. GELPI
U.S. District Judge
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