NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
PER CURIAM.
Defendant Valencia Rincon Realty Corporation (Valencia) appeals from a March 22, 2013 order granting summary judgment to plaintiff Crown Bank (Crown). Valencia also appeals from a February 1, 2013 order appointing a rent receiver and an April 19, 2013 order denying reconsideration of the February 1, 2013 order. We affirm.
I
In 2002, Maria Morales and another individual formed Valencia Rincon Realty Corporation for the purpose of buying, renovating, and selling properties for profit. In 2004, Valencia purchased an investment property in Union City to build a seven-unit apartment building. Coldwell Banker advised Morales the building would have an estimated value of two million dollars.
Morales applied for a construction loan from First Bank Americano on Valencia's behalf. At the time, Morales had overseen the acquisition of approximately eight investment properties. Even though she was experienced, she arranged for Valencia to be represented by an attorney throughout the loan application process.
In May 2006, First Bank Americano approved a loan for $1.2 million. The initial interest rate on this variable interest loan was nine percent, and the loan was to mature in September 2008. The loan agreement also provided that if Valencia defaulted, the bank could increase the interest rate to eighteen percent per annum, if allowed under the law.
Valencia encountered delays in finishing the project and the loan was not repaid by September 2008. In July 2009, First Bank Americano failed and, pursuant to an agreement with the FDIC,1 Crown assumed the loan. At that time, Valencia was still having difficulties completing the construction, and Morales had to borrow $100,000 from friends and family to finish the project.
Eventually the project was completed, a certificate of occupancy issued,2 and the apartments rented out. However, because Valencia had not paid the loan, Morales approached Crown in 2010 to refinance the debt. Morales also asked to borrow $100,000 so that she could reimburse those friends and family members who loaned Valencia money to enable it to finish the construction project. In November 2010, Crown authorized the conversion of the loan, as well as an additional loan of $100,000, making the total loan $1.3 million. Throughout the refinancing process Valencia was represented by counsel.
Before authorizing the loan, Crown sought financial information from Morales and her husband because they were obligated to be guarantors as a condition of the loan. Morales represented that their net worth was $1,619,600. To further induce Crown to refinance the loan, Morales advised Crown that all of the apartments were rented and that the rental income would cover the anticipated monthly mortgage payment. Although Morales represented to Crown that she and her husband netted $3500 per week from a food cart business they operated, during her deposition she admitted that they netted only $500 per week.
The interest rate under the refinanced loan was 6.5 percent for the first five years, to then be adjusted in accordance with the loan agreement, and the loan maturity date was November 2, 2020. The collateral on the loan was a lien upon the subject property and another property Valencia owned in West New York; an assignment of the leases and rents generated by the both properties; a second mortgage on the West New York property in the amount of $500,000; and a third mortgage in the amount of $250,000 on the Moraleses' personal residence.
Valencia let the property taxes fall into arrears after May 2011 and stopped making mortgage payments after June 2011. Morales claimed Valencia could not make the mortgage and tax payments because the tenants did not faithfully pay the rent. During her deposition, Morales admitted that any rent Valencia received was used to pay the credit line on her personal residence. She also admitted that she signed the agreement to refinance the existing loan voluntarily, that Crown did not mislead her in any way, that Crown agreed to waive certain refinancing fees, and that she understood the consequences should Valencia default on the loan.
On December 27, 2011, Crown sent Valencia a notice of default, and on March 16, 2012, it filed a complaint in foreclosure. Valencia filed an answer and counterclaim asserting, among other things, that Crown engaged in predatory loaning practices, fraud, and violated the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to-20. On February 1, 2013, the court granted Crown's motion to appoint a rent receiver. On March 22, 2013, the trial court granted Crown's motion for summary judgment, struck Valencia's answer and dismissed its counterclaim, and remanded the case to the Office of Foreclosure.
II
On appeal, Valencia alleges that, during the refinancing process, Crown engaged in unconscionable business practices and predatory lending in violation of the CFA, as well as breached the covenant of good faith and fair dealing. Specifically, Valencia claims Crown: (1) forced it to refinance the existing loan; (2) exploited an inequality in the bargaining power between Morales and Crown; (3) refused to negotiate any of the terms of the loan agreement; (4) forced Morales's husband to be a guarantor of the loan; (5) failed to recognize Morales falsified her and her husband's income during the application process and that they were incapable of paying the loan if Valencia defaulted; (6) and failed to properly evaluate Valencia's ability to pay the refinanced loan. Valencia also challenges the court's appointment of a rent receiver for the subject property.
On appeal, we review a grant of summary judgment de novo and apply the same standard under Rule 4:46-2(c) that governs the trial court. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 539-40 (1995). Summary judgment is appropriate if all the evidence in the record "show[s] that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c); accord Hoagland v. City of Long Branch, 428 N.J.Super. 321, 326 (App. Div. 2012), certif. denied, 213 N.J. 388 (2013).
For a mortgagee to succeed on a motion for summary judgment on its foreclosure complaint, the mortgagee must establish a prima facie case of the right to foreclose, which can be shown if there is proof of execution, recording, and non-payment of the note and mortgage. Thorpe v. Floremoore Corp., 20 N.J.Super. 34, 37 (App. Div. 1952). In order to defeat a motion for summary judgment, the mortgagor's answer must rebut the mortgagee's prima facie right to foreclose. See R. 4:64-1(c). The defenses to a foreclosure action are limited. "The only material issues in a foreclosure proceeding are the validity of the mortgage, the amount of indebtedness, and the right of the mortgagee to [foreclose on] the mortgaged premises." Great Falls Bank v. Pardo, 263 N.J.Super. 388, 394 (Ch. Div. 1993), aff'd, 273 N.J.Super. 542 (App. Div. 1994).
The appointment of a rent receiver is "an extraordinary remedy and involves the delicate exercise of judicial discretion." First Nat'l State Bank v. Kron, 190 N.J.Super. 510, 513 (App. Div.) (citations omitted), certif. denied, 95 N.J. 204 (1983). Thus, we review such exercise of the Chancery Division's equitable authority for abuse of discretion. See id. at 516. We determine only whether the appointment could have reasonably been reached on "sufficient" or "substantial" credible evidence in the present record. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974).
Here, after carefully examining the record, we conclude the trial court properly entered summary judgment in Crown's favor. Valencia's claim that Crown violated the CFA, engaged in predatory loaning practices, and breached the covenant of good faith and fair dealing is baseless and its arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only the following comments.
First, Morales was an experienced and savvy business person when she refinanced the loan on Valencia's behalf. Second, Valencia was represented by counsel during the refinancing process. The claim there was an imbalance of bargaining power, that Valencia was forced to enter into the loan agreement, and that the Moraleses were compelled to guarantee the loan against their will is unsupported by the record.
Third, the loan was a refinance of an existing, matured loan which Valencia sought in order to stave off certain foreclosure on the property, and Morales went so far as to falsify her and her husband's income in an effort to induce Crown to authorize the loan. Fourth, while the Moraleses' ability to pay was relevant because they guaranteed the loan, the loan was to Valencia. The loan was granted based primarily upon Valencia's ability to pay. As Morales indicated during her deposition, Valencia was capable of meeting the monthly mortgage payments based upon its anticipated rental income. Fifth, the terms of the new loan were more favorable than the original loan, a fact Morales also acknowledged at her deposition.
Finally, there was sufficient evidence in the record to support the order appointing a rent receiver. See Close v. Kordulak Bros., 44 N.J. 589, 599 (1965).
Affirmed.
