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September 2, 2010 |
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| November 30, 2009 |
By: Vesselin Mitev |
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lender’s “unconscionable, vexatious and opprobrious” conduct in attempting to foreclose on a home has prompted a New York state judge to cancel the mortgage on the Long Island property.
The foreclosure action brought by IndyMac Bank came before Suffolk County Supreme Court Justice Jeffrey A. Spinner as the result of a state law mandating pre-foreclosure settlement conferences between lenders and borrowers of subprime home loans.
Spinner said he found it “deeply troubling” that the bank had spurned what would have been a “win-win” solution for all parties. Instead of negotiating, hthe bank engaged in “harsh, repugnant, shocking and repulsive” treatment of homeowner Dana Yano-Horoski. She requested a conference in February to seek a deal with IndyMac Bank on the $292,500 mortgage she took out in 2004 on her East Patchogue home.
Following a series of hearings attempting “to obtain meaningful cooperation” from the bank, Spinner ordered a bank representative to attend a conference in September.
Karen Dickinson, regional loss mitigation manager for IndyMac, “made it abundantly clear that no form of mediation, resolution or settlement would be acceptable” to the bank, Spinner wrote.
Notably, he said the bank asserted that the borrower had previously defaulted on a forbearance agreement when in fact the agreement had not been sent out.
“Defendant, through plaintiff’s duplicity, found herself to be in unique and uncomfortable position of being placed in default of the ‘agreement’ even before she had received it,” Spinner wrote.
The judge also remarked that despite her severe health problems, Yano-Horoski and her husband attended every conference and tried to resolve the dispute in good faith “only to be callously and arbitrarily turned away” by the lender.
The judge said the bank’s conduct was “wholly unsupportable at law or in equity, greatly egregious and so completely devoid of good faith that equity cannot be permitted to intervene on its behalf.”
But he went further than rejecting the foreclosure. If the case were simply dismissed, he wrote the court “cannot be assured that plaintiff will not repeat this course of conduct.”
He concluded the original principal of $292,500 “should be canceled, voided and set aside,” the mortgage should be discharged and the bank barred from any attempt to collect on the note.
IndyMac, which was placed in conservatorship in July 2008, is now a subsidiary of California-based OneWest Bank. The firm said it could not prepare a response by deadline.
Vesselin Mitev reports for the New York Law Journal, an ALM affiliate of the Daily Business Review.
Reader's comments
stephaniemorrowlf said:I wish more judges would have the courage to take the same sort of approach when warranted. 11/30 at 6:03 p.m. |
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