Opinion

Felix Salmon

Hero of the day: Jeffrey Spinner

By Felix Salmon
November 25, 2009

Anybody who thinks that banks always act in their own best interest when a mortgage goes into default (I’m looking at you, Indiviglio) should read the wonderful judgment of Jeffrey Spinner, of Suffolk County Supreme Court, in the case of . Indymac Bank F.S.B. v Yano-Horoski. Apologies for quoting at some length, but it’s worth it:

At the conference held on September 22, 2009, Karen Dickinson, Regional Manager of Loss Mitigation for IndyMac Mortgage Services, division of OneWest Bank F.S.B. (“IndyMac”) appeared on behalf of Plaintiff. IndyMac purports to be the servicer of the loan for the benefit of Deutsche Bank who, it is claimed, is the owner and holder of the note and mortgage (though the record holder is IndyMac Bank F.S.B., an entity which no longer is in existence). At that conference, it was celeritously made clear to the Court that Plaintiff had no good faith intention whatsoever of resolving this matter in any manner other than a complete and forcible devolution of title from Defendant. Although IndyMac had prepared a two page document entitled “Mediation Yano-Horoski” which contained what purported to be a financial analysis, Ms. Dickinson’s affirmative statements made it abundantly clear that no form of mediation, resolution or settlement would be acceptable to Plaintiff… Although Ms. Dickinson insisted that Ms. Yano-Horoski had been offered a “Forbearance Agreement” in the recent past upon which she quickly defaulted, it was only after substantial prodding by the Court that Ms. Dickinson conceded, with great reluctance, that it had not been sent to Defendant until after its stated first payment due date and hence, Defendant could not have consummated it under any circumstances… Plaintiff flatly rejected an offer by Plaintiff’s daughter to purchase the house for its fair market value (a so-called “short sale”) with third party financing. Plaintiff refused to consider a loan modification utilizing any more than 25% of the income of Plaintiff’s husband and daughter (both of whom reside in the premises with her), the excuse being that “We can’t control what non-obligors do with their money” (the logical follow up to this statement is how does the bank control what the obligor does with her money?)… The Plaintiff also summarily rejected an offer by both Plaintiff’s husband and daughter to voluntarily obligate themselves for payment upon the full indebtedness, thus committing their individual incomes expressly to the purpose of a loan modification… Even a final and desperate offer of a deed in lieu of foreclosure was met with bland equivocation…

In the matter before the Court, the pendulum of credibility swings heavily in favor of Defendant. When the conduct of Plaintiff in this proceeding is viewed in its entirety, it compels the Court to invoke the ancient and venerable principle of “Falsus in uno, falsus in omni” … Regrettably, the Court has been unable to find even so much as a scintilla of good faith on the part of Plaintiff. Plaintiff comes before this Court with unclean hands yet has the insufferable temerity to demand equitable relief against Defendant…

The affirmative conduct exhibited by Plaintiff at least since since February 24, 2009 (and perhaps earlier) has been and is inequitable, unconscionable, vexatious and opprobrious. The Court is constrained, solely as a result of Plaintiff’s affirmative acts, to conclude that Plaintiff’s conduct is 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. Indeed, Plaintiff’s actions toward Defendant in this matter have been harsh, repugnant, shocking and repulsive to the extent that it must be appropriately sanctioned so as to deter it from imposing further mortifying abuse against Defendant.

Spinner then voided the entire debt, leaving Yano-Horoski in full possession of 100% of the equity in her home, and the bank with nothing whatsoever.

Most of us have had unpleasant run-ins with our bank, but the experience of Yano-Horoski was clearly much worse than most, and it’s great that IndyMac and its representatives have been so publicly slapped down. The bank couldn’t even explain to the court how it arrived at its monstrous total for the amount owed ($527,437.73), or even what the outstanding principal amount was (somewhere between $283,992.48 and $290,687.85). And on top of all that, the plaintiff (IndyMac Bank F.S.B.) doesn’t even legally exist.

In an ideal world, Judge Spinner would be able to bar Karen Dickinson from ever being involved in another mortgage renegotiation, but unfortunately that’s not possible. But if you’re unfortunate enough to be dealing with her, it might be worth trying to take your case to Suffolk County Supreme Court, instead of attempting what seems sure to be a fruitless attempt to come to terms. The judge there clearly has no sympathy for Ms Dickinson whatsoever.

(HT: Mitev, via TBI)

Comments
51 comments so far | RSS Comments RSS

I guess I still don’t get this line of posts. If the mortgage services want to evict people who are behind on their mortgages and sell the home later after a market rebound, that strikes me as acceptable and fair.So I need help understanding why we should be cheering for the underwater homeowners in this situation.

 

“Falsus in uno, falsus in omni”…damn str8YAY for Spinner

Posted by otto | Report as abusive
 

OneEyedMan – it looks like Ms Yano-Horoski was trying to suggest ways for her to make good her payments through simple adjustments to the loan. That would be in the best interest of the bank because foreclosures and associated costs are bad for the bank and some simple paper-pushing would avoid all that.Banks should see foreclosure as the very last resort, not the first and only option. If that occurred across the board the foreclosure sales volume would reduce which in turn would help stabilise the real estate market.What the judge has achieved is a victory for common sense.

Posted by Tiny Tim | Report as abusive
 

Shouldn’t it be “offer by Defendant’s daughter” and “income of Defendant’s husband and daughter”? The sentence doesn’t seem to make much sense otherwise. Presumably, Indymac doesn’t have a daughter or husband.

Posted by a | Report as abusive
 

a, yes, it should, the judge occasionally confuses Defendant and Plaintiff, probably because it’s rare for a judge to sentence a Plaintiff rather than a Defendant.

Posted by Felix Salmon | Report as abusive
 

I dont see a single way that this is a good thing. Rewarding people for spending more than they could afford and then trying to cut a deal later when they realized they couldnt afford it. The house should have been foreclosed on so that the bank could recoup some of their losses, if trends like this continue we are in for an even worse finacial crises than now. The writer of this article is an absolute fool or a commy.

Posted by Joe | Report as abusive
 

Joe, you need to stop listening to the Phil Gramms and Glen Becks of this world and develop some economic sophistication.The deleveraging that needs to take place is going to happen, one way or the other. The essential question is upon whom it falls.The lesson here is that to survive this deleveraging, we all need to come together and do this equitably and sensibly and in good faith. And that banks – or whoever – who don’t operate in good faith, need to be forced to pay a penalty, for the benefit of the entire economy.

Posted by RN | Report as abusive
 

This judgement will be reversed on appeal. Regardless of what the judge thought about the plaintiff’s conduct, it is still a legal debt and the defendant has the obligation to pay it.If this were to become a trend, we would all pay the price because lenders will become reluctant to loan and increased risk will be accompanied by increased fees and rates.This is just another case of less-responsible people reaping rewards for poor conduct.

Posted by Waterman | Report as abusive
 

Tiny Tim, what you say was true a few decades ago, when the local bank originated the loan and then kept it on its books. It made sense, in that case, for the bank to modify the loan so that it received more than it would in a foreclosure. But does that still hold? Look at the quote – there even seems to be some uncertainty over who currently holds the note! How likely, then, is it that there is some entity that has both the motivation and the authority to adjust the terms?

Posted by Ken | Report as abusive
 

If the defendants had done what IndyBank did to them, they would have faced criminal charges for fraud and perjury. The bank told the court they were owed over $500K, when the amount was actually under $300K (they eventually admitted that, but it’s still perjury, and probably falsifying evidence). They also said the borrower had defaulted on a forbearance agreement, even though the bank didn’t send the agreement until after the payment was due.This kind of abuse is criminal, and the bank employees who tried to extort the borrower should feel lucky they aren’t in prison, and instead have only lost their employer’s money. Not that they care.

 

First and foremost, let me point out the pretentious bablings of this author. Nothing irks me more than to see a writer overuse grammar to appease their own ego.That aside, no justice whatsoever has been serverd here. The Plantiff should be charged with theft and misuse of the courts. People tend to forget that a house is an investment and you are not always guaranteed ROI on investments. This is a risk you take when you sign on the proverbial “dotted line.” I’m all for banks working with borrowers to try to save their home, but if you look at the redefault rate on loan modifications you will clearly see that most of these people shouldn’t have been issued a mortgage to begin with..Banks fault, yes, but EVERYONE should understand the risks when they purchase a home. Whoa is me..Bologna!! Man up, take responsibility for your actions and try to learn from your mistakes. That statement can be applied to many aspects of life in general, but we have to start somewhere.This ruling is disgusting…

Posted by James | Report as abusive
 

KUDOS TO JUDGE SPIINNER-A TRUE AMERICAN HERO!!!!The bank got exactly what it deserves. They made fees on originating the loan, selling it thru the securitization process and I am sure that by now have been paid in full thru CDS insurance.That wasn’t enough! These greedy financiers wanted to put this family, who by the way apparently attempted to work things out with them on the street to further enrich the taxpayer bailed out institutions.I wish more of the judges across the land would follow Judge Spinner’s lead and stop cold any bank that violates the laws and acts in bad faith. Only thru the actions of the judges with foresight this crisis will come to end.After all this is country of government for the people by the people and not by the law breaking, fraudulent scheming bankers!

Posted by Bill Kay | Report as abusive
 

P. S.KUDOS TO REUTERS FOR HAVING GUTS TO RUN THIS STORYAND CALLING JUDGE SPINNER A HERO!!!!GO REUTERS!!!!!!!!!!!

Posted by Bill Kay | Report as abusive
 

I agree with James, what a terrible and dangerous ruling. The mortgage crisis was due in large to borrowers taking out loans they could not afford to repay. Now this judge comes along and bails out someone who stopped paying their bills, thereby encouraging more of the same risky behavior. As usual, the people who do pay their bills and meet their obligations get screwed.This dangerous judge needs to be thrown off the bench.

Posted by Nathan | Report as abusive
 

Whilst it might be very satisfying to see a scurrilous bank humbled in a court of law and it is evident that the Plaintiff’s actions were unconscionable throughout the process, one must question both the legal precedent here being established (if not overturned on appeal) as well as the wisdom of granting the defendent a judgement worth considerably more than they could have hoped to achieve through their desired mediation. The judge might have done the defendents a better favour by mandating a more equitable settlement than by venting his ire upon the hapless Ms. Dickinson, as I suspect a more sober second court may indeed restore to the bank some mortgage rights – albeit at a level that appropriately penalizes their egregious conduct.

Posted by Stephen | Report as abusive
 

For all the people upset with the ruling, haven’t you heard of punitive damages? What the bank did went way beyond normal foreclosure proceedings, and they deserve to be punished for it. Not everybody who can’t make their mortgage payments deserves this kind of reward, but if this kind of egregious behavior is not addressed with enough of a penalty, it will continue to happen.

 

Try this:During the housing boom, lenders passed around mortgages as if they were whiskey bottles at a frat party. Notes were lost, destroyed, sold into multiple pools. Mortgages were not recorded and exorbitant fees were collected by the big firms on Wall Street.Now that the bubble has burst, “lenders” are trying to collect on loans they do not own, in most cases never lent a dime on the transaction, have no right to, or were paid 30 times over in bailouts, insurance, credit default swaps, etc.They are doing this because they can. They are steamrolling the courts rocket dockets because hardly anyone is contesting their foreclosures. Think about it. If you could go into a court and file thousands of foreclosures a week, and only a mere 10% challenged the authority of the foreclosing entity, what would you do if you were the greedy bankster?The crises is even worse in non judicial states…In almost every case these pretender lenders do not and did not own the loan. Almost all loans during the boom were securitized and it was investors that put up the money. Not the banks.Now these “pretender lenders” are trying to steal the homes by filing fraudulent assignments, by the thousands, to process the foreclosures.Don’t believe me? See for you yourself.http://4closurefraud.wordpress. com/

Posted by Deontos | Report as abusive
 

And this……WAKE UP!!The same Indymac Bank in a California case:Xhttp://www.courthousenews.com/2009  /11/23 /Bank_Won_t_Quit_Demands_on_Elderly_Wid ow.htmFrom Court News:Tuesday, November 24, 2009INDYMAC INTENT ON FORECLOSING ON 89-YEAR OLD WIDOW, DESPITE TWO COURT ORDERS TELLING THEM TO STOPIn Oakland, California, Courthouse News Service reports:* Indymac Bank and its successor, One West Bank, keep trying to foreclose on an elderly widow’s house despite two court orders telling them to stop, the 89 year-old woman says in Alameda County Court, Oakland. She says stress from the repeated threats of foreclosure made her husband depressed and may have contributed to his death.Irene Jones says foreclosure proceedings on her Oakland home were halted twice, first by an order restraining Indymac from foreclosing in February 2008, then by a second order invalidating Indymac’s foreclosure proceedings in March 2009. Nonetheless, Jones says Indymac and One West notified her they would begin foreclosing again in October.CASE FILE: Jones v. One West Bank F.S.B., et al.Xhttp://www.courthousenews.com/2009/1 1/23 /ElderHouse.pdf

Posted by Deontos | Report as abusive
 

Why are people cheering for deadbeats getting a gift from a reckless judge? it may be the case that the mortgage terms were harsh but no one put a gun to their heads to sign the papers. It is about high time where people face up to their own actions as well and not get a free pass because some idiot judge think so. This won’t fly and if it does, it is the rest of us who ponies up later on with Fed bailout of banks. The judge wiped out the debt, essentially giving $500,000 to the couple for free…ridiculous. I hope the bank appeals and wins.

Posted by idbtc123 | Report as abusive
 

I heard about this issue on the evening news and read the full article here.In reading some of the postings, I see that some people fail to see that what happen here is that someone stood up for the small guy against the bully. This people were trying to do what was right while the bully (bank) wanted only to beat them up and take away their property.this is why I and others are rallying behind the judge who stood up to the bully and said go and leave them alone because of your actions you have no claim here.

Posted by jose | Report as abusive
 

It is insane to call him a hero, this judge should be disbarred!Just like this administartion rewards the irresponsible, this judge sets a terrible precident for people wanting something for nothing.A better decision on his part would have been to work with the bank and adjust the mortgage rate to a reasonable rate. Instead he rewards an irresponsible home buyer for taking out an adjustable mortgage, he could not afford! This is what caused the housing crisis to belign with and this judge perpetuates the situation.Are there any politicians and/or judges left in this country who have the ability to reason and make fiscially sound decisions?God bless America!

Posted by Evelyne Mitchell | Report as abusive
 

Evelyne, you are missing the point by labeling the borrowers irresponsible.Last I checked, it is the banks in this country that control the capital, not the borrowers.In their insatiable greed and desire for the securitazible products, the banks behaved irresponsibly by handing out loans to questionable borrowers.Now, along with investors world wide, they are getting their just “returns”.From the beginning of time, whenever lenders act irresponsibly, chaos follows them in short order.The U.S. lenders were the primary enablers and are the ones primarily responsible for the mess that has crippled most of the industrialized world. ISN’T THAT OBVIOUS?Finally one of them got a just reward and I know that there are lots more to come……..Most lenders have abused the lending and now foreclosure process and the people must rise and demand just remedies including a punitive damages in some cases. Unless the offenders are properly punished, the process will continue to be abusedKUDOS TO THE REPORTER, THE JUDGE AND ALL THE RIGHTEOUS PEOPLE THAT STARTING TO RISE UP AND MEET THE UNCOUNCIONBLE BEHAVIOR OF THESE DUMB LENDING INSTITUTIONS!!!

Posted by Bill Kay | Report as abusive
 

You can guess who will end up paying the house for the Yano-Horoskis. Obviously, it’s a good deal for the Yano-Horoskie, but not necessarily for others.

Posted by pepper | Report as abusive
 

I am so proud of this Judge. We live in South Florida and want to contribute to his campaign. Finally, someone who takes up for the people. In fact, perhaps he should run for President so we can replace this repulsive corrupt America trashing Obama. Since this man has taken office, the hard working American people have been beaten down, insulted and laughed at by other countries. Credit card companies (banks that got bailouts)have been given the green light to screw people too! Judge Spinner– you have our vote. I hope more judges do what you have done!

Posted by Christine Gerk | Report as abusive
 

All you people for the banks need to wake up.Do you really think twenty million homeowners gathered around the kitchen table one night and said let’s take down the entire financial industry, the entire US economy? NO.I understand that you have been programmed to believe that the homeowners caused this but if you really take a step back and look at this there is no logical way that that could of happened.I challenge any one of you to go to this link and make your argumenthttp://livinglies.wordpress.com/ 2009/11/24/how-do-you-know-youre-right/W e are watching for your responses…4closureFraud1-561-880-LIEShtt p://4closurefraud.wordpress.com/

 

so funny, deadbeats for Judge Spinning!

Posted by pepper | Report as abusive
 

I second that motion, Spinner for President!!!Thank you Christine.

Posted by Bill Kay | Report as abusive
 

Now here\’s a judge who adjudicates fairly!Hmmmmm, an elected judge who is adjudicating foreclosure cases with an eye towards conduct of both parties involved? I suspect a windfall shoe-in for Judge Spinner in an age where in excess of 3.5-4 million American foreclosures are slated to occur each year until 2014.Every week I trot myself down to the local foreclosure court, observing the thousands of families dispossessed of their property (aka: the only housing option available in many cases) without even showing up to defend themselves. Why? Could it be because they\’ve been bullied into submission, convinced they have no rights and deserve to be rendered homeless?I review the files (public record) and see the non-existent, incompetent, or outright fabricated documents (some actually have white out lines drawn over inconvenient information). Legally, most of these foreclosures are completely unfounded and without a shred of evidence proving the foreclosing bank\’s right to initiate the action.What\’s the end game? Millions of empty houses lining streets wandered by millions of homeless families? Do we agree to accept this as a reasonable option for these mislabeled \”deadbeats\”?What about the soul of our country?www.ForeclosureHamlet.org

 

Justice Spinner should be congratulated. I have read the entire decision and find it to be well thought out, and hope that it is sustained on appeal.While it is beyond dispute that creditor(s) are entitled to payment, a fact alluded to in Justice Spinner’s order, the creditors conduct should be beyond reproach. In this case, the creditors could not even state, with any degree of certainty, what the outstanding principal amount was. Further, the debtors were more than willing to repay the debt. It appears that the creditors did everything they could to not accept that payment.Should the original loan have been made? That question lost its relevance when the loan documents wre signed. ‘Due Dilligence’ was the responsibility of the original lender, and, upon their purchase of the original lender’s assets, each of the successors.For far too long, the banking industry, perhaps with the approval of regulators, has taken unjustifiable risks and offset their losses by increasing fees, interest rates and penalties. The conduct of these institutions, especially the largest of them, is disgusting (try being a day late on your payment). They have received hundreds of billions of dollars in bailout money (read: handouts) from the taxpayers, yet have refused to alter their behavior. While they are all guilty of these practices, the case before Justice Spinner was especially disgusting.The economic crisis facing the country was a direct result of the banking industry’s practices. It will only end when that industry accepts responsibility for those actions and works towards an equitable settlement.

Posted by CaptDan | Report as abusive
 

Permalink: Was there no Due Dilligence responsibility on the part of IndyMac? Or on the part of those who bought these ‘CMOs’? The financial institutions chose to ‘shoot dice’, and in this case, lost.To call these people ‘dead beats’ is to ignore both the facts and the conduct of the suceeding creditor(s). They were not seeking ‘something for nothing’. Indeed they made more than fair offers and even found third parties to guarantee the debt. It was the creditor who would not accept the offers, who agreed to restructure the debt and then sent the agreement after the first payment was due (so as to force a default).This conduct is repulsive and Justice Spinner’s judgment was correct. I hope that it is upheld on appeal, and that other institutions take notice.If I still lived in Suffolk County, I would, without a doubt, give his honor my vote.

Posted by CaptDan | Report as abusive
 

Leaving aside the “root for the underdog” and “punish the evil banks” mentality, it seems there are two relevant facts in this case. First, the bank sent a Forbearance Agreement *after* the first payment date – and then claimed the defendant to be in default status. This is hardly a sign of good faith. Second, how in the heck can a bank *not* have a definitive amount owed by the defendant? If my bank wanted “somewhere between $283,992.48 and $290,687.85, but we’ll take the higher number” I’d be suing them as well. It appears there was a real vendetta against the defendants – not illegal under the letter of the law, but unethical in the extreme. It appears any offer to renegotiate was rejected out of hand, which is what probably led to this judgment. Bad precedent… yes. Did this get the attention of the plaintiff… judging from actions in other states, probably not.

Posted by Engle | Report as abusive
 

As a hard working, bill paying American who has made darn sure I could pay debt I incurred, this really rankles me. I’m sure that when they received the hundreds of thousands of dollars of other peoples money they were happy. Whatever happened to the story of the grasshopper and the ant! Looking back through history, it’s not very pretty when grasshoppers rule. a.k.a. French Revolution.

Posted by Michael | Report as abusive
 

Both the institution providing the loan and the people receiving the loan bear responsibility in this case. In this case, the borrower appears to have been honest in all their dealings, and wished to work with OneWest. OneWest, which took millions from us, the taxpayers, to cover their portfolio losses, appear to have acted in bad faith and committed perjury. This family did not go to court to get a handout. They went to court to see if they could amicably work out a way to restructure their mortgage after every other attempt had failed. The judge, seeing through the subterfuge of OneWest, reacted by awarding punitive damages to the homeowner as a warning to other financial institutions.For all those who consider this family a bunch of deadbeats, think about this: all those people who work at the financial institutions and who created this mess are not losing their houses, nor are they being held accountable for the actions which created this debacle. Instead, the institutions are considered “too big to fail”, and the people working there are allowed to continue to draw their six- and seven-digit incomes while we, the taxpayers, are forced to cover their losses.I am reminded of the parable of the head servant who was forgiven a large debt by his master, only to go to another servant under him and demand full and immediate payment for a small debt. When the master, who forgave the large debt, discovered the actions of the head servant, the head servant was punished. Justice is served.

Posted by Jim Vindal | Report as abusive
 

I find it hard to believe that people are cheering the end of the rule of law. America is clearly in decline because of this marxist movement. Before you know it our way of life will be gone.

Posted by Alex | Report as abusive
 

I appauld him. I can tell you from personal experience the banks DO NOT deserve one dollar of our taxes. I did a lease purchase. The guy did not pay. I had to get a lawyer to get him out.I got a real estate agent ,found a buyer,was selling the house for what I owed, The house was going into foreclosure. Thr banks was working with our qualified buyer for 2 weeks and at the last minute foreclosed!!! .The loan would have been paid off.I was the one walking away with nothing except my credit.Banks are ruthless

Posted by Ruth | Report as abusive
 

I say were is the money ?What I want for Christmas is not the world peace , I want my home back ! I am 58 and all my money went into my home. I am losing my home after 25 years of living in this AMERICAN DREAM, BUT who cares ? I do .I want FOR THIS CHRISTMAS UNDER THE BIG TREE the person who is responsible for millions of people like me over 55 WHO ARE LIVING THE GREATEST AMERICAN GLOBAL NIGHTMARE . After all we were able to catch all the criminals who distroyed lifes of millinos people in some strange country and we are even got Polanski after 35 years of hidding from us why can we get this one too ?In this case I wander if our justice system will be able to fit the crime with the punishemnt or the punishemnt with the crime .either way i want to see who did it , why and whre is the money. In MY opinion this Christmas night will be the worsed I have ever experienced in 58 years of living in this country. I belive that millions of people will have no homes , no Christmas trees and gifts for their kids . After all we have to save for our gran-gran-gran-gran and we have to suffer for the ” idiatic ” formulas our bankers come up with and their fancy colleges , universities they graduated from with degree in ” HOW TO F>>>>THE LITTLE PEOPLE “.HOW MANY SENATORS, GOVERNMENT PEOPLE , BANKERS , CONGRESS PERSONS , MILLIONERS, BILLIONERS WHO SUFERR SO MUCH , ACCORDING TO THE BULL….WE HAVE TO LISTEN TO HAVE LOST THEIR HOMES , JOBS , MONEY AND THEY ARE ON THE STREETS ? ILKE TO KNOW ? CALL ME STUPID, CALL ME EVIL BUT I WANT TO KNOW WHO , WHERE , HOW , AND WHY ?

Posted by JULAI 7534 | Report as abusive
 

Jim Vindal, @ November 26th, 2009 8:07 pm GMT, is spot-on. All the commenters outraged at ruling seem to care about moral hazard and “rewarding bad behavior” only when ordinary persons are the ones behaving badly. Ordinary persons who took out loans in the past decade or so have not been acting any differently from how they did in the history of mortgage markets — people who wanted a home took the best mortgage that a bank would offer them. What has changed is that lenders and those buying mortgages from lenders have become reckless. In any individual dispute, both lender and borrower share responsibility, but at a systemic level, it is the changed behavior of lenders and securitizers of debt that has caused the economic crisis and has put taxpayers on the line for billions of their losses.Sure, ideally, the Yano-Horoskis would still owe they money they owe, and the bank would be ordered to come to an amicable repayment agreement. Perhaps more important than whatever this particular family still owes on this particular loan and what the particular terms of repayment that this particular bank is made to accept, however, is that the bank face criminal charges for fraud and its representatives criminal charges for perjury, as well as the bank facing punitive civil damages.

Posted by Jason | Report as abusive
 

I don’t think the decision will hold up. The owner of the note advanced the money and has a right to collect. However, there should be a way to punish the bad behavior of Indy Bank and its lawyer. Like maybe making them responsible for all or part of loan.The real loser is most likely Freddie or Fannie Mae and ultimately the taxpayer. I think the banks should be obligated to meet with the borrower and make a good faith effort to modify a loan in the best interests of loan owners and home owners. It would save the banks, GSEs and Investors significant amounts of money.

Posted by William Campbell | Report as abusive
 

All the pro-corporate anti-consumer comments above make me shake my head in disbelief at the arrogance and smugness of those writers who have not had to do battle against a gigantic, secretive corporate entity. Please be sure to share with us how your attitude changes when it’s your turn in the fire.A friend of ours (I’ll call him James), permanently disabled in a head on crash caused by an uninsured drunk driver, was sued for insurance fraud BY HIS OWN INSURANCE COMPANY (think little green limey lizzard). After five years of utter hell the case finally came to trial and on the fourth day was thrown out of court when the Judge said there was not one scintilla of evidence against our friend. Joe then counter sued the company and won a large financial settlement.These two cases prove that sometimes the system does indeed work for the unjustly persecuted.

Posted by Patti Grant | Report as abusive
 

My post, immediately above, inadvertently mentions two fictitious names–James and Joe. James is correct.

Posted by Patti Grant | Report as abusive
 

Wow. The professional deadbeats get a free house. That’s the bottom line fact. The court ruling said that less than ONE year after taking out the mortgage the Horoski’s stopped paying. And NEVER paid anything again for the next FIVE years! Can you believe it! No wonder the bank didn’t want to modify the mortgage. I wouldn’t have either.The Horoski’s showed their true deadbeat colors and the bank was on to them and knew that they would just repeat the cycle and get a few more FREE years in the house. Naturally, they came up with a story of having alternate financing in place at the beginning of this year when the noose was finally tightening around their necks, but I’m not buying their story and the bank said they didn’t believe it was a valid offer either. Frankly, at that point, the Horoski’s had zero credibility.I used to manage apartment complexes and I have seen numerous professional deadbeats who ride out the legal system as long as they can for what amounts to a free apartment and then move on and rip off the next landlord. The Horoski’s are giving off that same distinct aroma.

Posted by DaveinPhilly | Report as abusive
 

Next thing you know, Judge Spinner or a judge like him, will give someone a free car because that car owner had to suffer mental anguish when the bank sent the repo man who came and got their car in the middle of the night.Bleeding heart liberals like Salmon don’t really have a grasp of the concept of a slippery slope or unintended consequences. When government uses the heavy hand to force loan modifications when the lender doesn’t want to, then the rule of law is violated and our capitalist system is finished.

Posted by DaveinPhilly | Report as abusive
 

for people siding with the bank… did you actually read this article? Seems oblivious in several points who was taking advantage and who was being attempted to have advantage taken of them.

 

4christsake…that’s your problem, you read the article and didn’t read the ENTIRE court ruling itself. Do thorough due diligence next time, OK?The judge repeatedly misidentified the plaintiff and defendant in his written ruling. Something as simple as that, and not get it straight, is very revealing. I think we have reached the stage where the lower courts are to be easily dismissed due to judges legislating from the bench. The REAL court system seems to start at the appeals level.

Posted by Davein Philly | Report as abusive
 

The amount owed by the Horoskis was over $525,000Foreclosure started in 2005 with the borrowers only make 6-9 payments, that is with the $100,000 cash out.TAXES ARE OVER $1,000 a monthSo Yes, so approximately 52 months of back payments at an average of 10.50, plus $1000 real estate taxes,homewoners insurance, penalties and fees plus the original $295,000 that was interest only–that is $525,000.So basiclly they used the $100,000 CASH OUT to make the few mortage payments they did.PLEASE GO TO ZILLOW–They post the values from the accessors office. HOUSE is worth OVER $500,000Taxes are over $12,000 a Year.3400 square ft house –50 minutes from ManhattanBought 15 years ago for $200,000The Judge believed it was now worth $250,000-according to what I have read.That is what the daughter deemed as fair market value.Market did not crash that much that in one of the most desirable real estate locations, values are back to 1994.No way, by her job and age she could afford on her own to buy a house over half a million.Of course, IndyMac would reject her offer to buy for half-price.Posters favoring IndyMac–let me know when your home is being listed for half price–NEVER!!!!Plus why should a house be sold back HALF PRICE TO the family that defaulted.If Banks are going to be FORCED TO SELL at HALF THE MARKET VALUE, the 1.3 Million Men and Women that serve our country with young chidren should be first in line to benefitBut daughter plans on going to medical school in two years, according to her web posts. Would have been hard for her to support a half million dollar house while attending medical school, so that is possily why her offer was so low.Showed good faith to a Judge that was so Pro-Defendent, and let her not be tied to a mortgage when attending medical school.THOSE THAT FEEL INDY WAS NOT RESPONSIBLE:1) Borrowers had been in house–rent free–it appears since 2005.2) 25% offer of their income (INCOME) is not known.But if it was $5,000 monthly, 25% would be $1,250–that would leave $50 to go towards Principle and Interest of Debt of $525,000.Other 1,200 would need to go to Real Estate Taxes and Hazard Insurance.Would you take back seller financing on Half a Million dollars for approximately $50.00I will admit the $5,000 is a guestimate–used salary.comEven if their income was double that–so $2500 would go towards 525,000 debt. Again taxes and Insurance would be $1200.$1300 is not enough to pay back $525,000.Plus if the Family Income was $10,000 a month–why was not even the real estate taxes paid.Life is choices and consequences.Judge Spinner should have his staff at the hospital, because it appears that even if you STOP MAKING MORTGAGE PAYMENTS 1 Year before your heart attack, you can still use medical issues as your excuse.What is fair, do all mortgage holders with medical issues that feel their mortgage payment does not fit into their budget, does the Court it??Sorry but back in 2005 when REAL ESTATE MARKET IS FLYING,after misisng 2 payments, the responsible action would be to sell the house and downsize. Living in a 3400 square foot house is not a guaranteed right.If I had $300,000 out of my house–$100,000 PLUS$200,000 (back real estate taxes and interest from 2005)along with more than 4 years living RENT FREE–I wouldnot be stating that dealing with Indy was like dealing with organized crime.To make that analogy Mr. Horoski must have experience dealin with organized crime. Also what is up with an English Professor acussuing the Bank loss mitagation repof “smoking crack.”The words crack and organized crime are not even used by me in conversation.Their neighborhood looks nice on the web, but their statments of CRACK AND ORGANIZED CRIME–are very, veryinteresting.”MAE CULPA,” is a phrase more Sub-Prime Borrowers need to embrace.

Posted by Betty | Report as abusive
 

The judge misidentified plaintiff/defendant exactly twice, in the same paragraph, referring to plaintiff’s daughter/husband. The rest of the opinion was fundamentally sound.The amount owed was nowhere near 525,000 (except, of course, in the flat out lies of the bank in question – read the opinion, at most it was 440k including penalties and interest, and there’s some question about that).Fundamentally, the court did the right thing – there is an obligation in equity cases to refuse to grant a judgment in favor of someone coming before the court who has engaged in their own unclean behavior (like, for example, lying to the court or attempting to use the legal system for unethical or illegal purposes – for example, to enforce a default against someone without any chance on their part to make good, or LYING TO THE COURT). As such, under no circumstances was a foreclosure going to be the result. Voiding the debt was an unusual response, but not outside the scope of the court’s abilities in equity; if you look at the opinion, the rationale behind the choice of that sanction against the unclean plaintiff is fairly simple. Dismissal wouldn’t prevent another attempt to enforce their unfair prosecution, and monetary sanctions provide an inadequate penalty. Equity is best defined as the judgment that is “in the best interests of justice”, and here the interests of justice were best served by dismissal of a debt whose debtholder used unfair, unethical, and illegal tactics.

Posted by jl | Report as abusive
 

I personally find it very interesting that no one has brought up the fact that the Judge’s mortgage is serviced by Indymac/OneWest Bank. Can we say conflict of interest?

Posted by Andy Dufresne | Report as abusive
 

Part of the Credit Cardholders’ Bill of Rights Act signed by president Obama attempts to limit risk for individuals under age 21. To protect lenders, people under that age must have a co-signer involved in the credit or loan process, or the total amount borrowed cant be more than 20% of the individuals income. The main issue with using credit cards is the amount of interest that can add up over time, more education for students about the credit card cycle is needed, so that no one falls into a situation that requires bankruptcy.

Posted by Anonymous | Report as abusive
 

We have indymac/onewest as a mortgage company and they are very scary people. We have never been late on our mortgage for over 15 years. My husband and I were both laid off from our jobs and we made payments not more than a week late. Well, Hell Hath No Fury as a borrower paying the bank a few days late. We received upwards of ten phone calls from them in one day asking where the payment is and we could lose our home to foreclosure if we don’t pay up. My stomach really starts to hurt a lot lately. The circumstances are beyond our control but we manage to make our payments (I am no longer a supervisor, but work at Wendy’s and my husband pumps gas until we find better paying jobs). They try to use scare tactics on us which work really well. Our home is worth four times more than what we owe on our mortgage and it’s very scary that they could take it away in a heartbeat. We don’t sleep well, we don’t eat well, we’re starting to look like crap and we have two kids in college. They won’t do a loan modification we are not behind (although they treat us as if we are because of a payment being late a few days). I applaud Judge Spinner and hope to see more rulings like his. As for you people who think just because a person cannot make a payment on time they should be considered a deadbeat, I hope there comes a time when you cannot make a payment. Walk a mile in my shoes!

Posted by FedUp | Report as abusive
 

For those of you who have not had the “pleasure” of dealing with IndyMac/OneWest bank, please keep your comments to yourselves. IndyMac/OneWest are crooks, plain and simple. We made our payments on our construction loan every month and on time. Our payment doubled at one point, which no one can explain why. When we finished construction on our home IndyMac never converted our loan from construction phase to a mortgage loan. WE signed for a 1 time signing and interest rate of 4.75%. WE never heard from IndyMac. We sent letters, we sent certified letters, we called. Nothing has happened and now they say we have defaulted on our loan for the “Vacant Property”. WE have been living in our home for 2 years. Everytime we call, we get the runaround from someone who has no clue about our loan. WE are told someone will call us back, we never hear from a soul.
IndyMac/OneWest bank should be sued and sued big time. OneWest back “purchased” the assest of IndyMac for pennies on the dollar. I should have the same consideration to purchase my loan from them for pennies on the dollar since OneWest bank did not “loan” us the money.

Posted by torrie | Report as abusive
 

I am at a loss trying to understand the willful ignorance of those who support the bank in this lawsuit. The operative issue here is that the Plaintiff could not adequately prove that they owned the underlying debt!!! Do any of you think that it is fair or right for someone- be they bank or borrower to march into court and try to collect a debt that is not owed them???

Posted by bill-s | Report as abusive
 

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