Homeowner Gets Free House after IndyMac Bank Fails to Mediate in Good Faith

Daily Business Review, writer Vesselin Mitev reports that Suffolk County, N.Y. Judge Jeffrey A. Spinner, has judicially canceled the mortgage on homeowner Dana Yano-Horski’s home. The action was taken to sanction the lender’s “Unconscionable, vexations and opprobrious conduct” in its attempt to foreclose on the property.

Under applicable state law IndyMac was required to mediate with the homeowner before competing a foreclosure action. Judge Spinner was quoted as finding it “deeply troubling” that IndyMac spurned what would have been a “win-win” solution for all parties. Instead of negotiating the bank engaged in “harsh, repugnant, shocking and repulsive” treatment of the homeowner.

After the homeowners attempts to obtain mediation Judge Spinner ordered a bank representative to attend a mediation conference in September. At the mediation IndyMac loss mitigation manager Karen Dickinson “made it abundantly clear that that no form of mediation, resolution or settlement would be acceptable” to the bank.

The bank asserted that the borrower had previously defaulted on a forbearance agreement. The Court found that IndyMac never sent out the forbearance agreement. Judge Spinner noted “Defendant, through plaintiff’s duplicity found herself in the unique and uncomfortable position of being placed in default of the ‘agreement’ even before she had received it.”

Judge Spinner did more than just dismiss the lawsuit. If the lawsuit was dismissed without prejudice IndyMac could have re-filed the lawsuit and repeated in wrongful conduct. Judge Skinner concluded that the original principal of $292,500 “should be canceled, voided, and set aside.” The Judges order bars any attempt to collect on the note.

The Foreclosure Lawyers at Shuster & Saben applauds Justice Jeffrey Skinner’s courage. In Florida several counties including Dade County, Palm Beach County, Indian River County, and Brevard County have implemented mandatory mediation when the subject property is the homeowner’s primary residence. In a significant number of cases, particularly when homeowners are unrepresented some lenders attempt to avoid mediation or fail to mediate in good faith. In both Dade County and Indian River County our firm has moved for sanctions against lenders who fail to mediate in good faith.

Shuster & Saben obtains Dismissal of Foreclosure Action

For Immediate Release:
The law firm of Shuster & Saben has obtained the dismissal of a foreclosure lawsuit filed against the firm’s Brevard County client. The Plaintiff / Lender filed suit against our client in an attempt of take their Cocoa, Florida investment property. In the subject action, after the lender drastically raised our client’s interest rate (to well over 8% A.P.R.), our client was unable to continue to afford to make monthly mortgage payments. Our client had financed the property with an A.R.M. (Adjustable Rate Mortgage) that was linked to the LIBOR index, and faced an increase in their interest rate after their initial rate expired. Despite the fact that interest rates declined from 2007 to 2009, the lender still raised the client’s interest rate to a point that it was no longer affordable. Several months after the client stopped making mortgage payments the lender filed a Notice of Lis Pendens and a Complaint for Foreclosure in the Brevard County Circuit Court.

The client consulted with several other Space Coast attorneys before choosing Shuster & Saben to defend the foreclosure action. After Shuster & Saben filed its notice of appearance and voluminous discovery requests the lender decided to dismiss the case and cancel the lis pendens. Counsel for the lender advised that the lender has decided to write off the loan. To view the actual Notice of Dismissal click here.