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July 20, 2015 By
Bad Faith by Bank
Justice Silber, in her decision, found the actions and inactions by Deutsche Bank clearly indicated an absence of good faith as was contemplated by the New York Statute. During a period of ten months the bank delayed the underwriting of husband’s mortgage modification application. The referee found Deutsche Bank’s failure to act during a 10 month period was a dilatory tactic. Justice Silber concluded the husband had sought to obtain a mortgage modification for a period of 6 months. He had made 18 appearances at foreclosure mediation conferences. In determining the appropriate sanction to punish Deutsche Bank for its failure to work with the defendant in this case regarding his mortgage modification application, the court decided to reduce the interest rate to 2% on the balance of the mortgage which accrued after August 1, 2010. This was the date Justice Silber deemed the bank should have approved the husband’s HAMP mortgage application. In addition, the bank and its loan servicer organization were barred from collecting attorney’s fees with regard to the foreclosure lawsuit which accrued after August 1, 2010.
Conclusion
If a bank fails to negotiate in good faith mortgage modifications at foreclosure court mediation conferences, there are remedies available to the homeowner.