Judge Eliminates All Past and Future Interest in a Foreclosure Lawsuit Due To Bank’s Bad Faith

October 25, 2014 By Elliot S. Schlissel

LaSalle Bank had brought a foreclosure legal action in the Supreme Court in Suffolk County. In its pleadings the bank claimed they were both the owner and holder of the note which was secured by a mortgage. The defendant in the case did not deny he had defaulted in making 4 mortgage payments. His default was directly related to the fact he was in jail. However, he brought an application to the court requesting all interest on the foreclosed home be eliminated. He claimed LaSalle Bank had unreasonably delayed the legal proceedings in the foreclosure action. They had requested numerous duplicative document demands.

Numerous Duplicative Document Production Requests

The case was heard before Justice Jeffrey Arlen Spinner sitting in the Supreme Court in Suffolk County. Justice Spinner found there were numerous duplicative document production demands. The homeowner had appeared 24 separate times for mandatory settlement conferences. Judge Spinner found LaSalle Bank had not complied with HAMP guidelines. In addition, he found they failed to negotiate with the homeowner in good faith. Justice Spinner found due to LaSalle’s bad faith and the bad faith of their servicing agents, all present, past and future interest on the mortgage in this foreclosure lawsuit was to be eliminated.

Conclusion

Banks need to cooperate to make the HAMP work or they will be punished by judges.