Court Rules Against Foreclosure
In New York a court ruled against foreclosure citing it to be an instance of predatory lending.
Like any other parent David and Karen Shearon had gone ahead with the purchase of their first house nursing the hope that their three children would be provided with security and stability. At that point it did not seem difficult because although the couple jointly earned about $30,000 they could make a down payment of $335,000 for the house on Staten Island in New York. But within a year the situation dramatically changed with phenomenal rise in interest rates. It was much higher than what they had been told. Soon a foreclosure notice was pasted on their front door. The server did not do the job quietly but tried to make it as uncomfortable as possible by shouting out the news that the Shearons are in foreclosure.
This was happening everywhere across the country. But here the lender was in for a surprise. The Shearons snarled back. So far it seems that foreclosure is retreating with its tail between its legs.
Last February a state trial judge of New York alleged that the lender had offended the predatory lending laws of the state. This is the first ruling of its kind in New York. Judge Joseph Maltese disallowed the bank permission to foreclose and ordered that the payments made towards mortgage by the borrowers together with legal expenses incurred should be returned. Noah Pusey, the legal representative of the Shearons aptly said that the case allowed the judge “reason to pause and consider” the current foreclosure climate not just here but across the country and the role of the mortgage industry in relation to it.
Tom Solferino the attorney for the bank denied that any predatory lending had taken place and it was a wrong reading of the application of the law. He admitted that predatory lending had been going on but his client had not resorted to it. In this case down payment had been made and it was all above board. The judge has agreed to give another hearing.
So far it has been an exceptional victory for the borrowers – the Shearons. Taking the cue many others are starting to fight off foreclosures in courts. James Tierney, former attorney general of Maine and present director of National Sate Attorneys General Program of Columbia Law School said that many judges are saying that a “fraud is a fraud, and we’re not going to let this proceed.”
