November 2009 Archives

Bank Sanctioned and Existing Mortgage Discharged

November 22, 2009

In a dramatic case, a Suffolk County judge has cancelled a valid and existing note and mortgage. During the course of a foreclosure action, the bank, Indymac Bank, refused to cooperate in reasonable settlement negotiations, engaged in misleading tactics, could not establish the amount that was owed, and demanded full payment of the loan or foreclosure of the property. The court found such conduct to not be in good faith, particularly because an outcome that would have benefitted both the owner and bank was possible under the circumstances yet refused by the bank. Finding the bank's conduct to be so egregious, the court cancelled the note and mortgage and barred the bank from ever again seeking to collect on the loan.