Success In The Kings County Supreme Court! Helping A Homeowner Who Got Scammed

We just won a heavily contested motion in the Kings County (Brooklyn) Supreme Court to allow a homeowner to file a late answer with defenses and counterclaims against his mortgage lender. Our client owns a mixed use property where he operates a day care center in Brooklyn with over 70 children, some of whom come from homeless shelters. He lives with his family upstairs, including 6 children, one of whom has cerebral palsy. He has alleged that he was placed in a balloon mortgage with a lender without being told the terms, that he was lied to at the closing and deprived of the opportunity to get a lawyer to explain the loan agreements to him, and that the lender’s closing attorney purported to represent the client/borrower as well, in what would be a clear conflict of interest. This does not sound unusual to me at all. I have heard similar stories often from clients and callers.

Later on, when the lender commenced a foreclosure action our client took immediate steps to get help. Long before he retained my firm, he retained an out of state consultant company. This is one of those companies that I have repeatedly blogged about and warned homeowners to stay away from. The company took a $3600 fee and told the client that they had legal counsel on staff to help him. Our client stated that the company did not help him or return calls. Ultimately, the lender filed an application for an order of reference in the foreclosure action – which is to have a referee appointed to compute the amount due and to grant a default in favor of the plaintiff lender. When our client retained my firm, I prepared and filed an answer with defenses and counterclaims but knowing it was already late, I also filed a motion to allow the late answer or to extend the time to file under CPLR Sections 3012 and 2004. Lender’s counsel opposed the motion. After oral argument last week, the court granted our motion and signed a short form order deeming the answer filed and served. Now, the lender has to reply to the counterclaims and I expect that plaintiff’s counsel will file a motion for summary judgment next, which we plan to oppose. This is the type of case that deserves some discovery. I’d love to depose the bank officers and people who handled the closing to ask them questions about this loan and the closing while they are under oath. We’ll see if I get the chance. Of course, we are trying to settle the case but so far the lender has been stubborn. Our client was very relieved but he is not out of the water yet.