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Out in Suffolk County, Judge Jeffrey Spinner must be really pleased with himself. This week, he cancelled—cancelled—$525,000 in mortgage debt a delinquent borrower owes a lender seeking to foreclose. The New York Post says the judge didn’t approve the “harsh, repugnant, shocking, and repulsive” collection tactics employed by the lender, OneWest (a successor to IndyMac), and said the company’s conduct was “inequitable, unconscionable, vexatious, and opprobrious.” The judge seems to buy his adjectives in four-packs.
But notice the judge didn’t say “illegal.” Idiotic rulings like this are what make an already tough environment for mortgage lenders even more difficult.
This isn’t complicated. A mortgage is a legally binding contract. Both parties to the contract should expect that a judge will uphold the contract’s terms if they are challenged in court.
But Judge Spinner didn’t do that. Instead, he tossed the mortgage aside, for no legally defensible reason. Thus he added an new element of uncertainty into the mortgage business. OneWest will now have to needlessly spend additional money to appeal the ruling, and will surely win. It will take back the house a little later than it would have, and will likely realize a little less value upon its disposition. All of which, if you add up events like this many times over, makes mortgage debt a tad harder to get and a tad more expensive. And for what?
In making his cockamamie decision, Judge Spinner surely must have felt some smug, self-satisfied sense that he was “speaking truth to power.” Baloney. In this case, Spinner was the one with the power. And by nullifying a perfectly legitimate contract, he’s abused it.
What do you think? Let me know! |