Another Crazy Borrower Defense Shot Down: The Broker Told Me…


1 September, 2015


Mortgage Lender and Servicer Alerts

Most of the time our alerts are devoted to lamenting the unfortunate circumstances, rulings and pitfalls that impede, upset or defeat the foreclosure process.  Sometimes, though, borrower defenses are seen by the courts as transparent and so are rejected.  This is so in a recent case – although here the lender lost on some other issue – a story perhaps for another day.  [See, Meikle v. Fremont Investment & Loan Corp., 125 A.D.3d 616, 3 N.Y.S.3d 393 (2d Dept. 2015).]

Lenders and servicers are aware that borrowers often seek to attribute their travail to others.  Sundry people told them this, misled them about that, promised various things and on and on.  And so it was in this case.

Among their defenses, the borrowers alleged coercion and negligent misrepresentation.  It might have been that coercion and/or negligent misrepresentation existed (a conclusion that was never reached by the court).  But the accusation of such conduct was made by the borrowers against real estate and mortgage brokers involved in the transactions.  These brokers, though, were employed by other defendants (the borrower was suing the lender and others in this case) and the was no evidence that these brokers were acting as agents for the lender or that the lender knew anything about the alleged misrepresentations or coercive statements made to the borrowers by these brokers.

The defenses were dismissed.  Chalk this one up in the lender’s column.

Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2017), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.