Judge Establishes Equitable Doctrine of “In the Holiday Spirit”

8 Oakland Street -- Judge Rides Up On Silver Stallion to Rescue Homeowners

Last week, a Long Island judge erased a couple’s $525,000 mortgage debt just in time for Thanksgiving.  Awww.

Wait a minute . . .

The judge’s entire opinion is based on the fact that the bank’s representatives acted like a bunch of asshats in settlement negotiations.  The judge describes the bank’s actions as “inequitable, unconscionable, vexatious and opprobrious” because the bank would not negotiate, mediate or compromise in any manner and because the bank couldn’t get its numbers right.  Maybe so, but does that mean a judge can cancel a contract and wipe out the entire debt?  The judge noted that he could have imposed sanctions, but why bother.  Apparently, it is much easier to just fashion your own remedy.  Not surprisingly, the judge’s unpublished opinion cites only a handful of very old cases to try to justify his result.

Of course, Siouxsie can’t help but wonder about the judge’s motives here.  Is this judge a “nice guy,” who wanted to grant a family’s Thanksgiving wish?  Or, is he a savvy politician who understands the value of free publicity?  Notice how the judge set the hearing one week before Thanksgiving, and issued the six-page opinion the following day.  He knew what he was doing.  His opinion is now national news.  Moreover, the unpublished opinion by the judge includes his rant about the suffering of homeowners in his county due to the high rate of foreclosures on sub-prime loans.  So he is now a local hero.

What the media doesn’t say is that when this case is decided on appeal, the judge’s order may very well be vacated, and the family will be back at square one.  If the family loses their home then, Siouxsie bets that this story will not be picked up by the mainstream media.

Here is a link to a video in which the family decides to talk to the media about this.  Watch the video here. The daughter expresses her shock at the judge’s decision (perhaps not a good sign for the appeal).  She pretty much concedes that this is a crazy opinion, and but for a nice man, this outcome would not have occurred.  YIKES.  The clip is a good lesson as to why you should have your attorney handle the press or just say “no comment.”

For your reading pleasure the unpublished opinion is here:
Indymac Bank F.S.B. v Yano-Horoski

Extra credit:  Anyone know what the tax consequence of this ruling would be on the family?  Perhaps every silver lining has a cloud.

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~ by siouxsielaw on November 28, 2009.

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