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Indymac Bank v. Yano-Horoski, 26 Misc.3d 717, 890 N.Y.S.2d 313, 2009 NY Slip Op 29491 (N.Y. Sup. Ct., 2009)- 1 -
26 Misc.3d 717890 N.Y.S.2d 3132009 NY Slip Op 29491INDYMAC BANK F.S.B., Plaintiff,v.DIANA YANO-HOROSKI et al., Defendants.No. 2005-17926Supreme Court, Suffolk County.Decided November 19, 2009.
Steven J. Baum, P.C., Buffalo, for plaintiff.Diana Yano-Horoski, defendant pro se.[26 Misc.3d 718]
 JEFFREY ARLEN SPINNER, J.This is an action wherein the plaintiff claims foreclosure of a mortgage dated August4, 2004 in the original principal amount of $292,500 recorded with the Clerk of Suffolk County, New York in Liber 20826 of Mortgagesat page 285. The mortgage secures an adjustablerate note of the same amount with an initialinterest rate of 10.375%. The mortgageencumbers real property commonly known as 8Oakland Street, East Patchogue, Town of Brookhaven, New York and described as district0200, section 979.50, block 05.00, lot 001.000on the Tax Map of Suffolk County. Plaintiff commenced this action by filing a summons,verified complaint and notice of pendency onJuly 27, 2005. The notice of pendency wasextended by order dated September 2, 2008 anda judgment of foreclosure and sale was grantedon January 12, 2009.Thereafter and in accordance with Laws of 2008, chapter 472, § 3-a, and in view of the factthat the loan at issue was deemed to be"subprime" or "high-cost" in nature, defendantseasonably requested that the court convene asettlement conference. That request was grantedand a conference was commenced on February24, 2009, which was continued five times in aseries of unsuccessful attempts by the court toobtain meaningful cooperation from plaintiff. Inview of plaintiff's intransigence in its continuingfailure and refusal to cooperate, both with thecourt and with defendant's multiple andreasonable requests, the court directed thatplaintiff produce an officer of the bank at theadjourned conference scheduled for September22, 2009.At the conference held on September 22,2009, Karen Dickinson, regional manager of loss mitigation for IndyMac Mortgage Services,a division of OneWest Bank F.S.B. (IndyMac)appeared on behalf of plaintiff. IndyMacpurports to be the servicer of the loan for thebenefit of Deutsche Bank which, it is claimed, isthe owner and holder of the note and mortgage(though the record holder is IndyMac Bank F.S.B., an entity which no longer is inexistence). At that conference, it wasceleritously made clear to the court that plaintiff had no good faith intention whatsoever of resolving this matter in any manner other than acomplete and forcible devolution of title fromdefendant. Although IndyMac had prepared atwo-page document entitled "Mediation Yano-Horoski" which contained what purported to bea financial analysis, Ms. Dickinson's affirmativestatements made it abundantly clear that no formof mediation, resolution or settlement[26 Misc.3d 719]would be acceptable to plaintiff. IndyMacasserts the total amount due it to be in excess of $525,000 and freely concedes that the propertysecuring the loan is worth no more than$275,000. Although Ms. Dickinson insisted thatMs. Yano-Horoski had been offered a"Forbearance Agreement" in the recent pastupon which she quickly defaulted, it was onlyafter substantial prodding by the court that Ms.
Indymac Bank v. Yano-Horoski, 26 Misc.3d 717, 890 N.Y.S.2d 313, 2009 NY Slip Op 29491 (N.Y. Sup. Ct., 2009)- 2 -
Dickinson conceded, with great reluctance, thatit had not been sent to defendant until after itsstated first payment due date and hence,defendant could not have consummated it underany circumstances (defendant, through plaintiff'sduplicity, found herself to be in the unique anduncomfortable position of being placed indefault of the "agreement" even before she hadreceived it). Plaintiff flatly rejected an offer bydefendant's daughter to purchase the house forits fair market value (a so-called "short sale")with third-party financing. Plaintiff refused toconsider a loan modification utilizing any morethan 25% of the income of defendant's husbandand daughter (both of whom reside in thepremises with her), the excuse being that "[w]ecan't control what non-obligors do with theirmoney" (the logical follow up to this statementis, how does the bank control what the obligordoes with her money?). The court foundIndyMac's position to be deeply troubling,especially since a plethora of subprime loans inthis county's Foreclosure Conference Part havebeen successfully modified with the lender'sreliance upon the income of nonobligors whoreside in the premises under foreclosure. Theplaintiff also summarily rejected an offer byboth defendant's husband and daughter tovoluntarily obligate themselves for paymentupon the full indebtedness, thus committing theirindividual incomes expressly to the purpose of aloan modification. It should be noted here thatdefendant did not even request any waiver or"forgiveness" of the indebtedness aside fromsome tinkering with the interest rate, just amodification of terms so as to enable her torepay the same. It was evident from Ms.Dickinson's opprobrious demeanor andcondescending attitude that no proffer bydefendant (short of consent to foreclosure andejectment of defendant and her family) would beacceptable to plaintiff. Even a final anddesperate offer of a deed in lieu of foreclosurewas met with bland equivocation. In short, eachand every proposal by defendant, no matter howreasonable, was soundly rebuffed by plaintiff.Viewed objectively, it is apparent that plaintiff'sconduct in this matter falls within the definitionsset forth in 22 NYCRR 130-1.1 (c) (2), whichmight well warrant the imposition of monetarysanctions.[26 Misc.3d 720]On the court's own motion, a hearing washeld on November 18, 2009 in order to explorethe issues herein. At the hearing, Ms. Dickinsonappeared as well as Mr. Horoski. IndyMacclaimed a balance due, as of September 22,2009, of $527,437.73, which included an escrowoverdraft of $46,627.88 for taxes advanced sincethe date of default, but did not include attorney'sfees and costs. Plaintiff was unable to tell thecourt the amount of the principal balance owed.Mr. Horoski advised the court that according totwo letters received from plaintiff, the principalbalance was said to be $285,381.70 as of February 9, 2009 and $283,992.48 as of August10, 2009. Plaintiff stated that defendant musthave made payments though it was concededthat in fact no payment had been made. Plaintiff insisted that it had remained in regular contactwith defendant in an effort to reach an amicableresolution, that it had extended two modificationoffers to defendant which she did not accept andfurther, that due to her financial status she wasnot qualified for any modification, even underthe Federal Home Affordable ModificationProgram guidelines. Plaintiff denied that it had"singled out" defendant, simply stating that herstatus was such that she fell outside applicableguidelines. All of these assertions were disputedby defendant.That having been said, the court is greatlydisturbed by plaintiff's assertions of the amountclaimed to be due from defendant. The referee'sreport dated June 30, 2008, which has its genesisin a sworn affidavit by a representative of plaintiff (presumably one with knowledge of theaccount), reflects a total amount due and owingof $392,983.42. The principal balance isreported to be $290,687.85 with interestcomputed at the rates of 10.375% fromNovember 1, 2005 through August 31, 2006($25,118.62), 12.50% from September 1, 2006to February 28, 2007 ($18,018.66), 12.375%from March 1, 2007 to March 31, 2008($39,126.39) and 11.375% from April 1, 2008 to
Indymac Bank v. Yano-Horoski, 26 Misc.3d 717, 890 N.Y.S.2d 313, 2009 NY Slip Op 29491 (N.Y. Sup. Ct., 2009)- 3 -
June 24, 2008 ($7,700.24) totalling $89,963.91.Plaintiff also claims $20 in nonsufficient fundscharges, $295 in property inspection fees and$12,016.66 for tax and insurance advances. The judgment of foreclosure and sale dated January12, 2009 was granted in the amount of $392,983.42 with interest at the contract ratefrom June 24, 2008 through January 12, 2009and at the statutory rate thereafter plus attorney'sfees of $2,300 and a bill of costs in the amountof $1,705. Even computing the accrual of prejudgment interest of $18,299.18 (usingplaintiff's per diem rate in the referee's report)together with postjudgment interest[26 Misc.3d 721]at a statutory 9% through November 19, 2009(an additional $31,740.90), the application of simple addition yields a total amount due of $447,028.50. This figure is $80,409.23 less thanthe $527,437.73 asserted by plaintiff to be dueand owing from defendant. The court isastounded that plaintiff now claims to be owedan escrow advance amount of $46,627.88 when,under oath, its officer swore that as of June 24,2008 that amount was actually $34,611.22 less.Moreover, it now appears that the elusiveprincipal balance is either $290,687.85,$285,381.70 or $283,992.48.It is the province and indeed the obligationof the trial court to assess and to determineissues regarding credibility (Morgan vMcCaffrey, 14 AD3d 670 [2d Dept 2005]). Inthe matter before the court, the pendulum of credibility swings heavily in favor of defendant.When the conduct of plaintiff in this proceedingis viewed in its entirety, it compels the court toinvoke the ancient and venerable principle of "falsus in uno, falsus in omnibus" (Latin; "falsein one, false in all") upon defendant, which, afterreview, is wholly appropriate in the contextpresented (Deering v Metcalf, 74 NY 501, 503[1878]). Regrettably, the court has been unableto find even so much as a scintilla of good faithon the part of plaintiff. Plaintiff comes beforethis court with unclean hands yet has theinsufferable temerity to demand equitable relief against defendant.The court, over the course of some sixsubstantive appearances in seven months, hasbeen afforded more than ample opportunity toassess the demeanor, credibility and generalstate of relevant affairs of defendant andplaintiff. Although not actually relevant to thedisposition of this matter, the court isconstrained to note that defendant is afflictedwith multiple health problems which outwardlymanifest in her experiencing great difficulty inambulation, necessitating the use of mechanicalsupports. Moreover, defendant's husband, Mr.Gregory Horoski, suffers from a myriad of serious medical conditions which greatly impedemost aspects of his daily existence. Nonetheless,both of these persons, together with their adultdaughter who resides with them and who issubstantially and gainfully employed, receiveincome which they are more than willing tocommit, in good faith, toward repayment of thedebt to plaintiff and indeed, despite theirphysical challenges, they have appeared at eachand every scheduled conference before thiscourt. At each appearance, they haveassiduously attempted to resolve thiscontroversy in an amicable fashion, only to becallously[26 Misc.3d 722]and arbitrarily turned away by plaintiff. This hasbeen so even in spite of the court's continuing,albeit futile, endeavors at brokering a settlement.As a relevant aside, the scenario presentedhere raises the specter of a much greater socialproblem, that of housing those persons whosehomes are foreclosed and who are thereafterdispossessed. It is certainly no secret thatSuffolk County is in the yawning abyss of adeep mortgage and housing crisis withforeclosure filings at a record high rate and acorresponding paucity of emergency housing.While foreclosure and its attendant eviction areclearly the inevitable (and in some cases, proper)result in a number of these situations, the courtis persuaded that this need not be the case here.In this matter, defendant is plainly willing tomake arrangements for repayment and both herhusband and daughter are likewise willing to

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