Brooklyn Judge Voids Foreclosure Forbearance Agreement; Sneaky Bankster Slicked Unrepresented Homeowner Into Signing One-Sided Deal

In Brooklyn, New York, Reuters reports:

• A Brooklyn judge has voided what she deemed an "unconscionable" forbearance agreement that required a mortgage holder to drop his legal defense against foreclosure proceedings in exchange for reduced payments that the judge said provided him "little, if any benefit."



• In a ruling dated January 6, Kings County Supreme Court Justice Marsha Steinhardt slammed the forbearance agreement struck between Brooklyn homeowner Jaime Arroyo and the company that bought his mortgage, Rossrock Fund II LP, saying the company and its counsel took advantage of the unrepresented homeowner to draft a one-sided deal.

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• "An examination of the terms of the agreement and the circumstances of its execution reveal a transaction which is ostensibly designed to ease the foreclosure process in favor of the plaintiff while affording virtually no benefit to Arroyo," Steinhardt wrote. "Under these circumstances, the court finds that the subject agreement is unconscionable and employs its equitable powers to rescind the agreement."



• Sara Manaugh, a staff attorney in the Foreclosure Prevention Project at South Brooklyn Legal Services,(1) said she had rarely encountered an agreement "so plainly calculated to divest the homeowner or his or her home."

For more, see Brooklyn judge rescinds unfair forebearance deal.

For the court ruling, see Rossrock Fund II LP v Arroyo, 2012 NY Slip Op 50048(U) (NY Sup. Ct. Kings Cty., January 9, 2012).

(1) South Brooklyn Legal Services is a non-profit law firm that provides a range of legal advocacy and information for low-income people in Brooklyn. SBLS is a program of Legal Services NYC.