A Long Island couple who were in foreclosure, recently had their debt canceled by an angry judge. They now own their home free and clear. The New York Post reported that Judge Jeffrey Spinner wiped out the $525,000 debt that the couple owed to OneWest Bank. Kieran Crowley, from the New York Post reported Mr. Greg Horoski had attemped, on numerous occasions, to restructure his loan, but OneWest was recalcitrant and refused. Judge Spinner characterized OneWest’s actions as “repulsive” and held that the only way to deter the bank from inflicting further mortifying abuse against the couple.
In Michigan, I would not count on anyone getting such a windfall. While I have not seen the lawsuit, I can tell you that Michigan does not recognize torts for wrongful foreclosure. While there are many such lawsuits filed in the federal courts to stop a state court from foreclosing on property, these federal cases are almost routinely dismissed.
The bank will most likely appeal this ruling. The appellate court in New York will most likely reverse the state court ruling because Judge Spinner’s cancellation of OneWest’s debt of $525,000 of debt is no less shocking to the conscience than OneWests’ refusals to renegotiate its debt with Mr. and Mrs. Horoski. While its a nice see the court stand up for the little guy once in a while, the fact remains that we will in the real world. In the real world, banks have a right to foreclose when the homeowner does not make his payments.