A judge went too far when he practically halved the amount of principal a bank sought to recover in a foreclosure action to penalize the bank's purported lack of good faith during conferences, a Brooklyn appellate court has ruled.
After required settlement conferences in a residential foreclosure proved ineffective, Acting Suffolk County Justice Jeffrey Spinner forever restrained Bank of America from "demanding, collecting or attempting to collect, directly or indirectly" any sums linked to a $493,219 mortgage that were considered "interest, attorney's fees, legal fees, costs, disbursements." The bank could only collect principal, and any advances on property taxes or insurance, he said.
Spinner then enforced $200,000 in exemplary damages against the bank, cutting the principal to $293,219.
Then, the Appellate Division, Second Department, on Feb. 13 unanimously overturned Spinner in Bank of America v. Lucido, 2012-05450., saying he didn't have the ability to impose the penalties he did….
The full article can be found here: http://www.newyorklawjournal.com