Quiet Judge Facing a Foreclosure Crush Gets Lenders' Attention

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  1. hvactec

    hvactec VIP Member

    Jan 17, 2010
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    New Jersey
    New York Law Journal July 15, 2010.

    At first blush, Suffolk County Acting Supreme Court Justice Jeffrey Arlen Spinner (See Profile) seems an unlikely figure to strike fear in attorneys.

    The 50-year-old judge is physically unimposing, speaks in soft, measured tones and is unfailingly polite. He habitually refers to the attorneys who appear before him as "nice," "reasonable" and even "wonderful" people.

    But the 12-year veteran of the Suffolk bench has also issued three foreclosure decisions over the past eight months that have made him the darling of the tabloids and the Internet for, as the New York Post put it, sticking it to "ruthless bankers."

    First, in November, the judge canceled a $292,500 mortgage because of what he called IndyMac Bank's "unconscionable, vexatious and opprobrious" conduct during mandatory loan-modification negotiations (IndyMac Bank v. Yano-Horoski, 2005-17926, NYLJ, Nov. 23, 2009).

    In March, he ordered Wells Fargo to pay a homeowner $155,000 for entering his house without his permission and changing the locks (Wells Fargo v. Tyson, 2007-28042, NYLJ, March 15).

    And then in April, the judge ordered Emigrant Mortgage to pay a couple $100,000 as damages for what he said was an "unconscionable, unreasonable [and] overreaching" mortgage agreement. (Emigrant Mortgage Co. v. Corcione, 2009-28917, NYLJ, April 21).

    Those three decisions have gotten the attention of not only the press and hopeful homeowners, but also of banks and their attorneys.

    One sign that the banks now tread carefully in Justice Spinner's Riverhead courtroom is the number of veteran bank attorneys who appear at the mandatory settlement conferences.

    On a recent Tuesday morning, Jonathan Ullman, a Syosset attorney who has represented banks for more than 19 years, was among the half-dozen lawyers who had come to conferences being held in the aisles, the hallway or nearby offices.

    Now that Justice Spinner has gained the lenders' attention, Mr. Ullman said, banks no longer entrust cases before him to junior associates: The possibility of losing, and losing big, has become too real.

    "The banks are scared to death of Judge Spinner," Mr. Ullman said. "If you go to the rest of the parts, you won't see anything like this."

    Rising Tide of Foreclosures

    Over the last five years, the annual number of foreclosure filings in New York state has more than doubled, from 22,350 in 2005 to 46,673 last year. More cases were filed in the first five months of 2010 than in all of 2005.

    In Justice Spinner's county, the increase has been even steeper, to 7,536 filings last year from only 2,016 in 2005. And the county had recorded 4,144 foreclosure filings as of May 24.

    As that tide has risen, several Supreme Court judges have developed reputations for discarding the rubber stamp to which many banks had become accustomed.

    Brooklyn's Justice Arthur Schack (See Profile) is known for rejecting foreclosure petitions because of shoddy or questionable paperwork by the mortgagees (NYLJ, Dec. 24, 2009).

    Justice Timothy J. Walker of Buffalo (See Profile) recently dismissed a foreclosure action after Wells Fargo insisted on including an adjustable-rate clause in its loan modification, despite the wide-spread criticism of adjustable rates and the judge's previous order requiring the bank to offer a loan without such a clause. (Wells Fargo v. Hughes, 2010-20081).

    And in Suffolk County, which is home to one-fourteenth of the state's population but one-sixth of its new foreclosures, Justice Spinner has gained a small measure of celebrity within the ever-expanding foreclosure community.

    The judge's decisions have been covered everywhere from Reuters ("Hero of the day: Jeffrey Spinner") to the blog 4closureFraud ("Another NY Style beat down") to London's Daily Mail ("Couple's £370,000 mortgage wiped out by judge angry at bank's 'repulsive' behaviour").

    As the presiding judge of the Residential Mortgage Foreclosure Conference Part for the past 18 months, Justice Spinner has overseen Suffolk County's efforts to process the onslaught of foreclosures by implementing new court procedures and managing the mandatory settlement negotiations for subprime mortgages.

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