Real Estate

Homeowners’ fight against foreclosure ends with $264K bill

The New York family that in 2009 became the national face of beating back “repugnant” and “repulsive” bank foreclosure practices after a judge ripped up the mortgage on their $525,000 ranch home, not only lost an appeal of the judge’s order — and eventually their home — but were also slapped with a $264,500 bill from the bank.

The bill was to cover the difference between what was owed on the mortgage and what the bank got when it sold their 3,400 square-foot home, court records show.

“That’s adding insult to injury,” Suffolk Judge Jeffrey Spinner said of the quarter-million-dollar-plus deficiency judgment.

Spinner, the judge who tossed Diana Yano-Horoski and Gregory Horoski’s $292,500 mortgage, with an interest rate of 12.375 percent, told The Post that in more than 17 years on the bench and thousands of cases, he has had only three requests for deficiency judgments.

And all three, he said, were on commercial mortgages with deep-pocketed borrowers.

“I think it was grossly unfair what ended up happening to the Horoskis,” Spinner said. “It’s bad enough that these folks had health problems, and even worse that a high-rate refinancing deal … was the result of uncovered medical bills they tried to pay because they are honest people. Then they lost their home. Now they have a deficiency judgment to follow them around. That’s frightening.”

The Horoski’s problems started in June 2005 when bills from uninsured medical problems led them to default on their mortgage. After a judgment of foreclosure, the two hoped summer of 2009 meetings with their lender, IndyMac Bank (now OneWest Bank), which hadn’t received a dime in mortgage payments in five years, would lead to a mortgage modification.

It was IndyMac’s tactics at these meetings — with Diana, a college professor, hobbling into court with a walker, and Gregory, who runs a home-based business, attending every single one — that drove Spinner to toss the foreclosure.

The judge branded as “harsh, repugnant, shocking and repulsive” IndyMac’s tactics. On Dec. 1, Spinner thrust the Horoskis into the headlines by ordering the mortgage to be vacated.

In the years since, more out of the spotlight than in it, the Horoskis continued to come out losers in court — eventually losing their house. The deficiency judgment, which carried an interest rate of 9 percent, only made the hurt worse.

Since the Horoski case, New York has strengthened protections that, had they been in place, may have saved the family from foreclosure.

Today, settlement conferences have to occur earlier in the foreclosure process, and a law forces both sides to negotiate in good faith.

“Things have evolved … and homeowners get a much better shake,” said Westchester-based foreclosure defense lawyer Linda Tirelli.

But the new safeguards came too late for the Horoskis.

“They sold my house and got paid … and I’m the one living in a rental somewhere,” Gregory Horoski told The Post last week.

“We’re just coming out of the trauma of it,” he said. “This is not the way America is supposed to be.”