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SUPREME COURT -STATE OF NEW YORKI.A.S. PART XXI-SUFFOLK COUNTY

HON. JEFFREY ARLEN SPINNERJustice of the Supreme Court

Index No.: 2005-17926: MORTGAGE ELECTRONIC REGISTRATION: SYSTEMS INC.,, SUA SPONTE ORDER STAYINGPROSECTION OF ACTION AND

SCHEDULING HEARINGlaintiff- against-

IIIII. DIANA YANO-HOROSKI and WELLS FARGO: BANK MINNESOTA NATIONAL

IIIIIIIIIASSOCIATION, , Defendants i_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

This is an action wherein the Plainti ff claims foreclosure of a mortgage in the original principal amount')1'$ 290,000.00 with the Clerk ofSuffolk County,NewYork inLiber21733 of Mortgages at Page 808. Themortgage secures an adjustable rate note of the same amount with an initial interest rate of 10.375% Themortgage encumbers real property commonly known as 8 Oakland Street, East Patchogue, Town ofBrookhaven, New York, District 0200 Section 979.50 Block 05.00 Lot 001.000. An application to extendthe Notice of Pendency was granted on April 28, 2008 and a Judgment ofForeclosure & Sale was grantedon January 12,2009.

I'hereafter and in accordance with the Laws of2008, Ch. 472, Sec. 3-a, Defendant properly requested thatthe Court convene a settlement conference. That request was granted and a conference was commenced onFebmary 24, 2009 which was continued five times in an attempt by the Court to obtain meaningful-.:ooperation from Plaintiff. In view ofPlaint iffs failure and refusal to cooperate with Defendant's multiplerequests, the Court directed that Plaintiff produce an officer of the bank at the a ~ j o u r n e d conference'3cheduled for September 22, 2009.

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'\{ the conference of September 22, 2009 (which was held on the record), Plaintiff produced KarenDIckinson, Regional Manager of Loss Mitigation for IndyMac Mortgage Services, division of OneWestBank F S. B. ("IndyMac"). Apparently, IndyMac is the servicer of he loan for the benefit ofDeutsche Bankwho, it is claimed, is the owner and holder of the note and mortgage (though the record holder is MortgageEl ec tronic Registration Systems Inc.). As the conference progressed, it became apparent to the Court thatIndyMac had no intention whatsoever of resolving this matter in any fashion other than a completee v o l u t i o n of title from Defendant. Although IndyMac had prepared a two page document entitled"Mediation Yano-Horoski" which contained what purported to be a financial analysis, Ms . Dickinson'sstatements on the record made it abundantly clear to the Court that no mediation, resolution or settlement

wo uld be accepted by Plaintiff. The total amount due to pay off the loan is in the area of$ 525,000.00 andPlaintiff concedes that the property securing the loan is worth no more than $ 275,000.00. Although Ms.Dickinson insisted that Plaintiff offered Defendant a. "Forbearance Agreement" in the recent past, it was onlyupo n lengthy exposition by the Court that she coneeded that it had been sent to Defendant after its statedfirst payment date and hence, Defendant could not have consummated it under any circumstances (she wasdfectively in default of he proposed agreement by the time she received it). Plaintiff flatly rejected an offerby Plaintiffs daughter to purchase the house for its fair market value (a so-called "short sale") with thirdpat1y financing. Plaintiff further refused to even consider a modification with anything more than 25% ofthe income of Plaintiffs husband and daughter (both of whom reside in the premises), asserting that "Wecan' t control what non-obligors do with their money" (ofcourse, this gives the Court pause to consider the'. :onve rse of claim, whether or not the bank can control what the obligors do with their money). Plaintiff alsosummarily rejected out of hand an offer by both Plaintiffs husband and daughter to voluntarily obligatethemselves for payment upon the indebtedness, thereby making their income available for purposesofa loanmodification. Itwas evident from Ms. Dickinson's demeanor and attitude that nothing that Defendant mightproffer would be acceptable to Plaintiff (even art offer of a deed in lieu of foreclosure was met withequi vocation).

Since an action claiming foreclosure ofa mortgage is one sounding in equity, the very commencementnf the action by P laintiff unquestionably invokes the Court's equity jurisdiction. While it is true that the lawof th is state that "Stability ofcontract obligations must not be undermined by judicial sympathy .. " Graf/ . Hope Building Corporation 254 NY 1 (1930), it is true with equal force and effect that equity must notand cannot slavishly and blindly follow the law, Hedges v. Dixon County 150 US 182, 192 (1893).\!Ioreover, as decreed by our Court of Appeals in the matter of Noves v. Anderson 124 NY 175 (1890) "Anarty having a legal right shall not be permitted to avail himself of it for the purposes of injustice oroppression. " ', 124 NY at 179. Indeed, the conduct of Plaintiff during the preceding seven months hascaused this Court to seriously question whether or not it is acting in good faith and if not, whether or notlllvocation of equitable remedial action and the imposition of appropriate sanctions should be consideredby the Court. In exercising its equity jurisdiction, the Court is bound to do that which is right, fair and which

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That being said, this Court is unable, at this juncture, to determine the extent to which equity shouldp roper/y intervene in this matter. Accordingly, afi{!r a careful review of all of the submissions herein, it isORDERED that in the exercise of discretion, upon the facts presented, Plaintiff, its attorneys, agents,

e r v a n t , employees and any other person acting on Plaintiffs behalf shall be and are hereby stayed,re strained , prohibited and enjoined from the continued prosecution of this foreclosure action, said stay toc(]ntinue until further order of this Court; and it is further

ORDERED that a hearing in this matter to determine the nature and extent, if any, of equitablere rnediation and sanctions shall be held at 2:30 p.m. on November 18,2009, Supreme Court of the State' lfNew York, County ofSuffolk, I.A.S. Part 21, Courtroom 1, Criminal Courts Building, 210 Center Drive,R iverhead, New York 11901; and it is further

ORDERED that within ten (10) days of he date of entry hereof, Plaintiffs counsel shall serve a copy of:h LS Order upon the Defendants and the Calendar Clerk of the Supreme Court.

Dated: September 23,2009Riverhead, New York

Steven J. Baum P.c.Attorn ey for PlaintiffPO Box 1291Buffalo, New York 14240Diana Yano-HoroskiDefendant Pro .')'e8 Oakland StreetEas t Patchogue. New York 11772-5767

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FINAL DISPOSITIONl SCAN

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l NON-FINAL DISPOSITIONDO NOT SCAN