Bronx Supreme Court Justice Robert Torres (See Profile) has sanctioned Citibank for failing to consider in good faith a borrower's application for a mortgage modification, ruling that the bank cannot collect arrears on the loan going back to July 2011 until it makes a final decision on whether to grant a modification. A 2008 addition to the Civil Procedure Laws and Rules, CPLR 340, requires banks to negotiate in good faith with foreclosure defendants to reach a settlement. The law, however, does not say exactly how banks should be sanctioned for failing to do so. Torres' decision is the latest in a line of state court rulings dealing with that question.
Citibank initiated a foreclosure against Bronx home buyers Beryl Barclay and Curtis Hoggard in 2009. The pair asked for a loan modification, but Citibank did not made a decision on whether to grant one, instead making multiple requests for new information. In March 2012, the court found that Citibank had not considered Barclay's loan application in good faith, and had "made it impossible for Barclay to comply with its conflicting, ever changing, never written requests for documentation."
