Lender Maverick Pursued Default Interest Even After Foreclosure Loss
By Nicholas Rizzi August 14, 2019 5:59 pmreprints
A lender tried to get the owner of a Chelsea apartment building to pay more than millions of dollars of default interest and legal fees, even after a judge tossed out its foreclosure claim on the property, a lawsuit claims.
Andreas Steiner, the owner of 416 West 25th Street, filed a suit in Manhattan Supreme Court yesterday accusing Maverick Real Estate Partners of sticking him with an inflated bill when he tried to pay off the remaining $3.5 million left on the loan for the property.
Maverick allegedly wanted Steiner to fork over $1.4 million for default interest, $68,000 in “advances” and $12,000 for legal fees to close the loan, despite “the indisputable fact that [Steiner] had never missed a mortgage payment,” according to the suit.
In the suit, Steiner’s lawyer blasted Maverick as a “predatory lender” focused on setting “punitive” 24 percent default interest rates “in order to coerce borrowers into turning over their valuable properties for pennies on the dollar or foreclosure upon them and snatch them up at auction.”
Maverick co-founder David Aviram did not immediately respond to a request for comment.
The suit is the latest in a legal battle between Solomon and Maverick that started last year when Maverick tried to foreclosure on the five-story, 22-unit 416 West 25th Street after accusing Solomon of violating the $3.5 million loan agreement.
Maverick claimed Steiner breached the agreement when it secured a $4 million loan from L&L Capital Partners in 2017 without getting written consent from bank Peapack-Gladstone, which issued the debt and later assigned them to Maverick, The Real Deal reported.
In the original suit, Maverick wanted Steiner to immediately pay the remaining balance plus 24 percent default interest for the past two years.
However, in May, Judge Arlene Bluth tossed Maverick’s foreclosure action because the lender failed to make it clear that Steiner had a 30-day cure period to fix the issue required by the contract with Peapack, according to TRD. Bluth also ruled it was “a technical default — there is no allegation that [Steiner] failed to make payments,” court records show.
Days after the ruling, Steiner requested a payoff letter to “finally rid itself of Maverick’s predatory lending tactics.” When Maverick sent the bill, it still tacked on the default interest.
“[Maverick] continues to demand default interest at the rate of 24 percent per annum, demands reimbursement of Lender’s legal fees, even though it is undisputedly the losing party in the Foreclosure Action and demands reimbursement of unsubstantiated alleged advances of taxes and insurance,” the suit reads.
The suit asks a judge to toss out the extra fees Maverick tacked on to the payoff amount and asked for damages and lawyer fees for no less than $2 million for breach of contract.
“We are confident in Justice Bluth’s ability to once again see through Maverick’s transparent tactics for what they truly are — the wholly inappropriate and improper attempt to obtain payments from our client to which they are not entitled,” Steiner’s lawyer, Terrence Oved who is handling the case with Aaron Solomon, said in a statement.