Armand Assante has played many roles in his esteemed acting career. But it’s the role of predatory lending victim that has garnered him notoriety lately.
Movie goers are used to seeing Assante in roles like the famous violinist he played in Unfaithfully Yours with Dudley Moore or a drug kingpin in American Gangster with Denzel Washington.
But nowadays, they are more likely to see Assante in news stories about the foreclosure in process on his home.
That’s because the actor is in a legal battle with Eastern Savings Bank, FSB, which is attempting to convert his New York estate into a real-estate-owned asset.
Assante took out a $1.5 million, stated-income refinance mortgage with Eastern in 2005. He reportedly spent $7,500 for an application fee.
Court documents indicate that closing costs on the HUD-1 closing statement totaled $105,000.
Eastern, which didn’t respond to multiple requests by Mortgage Daily to comment on the case, was established in 1905. The 120-employee company had $425 million in total assets as of year-end 2013 including $220 million in residential loans.
The Hunt Valley, Md.-based bank is operating under a cease-and-desist order issued by the Office of the Comptroller of the Currency in March.
| In a telephone interview with Assante and his attorney, Thomas F. Vasti III, Assante alleged that his house was under-appraised at $3 million by a corrupt appraiser in order to justify that his residence and two adjacent properties he owns could be required as collateral for the loan.
In all, the property is 223 acres. Vasti said that the property was actually worth $6 million based on offers Assante received at the time. While Assante claims he was originally offered a 30-year, 9.99 percent, fixed-rate mortgage, he alleges that the loan was switched to an adjustable-rate mortgage with a short-term balloon payment due in late 2010 — something he had no chance of repaying.
|
|
To make matters worse, according to Assante, there was a $70,000 prepayment penalty.
In addition, Vasti said that the required disclosures were missing from the file and two different sets of closing documents were used.
“The best way for us to phrase this is a bait and switch,” Vasti stated.
But Alan Clark, a partner at Williams Mullen who works with mortgage servicers, noted that Assante’s claims of fraud and illegal activity have been rejected thus far by judges. He acknowledged that the interest rate was high for the time period but noted that some factors — like the unique nature of the property, the five existing loans that were on the property and Assante’s potential financial troubles at the time — could have justified such rates.
“It sounded like that even though the rate on this loan was 10 percent, it was reducing his debt service,” Clark added.
Assante explained that he relied on his accountant to determine that the loan terms were as they were originally promised. He closed on the loan immediately after returning from an overseas trip to Russia and didn’t take the time to thoroughly review the documents himself because he relied on his accountant.
The actor alleges that behind the scheme was former Eastern senior vice president Jonathan I. Feldman, who served as the originator on the transaction.
He claims that Feldman — who was hit with an Office of Thrift Supervision civil money penalty in 2011 — wanted to put Assante in a position where he would lose the house in foreclosure to the bank so that another firm owned by Feldman could purchase the property at a steep discount and develop it.
“If someone such as I can be victimized by bank fraud and predatory lending, it can and it has happened to all of us,” Assante stated in a press release earlier this year. “I have fought nine years to expose what Eastern has done, and it has almost broken me.”
Assante said he tried to negotiate a $1.3 million settlement in 2009 that was flatly rejected by Eastern due to its strong equity position.
After the rejection of the settlement offer — and faced with a steep drop in his income — Assante retained an attorney who, he said, advised him to stop making payments due to the predatory nature of the loan.
A lawsuit was filed by Assante against Eastern, but he lost the case — at which point he filed for bankruptcy protection.
“Every step of the way that this man was asked to pay money, he did,” Vasti, Assante’s attorney, said in the telephone interview.
A foreclosure was originally filed in 2009, according to Vasti, and a judgment was ordered in favor of the bank in 2011.
Clark, the attorney who represents lenders, said that he couldn’t identify any blatant mistakes made by Eastern.
“From all appearances, the loan kind of followed the standard process,” Clark said — adding that it appeared to be an arms-length transaction.
Assante’s attorneys are currently trying to convince the court to vacate the original summary judgment in favor of Eastern. They have presented new evidence that wasn’t discovered until after the original judgment.
“I feel extremely confident right now that we’re gonna vacate the summary judgment decision,” Vasti said.
