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Williams v. 2000 Homes Inc.

July 29, 2009


The opinion of the court was delivered by: John Gleeson, District Judge


Plaintiff Glenn Williams sued numerous defendants in New York State Court, alleging various causes of action arising from his 2007 purchase of a home on 179th Street in Queens, New York ("the 179th St. property," or "the property"). On February 5, 2009, the defendants filed a notice of removal, and Williams subsequently moved to remand to state court. On February 27, 2009, I denied this motion and directed Williams to file an amended complaint amplifying his federal law claims, which were suggested during oral argument but not readily apparent from the face of the complaint. On May 27, 2009, motions to dismiss the amended complaint were filed by defendants GE Money Bank ("GEMB"), WMC Mortgage, LLC ("WMC"), Mortgage Electronic Registration Systems, Inc. ("MERS"), Litton Loan Servicing LP ("Litton"), and Bank of America, NA ("BOA") (collectively, the "moving defendants" or "defendants"). In his opposition, Williams sought leave to file a second amended complaint. At a June 30, 2009 status conference, I told the parties that I would resolve the pending motions to dismiss before deciding whether Williams should be granted leave to amend his complaint. I heard oral argument on the motions on July 24, 2009. For the foregoing reasons, I dismiss the amended complaint against the moving defendants.


According to the factual allegations in the complaint, which I assume to be true in adjudicating these motions, Glenn Williams is a "minority homeowner," Amended Compl. ¶ 1 ("AC"), and a "first time home buyer with no experience in real estate or financing matters." Id. at ¶ 9. In 2006, Williams saw a newspaper ad placed by defendant 2000 Homes Inc. ("2000 Homes") offering reasonably priced new homes. He called the number advertised and scheduled an appointment with a real estate agent.

While waiting in the reception area of 2000 Homes, Williams perused two large photo albums purportedly containing photographs of happy 2000 Homes customers. All of the people in the photographs were "Black Americans." Id. at ¶ 27. Williams met with defendant Amnon Kozhinoff, who asked him how much of a down payment he could afford. Williams told Kozhinoff that he had a $10,000 credit line from HSBC Bank, earned approximately $23-26,000 per year working as a security guard, and had approximately $1500 in a bank account.

For several weeks, Kozhinoff showed Williams a number of one- and two-family homes in Jamaica, Queens, "a minority neighborhood made up of predominately West Indian, Hispanic, and Black Americans, many being immigrants." Id. at ¶ 31. These houses were mostly unoccupied and required "substantial renovations before become habitable." Id.

In December 2007, Kozhinoff showed Williams the 179th St. property. Kozhinoff stated that this property was a new construction, and Williams saw workers on-site apparently applying "finishing touches" to the property. Id. at ¶ 32. Kozhinoff said that the price of the property was $600,000 and that the first person to show up at his office the next day with $10,000 would get the house. Williams told Kozhinoff that "he would like to purchase the house if he could do so and it would be economically feasible with reasonable and fair terms for financing." Id. Kozhinoff said he would "reach out" to several banks about financing, and, after Williams told him that he had spoken to a lawyer who would represent him in the transaction for $1200, told Williams that he knew an attorney who was a "family friend" and would only charge $567. Id. at ¶ 33.

The following day, Williams returned to the 2000 Homes office with $10,567 in cash. He met with Kozhinoff, an attorney named Joseph DeGaetano, and an unnamed man who introduced himself as a mortgage broker.*fn1 The mortgage broker asked Williams some questions about his finances and left the room to fill out some paperwork. DeGaetano agreed to represent Williams, and Williams paid him $567 and paid Kozhinoff $10,000. The mortgage broker returned with some forms which Williams signed. He congratulated Williams and left the room with the paperwork. Neither Williams nor DeGaetano were given copies of the forms. DeGaetano congratulated Williams on his new home and left. Kozhinoff also congratulated Williams, told him he would be in touch about the closing date, and offered him a ride to the bus stop.

It appears that the unnamed mortgage broker was defendant Mark Sanders, described elsewhere in the complaint as "an employee of Mortgage Enterprise who filled out the mortgage applications for the First Mortgage and Second Mortgage on behalf of plaintiff." Id. at ¶ 13. "Defendant [presumably Sanders] inserted material, misleading and fraudulent misrepresentations concerning plaintiff's income and ability to pay the mortgages into plaintiff's mortgage applications . . . without the knowledge of Mr. Williams." Id. at ¶ 13. The only misrepresentation apparently mentioned in the complaint was that Williams had a monthly income of $9600. Presumably, Sanders or someone else at Mortgage Enterprise then submitted these applications to GEMB, as the complaint later alleges that GEMB "extended Mr. Williams the First Mortgage and the Second Mortgage based on the application information it adopted and ratified as received from Mortgage Enterprise which was filled out by Sanders based upon an appraisal performed by John Doe." Id. at ¶ 18. The first mortgage was for $480,000, and had an adjustable interest rate starting at 6.75%. The second was for $120,000 and had a fixed rate of 12.125%.

The complaint does not specify when the mortgage applications were submitted or approved. However, on January 4, 2007, Kozhinoff called Williams and told him that the closing would take place the next day. The January 5, 2007 closing was attended by Williams, Kozhinoff, DeGaetano, another unnamed attorney from DeGaetano's office, and defendant Dean Mavrides, who represented the seller, defendant 2D Properties. Williams signed papers for approximately two hours. DeGaetano handed him a stack of papers and Kozhinoff handed him the keys to the property and drove him back to his bus stop.

Williams claims that Kozhinoff told him "for the first time" at the closing that he had two mortgages; i.e., that he was to pay two banks $4000 per month and could refinance and lower his payments to $1500 per month if he made steady payments for six months. 37. The complaint states that GEMB issued the first and second mortgages; that Litton services the first mortgage and formerly serviced the second; that BOA presently holds the first mortgage; and that WMC presently holds and services the second mortgage. Williams also alleges that "[a]ccording to the First Mortgage, MERS is the nominee of GE Money Bank, its successors and assigns." Id. at ¶ 19.

For eight months, Williams wrote a check for approximately $2800 to Litton and one for approximately $1200 to defendant Resurgent Capital Services ("Resurgent"). During this period, Kozhinoff repeatedly called Williams offering to sell his house "if he was tired and stressed out from paying the First and Second Mortgages." Id. at ¶ 40. In March 2007, Williams noticed leaks in his ceiling and other structural defects. He paid an unspecified sum to repair the property.

After eight months, Williams stopped making his mortgage payments. He received a letter from BOA stating that it intended to foreclose on the first mortgage. With regard to the second mortgage, he received a notice of intent to sue from a law firm on behalf of "ANSON STREET, LLC. ASSIGNEE OF WMC MORTGAGE." Id. at ¶ 44. He sought to sell his house "[i]n a panic." Id. at ¶ 43. Williams, who is now told that that his home is worth $450,000, id. at ¶ 48, alleges that he "was victimized by the common predatory lending scheme ...

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