When a tough lender took an ex-convict landlord to court, it was dubbed the “Battle of the Bad Guys”.
Maverick Real Estate Partners can now proceed to foreclose on the Kips Bay portfolio owned by Steve Croman, the judge ruled.
Croman’s attorney, Terrence Ovid, said he intends to appeal the decision. A lawyer for Maverick declined to comment.
The judgment against Croman follows a failed bankruptcy and nearly three years of litigation over payments owed to Maverick by distressed debt investors after they purchased $25 million in mortgage notes secured by four Croman buildings on East 25th Street. .
Maverick declined to describe its strategy as “mortgage to buy a home,” but it has been quite aggressive in acquiring Croman’s buildings. In July 2021, Croman failed to repay the loan, and the following month, Maverick purchased the debt from Miami-based BankUnited and filed a lawsuit a day later seeking foreclosure on a portfolio of more than 80 apartments.
Croman, who has served time on Rikers Island for defrauding tenants, called Maverick’s actions “unreasonable” and said the scale of the breach — two months of non-payment in July and August that was later corrected — is insignificant compared with the seriousness of the consequences.
In the judgment, the judge noted that “when a mortgagor defaults on a loan, even by just one day,” the lender can expedite the loan, demand payment of the balance and initiate foreclosure proceedings. Croman’s claims that he did not breach the contract and that Maverick’s actions were malicious were “completely at odds with the facts,” the judge wrote.
Records show Croman bought the Kips Bay apartment in 2001. The BankUnited mortgage was issued in 2016, combining 10 loans into one $25 million debt.
In a similar case in 2021, Maverick lost an effort to foreclose on the owner of a five-story rental building on West 25th Street, Andreas Steiner, in part because it failed to file a lawsuit against Steiner. Tyner offered 30 days to resolve the breach.
In the case of Croman, although he paid what he owed, it has been more than a month since he defaulted. However, the similarity of the cases may give Croman’s lawyers (who are also representing Steiner) some fodder for an appeal.
In a recent LinkedIn post, Maverick co-founder David Aviram commented on what banks might be willing to do to protect borrowers from companies like his.
“If a borrower maintains a healthy relationship with the bank, the bank will rarely sell their debt,” Avilam wrote. “But in times like these, banks need cash infusions. So borrowers should listen to their lenders and find the cash to pay back their loans.”
