Following
the Nazi holocaust in Europe, many of the insular religious Jewish groups transplanted
themselves to America so that they could (A) live; and (B) maintain their
insularity. But the world has changed,
and it is very difficult to remain insular when you are based in a large city
such as New York. For one thing, if you
borrow significant sums of money, you are subject to all of the lender's
remedies if you default on the loan.
One
of these groups is the followers of the Siget (or Sighet) chassidic dynasty,
which consists of somewhat in excess of 300 individuals living in the Borough
Park section of Brooklyn (which would be, at a maximum of maximums, 50
households, and probably closer to 40).
The group became an entity under New York's Religious Corporation Law,
and is legally known as the Congregation Atzei Chaim of Siget.
In
2008, the Congregation, with
due permission of the Court, took out a 10-year $499,000 mortgage loan,
secured by their existing synagogue building located at 1511 50th Street in
Brooklyn. But times got difficult, and
they fell behind in the loan payments -- far enough behind for the lender to
bring a mortgage foreclosure action.
Due
to the time, difficulty, and expense involved in foreclosing real property,
mortgage lenders will go to great lengths to find alternatives to
foreclosure. The foreclosure action was
apparently filed in late 2012, which indicates that the default probably
occurred relatively early on in the life of the 10-year loan.
Valley
National Bank, the mortgage holder, having lined up all of the required papers,
moved for foreclosure. The Congregation
opposed the foreclosure judgment, claiming that the Congregation's leader, Rabbi
Jacob Teitelbaum, the Siget Rebbe, who resides in the mortgaged premises, was
not properly served with the required notice of the foreclosure action, and
Rabbie Teitelbaum was the true owner of the property. [As mentioned in a recent
post, I have no problem with making mortgage holders run the gauntlet
before they can foreclose on mortgaged properties, but, once the gauntlet has
been run, the foreclosure right has been duly established and should be
expedited. If lenders could not enforce
collection of their loans, then nobody would lend money at reasonable rates,
and no person or business would be able to have a home.]. The Rebbe said that the Congregation was just
his nominee, apparently a ploy to benefit from the touted advantages of
incorporation.
Nothing
doing, said
Judge Demarest to the Rebbe! The
mortgage was a commercial mortgage and not a residential mortgage. The mortgage document specifically indicates
that the premises would not include residential properties. Rabbi Teitelbaum was not a signatory to the
mortgage or its note. And (for both the
individual rights activists on the right side of the political spectrum and the
advocates for the homeless on the left side of the political spectrum), merely
depriving the Congregation (which, according to the Rebbe, is one and the same
as the Rebbe himself) of ownership of the property would not in and of itself
dispossess the Rebbe of his living quarters.
[Zooming
in on the Street View of Google
Maps, (which is reproduced in the Brooklyn
Daily Eagle article), one can see that the building has three mailboxes by
the front door. There also is a balcony upon
which is set up a beach chair of the type used by residential households. The photo accompanying the article in the New
York Law Journal indicates that an additional story has been added to the
building subsequent to the Google Maps photo.].
The
advantages of incorporation are widely touted in the classrooms, in attorney's
and accountant's offices, and on the streets.
But if you are a corporation, then you do not enjoy the benefits of
being a natural person. These range from
the famous Miranda Rights of warning upon arrest, to the right to personal notice
of a mortgage foreclosure on your property.
Labels: mortgage crisis, rabbis
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