Judge: Broker Broke Trust
STAMFORD – A mortgage broker who helped two Stamford brothers refinance two West Main Street properties for more than $1 million breached his duty to them and committed unfair trade practices, a judge said in a ruling at state Superior court Wednesday.
At the conclusion of the pre-trial hearing, Judge Referee Kevin Tierney quoted former Supreme Court Justice Benjamin Cardozo and said the Mortgage Broker’s responsibility to the brothers was an undivided loyalty “at a level higher than that trodden by the crowd.”
Tierney said the Broker broke that trust when he told Carmine Fusaro, 46, and his brother Biagio Fusaro, 37, that he would rent two properties at 453-455 and 457-459 W. Main Street if they evicted the tenants, performed construction work and turned them into commercial properties. After that agreement, he helped them to refinance each for about $500,000 in 2006, more than double the mortgages the brothers held at the time, according to court testimony.
Tierney granted the motion on which the hearing centered, called a pre-judgment remedy, and found probable cause that a jury would award damages after a trial. He calculated damages to be about $1.4 million, and the Broker is now prevented from selling his Easton home or taking any other action against the property.
The Fusaros’ attorney, Mark Sank, has also filed a motion that, if granted, would require the Broker to disclose the rest of his assets.
Sank said they were happy with the decision, but that now the hard work begins.
“Now we start the action against the Broker,” and David Rogers, an attorney the Fusaro brothers also are suing because they say he helped the Broker with the mortgage deals, Sank said.
The Broker’s attorney, Philip Russell, said the Broker was just selling mortgage products the Fusaros could have gotten from any lending agency during the height of the housing boom.
“The real question of this case is whether subprime lending, a national mania can be singled out in a single instance and be brought before a jury if it’s unusually excessive,” Russell said.
Russell said more details will come to light at trial, and that much of the blame lies with the Fusaros.
“At a full trial the jury will learn that the Fusaros applied elsewhere for credit, they were desperate for credit and that they squandered the proceeds of the loans that had come before,” he said.
Sank began the pre-judgment remedy proceedings against the Broker, the mortgage company he owns and Rogers in April, claiming that the Fusaros had been victims of predatory lending practices beginning in 2001.
Until 2008, they refinanced or borrowed money against the two West Main Street rental properties and the Brodwood Drive home in which they live once a year, ultimately owing about $2 million.