Developer Yair Levy is facing a foreclosure suit from Bank of America after he allegedly defaulted on a $2.28 million loan backed by the commercial space at the Fulton-Chambers Condominium in Lower Manhattan.
Levy allegedly failed to make timely monthly payments since July 11, 2009, and got a second mortgage on the property for an entity called LawLand, without the prior approval of the lender, according to the complaint, filed March 8 in New York State Supreme Court. He also granted a “security interest” in the property to Sosana Levy, his wife, without prior approval of the lender, the complaint alleges.
Levy originally borrowed the money from UBS Real Estate Investments in November 2004, and signed a personal guarantee, according to the complaint. UBS later assigned the loan to LaSalle Bank National Association, which was trustee of a commercial mortgage-backed security LB-UBS series 2005-C1. The loan was scheduled to mature in December 2014. Bank of America bought LaSalle in 2007 for $21 billion, thus inheriting its loans.
The space involves three commercial units at the property, located at 102-104 Fulton Street. The Board of Managers at the property was named a defendant in the case, due to an October 2007 lien, according to the complaint. The complaint says that the claim for the lien is subordinate to the mortgage, meaning the Bank of America loan gets first priority in a foreclosure.
In September 2009, Levy agreed to pay $100,000 to settle a lawsuit filed by the Board of Managers at the Fulton-Chambers condominium alleging numerous construction defects at the property. After paying $25,000 towards the settlement, a judgment was later issued against Levy when he failed to pay the remaining balance.
Lawyers for Bank of America declined to comment. Levy was not immediately available for comment. Attorney Allan Brill, who represented Levy in the previous lawsuit, said that case was settled. He did not have any comment on the Bank of America case.
The Real Deal reported last week that Danny Deustch, his son-in-law and former executive vice president at YL Real Estate Developers, opened a brokerage called Homestate Properties at the building.
Levy previously lost a foreclosure case at Rector Square, a condo conversion project in Battery Park, that was foreclosed by Anglo Irish Bank.