Khada v. American Home Mortgage Servicing
Justice Charles Markey
Plaintiff purchasers sought specific performance of their alleged contract with American Home Mortgage Servicing (AHMS) to buy the subject real property and to recover their down payment. Current owner New York Residential Properties (NYRP) sought to intervene and for dismissal of the complaint. The record showed Prospect Mortgage, the company plaintiff, claimed AHMS denied to issue a mortgage commitment, and plaintiff buyers were approved by Continental Home Loans, yet AHMS refused to close, sold the property to a third-party, and retained plaintiffs' down payment as liquidated damages. NYRP was granted intervention, and dismissal of the specific performance claim, noting such remedy was barred by the contract under which plaintiffs sought same. The court noted while New York was a race notice state, plaintiffs' failure to avail itself of Real Property Law §§291 and 294 protections to record the contract of sale, deprived them of the right substitute a notice of pendency for the recording, granting dismissal of the complaint.