Neither the state nor the federal Home Ownership and Equity Protection Act of 1994 allow a mortgagor to "escape their legal obligations simply because they borrowed too much," wrote the judge.

Declining to halt a foreclosure sale, a Long Island, N.Y., judge has been left with the "unhappy result" of a loan that should not have been taken for which the homeowner is nevertheless responsible.

The case of Alliance v. Dobkin, 10625/06, is illustrative of the nationwide mortgage lending crisis: An increasing number of borrowers who agreed to onerous loan terms to finance homes they could not otherwise afford now are facing foreclosure.

Nassau County Justice Daniel R. Palmieri said he was "not without sympathy" for Jo-Anne Dobkin "and indeed all foreclosure defendants, who wish to maintain the family home but simply cannot meet the mortgage payment due."

However, he ruled that Dobkin could not rely on the state's prohibition against predatory lending to forestall foreclosure of her home.
"[A]bsent the violation of some statute or other relevant legal principle the law does not permit judges to simply ignore payment obligations voluntarily taken on by mortgagors, even if it should have been evident to both lender and borrower that the loan was likely beyond the borrower's ability to repay," wrote Palmieri.

Dobkin, held the judge, "should not have accepted" two loans totaling $418,540 from Alliance Mortgage Banking Corp., a national mortgage lender," and the "lender should not have offered" them, but absent a showing of fraud, she could not prevail.

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