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United Jersey Bank v. Kensey

A-3444-97T2 (N.J. Super. App. Div. 1999) (Unpublished)

MORTGAGES; FORECLOSURE—A lender does not have a duty to furnish its borrower with a copy of its internal appraisal where the borrower could have obtained its own property appraisal.

In a previous, related case, United Jersey Bank v Kensey, 306 N.J. Super. 540 (App. Div. 1997), cert. den, 153 N.J. 402 (1998), the Court affirmed summary judgment for a lender in its foreclosure action. In the current matter, the Court, for the same reasons, found in favor of the lender in a suit on the related promissory notes. In its defense to the foreclosure action and now to the collection action, the mortgagor alleged that the bank’s failure to disclose an internal appraisal of the value of properties purchased by the mortgagor, and for which the promissory notes were given, deceived the mortgagor into taking the loan. In the earlier case, the Appellate Division said, “[w]e discern no basis to impose liability on [the mortgagee]. To be sure, banks are not popular institutions. Only bankers and bank robbers love banks. But, we perceive no sound reason to impose upon a bank the responsibility to supply a potential borrower with its estimate of the value of the subject property, at least where, as here, the borrower has the ability to make that determination. The principal factors shaping the duty to disclose ‘have been the difference in bargaining power’ between the parties ‘and the difference in access to information.’ Neither factor is present in this case. Defendants were not neophytes to real estate transactions. They saw advantage and profit in [their seller’s] failing financial condition. The [mortgagor] gambled and lost. The loss should remain where lack of success in the market place has put it.” Consequently, for the same reasons as it denied the mortgagor’s claim in the related foreclosure action, the Court denied its claim in the collection action.


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