In a June 11, 2012, decision by Justice Hinds-Radix, the court denied plaintiff-lender’s motion for summary judgment in a mortgage-foreclosure action based on questions of fact surrounding defendant-borrower’s affirmative defense of usury. The court found that, when combined with the origination fee, the interest rate on the subject loan exceeded the statutory maximum of 16 percent. Based on evidence that plaintiff required the defendant to form a corporate entity as a condition to making the loan, the court rejected plaintiff’s argument that the usury statutes are inapplicable to a corporate borrower and found that “an issue of fact exists as to whether the loan was, in reality, a personal loan . . . to further a corporate interest and, resultantly, may be deemed usurious on account of the true interest rate being in excess of 16 percent.”
206 Jericho Realty LLC v 7318 18th Ave., Inc.., Sup Ct, Kings County, June 11, 2012, Hinds-Radix, J., Index No. 11979/11
