Judge Wipes Out Couple's Mortgage

A New York judge was so angry with a bank's "harsh, repugnant, shocking and repulsive" behaviour towards a financially struggling couple that he wiped out their $525,000 mortgage.

In an unusual legal decision that may cheer ordinary homeowners but dismay lenders, Judge Jeffrey Spinner took a tough line on a California-based bank that he considered had been determined to foreclose on the couple's home in Suffolk County, Long Island.

His ruling against OneWest and its IndyMac mortgage division has relieved Greg Horoski and his wife, Diane Yano-Horoski, of the $291,000 they owed on the original loan as well as $235,000 in interest.

OneWest took $814 million in federal bailout money but has a reputation for foreclosing quickly on property owners who falls into arrears.