Rapper Shawn Carter (a.k.a. Jay-Z) is taking a foreclosure fight to the courts. Jay-Z, who took out a $52 million loan for a planned hotel development was at risk for foreclosure after the commercial real estate foreclosure crisis shut down his project. Right now, Jay-Z is disputing with his bank over interest payments he said were the result of their negligence.
On Wednesday Jay-Z filed a lawsuit in U.S. District Court in Manhattan, which claims that Highland Capital Management and NexBank attempted to pinch extraneous payments from the rapper as he repaid a loan related to a planned hotel development, the Wall Street Journal reports.
Jay-Z's foreclosure dispute is not too different from the foreclosure problems of everyday homeowners. Many mortgage lenders fail to respond to mortgage modification requests in a timely manner and even blame the borrower for their negligence. Unfortunately, for many individual homeowners, they don't have the a legal team on retainer to tackle their foreclosure issues and they are often struggling with other delinquent debts which are quickly sinking their financial ship. But what ordinary homeowners do have, is the ability to use bankruptcy as a tool to stop foreclosure. It is bankruptcy that is the most powerful legislation available to bring even the most apathetic lenders to the negotiating table.
After taking out a $52 million loan, Jay-Z put the development of the planned J Hotel on hold because of crashing real estate markets in the U.S. and a lack of financing, the lawsuit says.
When the rapper and the banks could not agree to a restructured loan in November 2009, Jay-Z and two other guarantors offered to pay $2.7 million to cover disputed payments and $1.57 million in transfer costs, in lieu of foreclosure.
According to the complaint, Highland refused to expedite the payment process and causing interest on the initial loan to accrue at about $20,000 per day...