How NY Man Evaded Paying Mortgage For 23 Years, Escaped Evictions

A man in Long Island, New York dodged paying his mortgage for 23 years, having made only one payment by battling banks with repeated lawsuits. Guramit Hanspal, 52, cleverly used the courts to enable him to stay in the house for two decades by also claiming bankruptcy seven times.

According to court documents, Hanspal filed four lawsuits to avoid getting evicted from the 2,081-square-foot home he supposedly bought for $290,000 in 1998. Moreover, Hanspal is not the only occupant of the said home riding on the rules of the US Bankruptcy Code’s “automatic stay”. Three other people who have listed the same residence located at Kenmore St as their address also filed for bankruptcy in Brooklyn Federal Court.

The Bankruptcy Code rule on “automatic stay” gives debtors a temporary clemency from all collection, eviction and foreclosures. The evasive strategy seems to have worked over the years for Hanspal and the other individuals as two different banks and a real estate company have owned the three-bedroom home since Hanspal foreclosed in 2000, yet he remains to live in the home.

Fox News said Hanspal secured his original mortgage from Washington Mutual in 1998 and had made only a single payment of $1,602.37. The bank foreclosed the home two years later, barring Hanspal from any claim to the property. However, Hanspal filed for the first of his several bankruptcies in January 2001, then filed for another in November 2001, two in 2002 and one in 2003. On other occasions, he would act as his own attorney and step up to state court seeking relief.

As he was able to acquire relief from state courts, Hanspal transferred the deed to a friend in 2004. His friend, Rajender Pal then continued to play the same bankruptcy games and gave courts a similar runaround.

In 2008, Washington Mutual went under, and JP Morgan Chase took over its assets. But, they too were unable to give Hanspal the boot. JP Morgan Chase has been locked in litigation with him for years as Hanspal had even filed three lawsuits against the bank in Nassau Supreme Court.

They are currently in an ongoing legal battle in Brooklyn Federal Court.

Hanspal claims that JP Morgan Chase committed “blatant fraud” in 2010 saying the bank tried to evict him when it did not have a proper title to the home and accused Chase of withholding surplus funds from a previous auction of the property. In turn, Chase slapped charges on Hanspal for “clogging the court docket” with “patently frivolous” claims.

In 2018, JP Morgan Chase handed the property to Diamond Ridge, offering Hanspal $20,000 to pack his bags. He refused the deal and instead filed for bankruptcy again in 2019 and 2020.

By then another occupant of the same home identified as Boss Chawla, filed bankruptcy four times in 2019. Another resident named John Smith also filed for bankruptcy once.

Nassau District Court Judge Scott Fairgrieve wrote in a December 2019 court proceeding: “The history of this case going on for approximately 20 years must come to an end.”

Diamond Ridge has spent $150,000 on legal fees and paid $50,000 in property taxes since it purchased the home, The New York Post said.

Amid the Covid-19 backlog in New York’s housing courts, it would seem that Hanspal may yet have another shot at dodging eviction efforts. As of today, the home has an estimated worth of almost $400,000, according to Zillow where the home is listed for sale on "CASH ONLY" basis.