Justice Marsha L. Steinhardt
In this foreclosure action, Rossrock Fund argued Arroyo defaulted under the mortgage and note and moved to appoint a referee to compute sums due. Arroyo moved to declare a purported forbearance agreement void and unenforceable. Arroyo signed a forbearance agreement extending his time to satisfy the mortgage and agreeing to make monthly payments for 29 months and then a balloon payment thereafter. Rossrock retained the right to proceed with the foreclosure, but would forbear provided Arroyo was in compliance and waived all defenses to the foreclosure. The court noted the agreement was drafted by Rossrock while Arroyo was unrepresented, finding the terms and circumstances of the execution revealed a transaction designed to ease the process in Rossrock’s favor, but affording Arroyo “virtually no benefit.” Accordingly, it found the subject agreement unconscionable, employing its equitable powers to rescind it, granting Arroyo’s motion, and directing Rossrock to refund Arroyo all payments made under the agreement. Further, the court ordered the matter referred to the Foreclosure Settlement Conference Part for good faith negotiations regarding a potential loan modification.
