Franconia Village Cooperative, Inc. v. Lincoln Savings Bank

At the heart of this appeal is plaintiff’s attack on the propriety and legality of a banking practice whereby mortgagees imposed upon their mortgagors a flat service charge of 1%% of the principal of Federal Housing Authority insured mortgage loans, plus out-of-pocket closing expenses.

The plaintiff, Franconia Village Cooperative, Inc., made these two payments: $32,522 representing 1%% of its mortgage loan of $2,168,100 from defendant, the Lincoln Savings Bank of Brooklyn; and approximately $18,000 representing out-of-pocket expenses for title search and policy, mortgage recording tax and…