Steve Croman is at risk of losing his home, but not without putting up a fight first.
Croman, a now-notorious landlord, allegedly defaulted on a $31 million loan connected to the Upper East Side house he shares with his wife and son. Now, the lender is trying to sell off equity interests in the property later this month, while Croman is arguing the process has gone awry.
It’s the latest skirmish in Croman’s legal battle with lenders, who are together trying to foreclose on more than $231 million in loan principal. In the background is his fight with his father, Edward Croman, who is hoping to dissolve the family partnerships, alleging mismanagement.
Steven, Edward and Harriet Croman bought the building at 12 East 72nd Street in 2002 through a shell company for $5.5 million, according to contemporaneous reporting from the New York Times. The property was a six-story multifamily building at the time, off Fifth Avenue, but Croman was able to boot tenants out of its 23 rent-stabilized units and renovate the building into a personal mansion.
Initial plans for the home included two pools, a koi pond, a basketball court, six wet bars and two fireplaces, according to contemporaneous reporting from the New York Observer. However, it’s unclear to what extent these plans were completed.
The now-single-family home is currently valued at $53 million and is more than 15,000 square feet, according to city records. In 2023, Croman’s company took out a $31 million loan from Axos Bank backed by the property, as well as the family’s membership interests in the borrower.
By the next year, the loan was in default. In a court filing, Croman blamed the legal dispute with his father for the inability to service or refinance the loan. The lender is planning to sell the membership interests on December 11 in a UCC sale.
Steve and Harriet Croman, however, are arguing in court that their home is unique and valuable, and a quick sale process will depress what the lender can recover at the sale. The lender isn’t properly advertising the property, they said, and is putting up barriers that will limit public interest, like mandatory nondisclosure agreements. They’re asking the court to pause the sale and issue a preliminary injunction.
Arguments like this are common in UCC sales, and hinge on the requirement that a sale be “commercially reasonable.”
The lender in the case, NYC Multifamily Portfolio LLC, is connected to Dalan Real Estate. The company purchased $140 million of Croman-connected loans last year from Axos Bank and has since filed several foreclosure suits.
A lawyer for the defendant didn’t immediately respond to a request for comment, but told the court that putting a stop to the sale is neither “necessary nor appropriate.”
Croman is also named as a defendant in 28 other foreclosure cases, related to loans totaling more than $231 million in principal. Twenty-one of those suits were brought by Orange Owner LLC, associated with Bellwether Asset Management. In October, the entity bought loans tied to 49 Croman buildings for $247 million from Flagstar Bank, according to Traded.
Croman is one of the few New York landlords to have been sent to prison for real estate-related crimes. Once named one of the city’s worst landlords, Croman served eight months in state prison related to mortgage and tax fraud and paid $8 million in restitution related to accusations of tenant harassment.
Matthew Ethan Hearle, an attorney with Goldberg Weprin Finkel Goldstein who is representing the Cromans in the dispute, did not immediately respond to a request for comment.
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