Generally foreclosures is a household affair.
The Ostad brothers, a trio of New York real estate investors, have been named as defendants in 9 foreclosures fits associated to loans totaling greater than $70 million. Edward and Michael Ostad are named in all of the circumstances, whereas Steven Ostad is called in three of them.
The lender is making an attempt to get well some cash out of the Ostads personally, pointing to warranty agreements they signed. The brothers stopped making funds on the loans in April, in keeping with the plaintiff.
That’s the identical month that Michael and Edward sued Steven, hoping to dissolve their household partnerships.
The 2 older Ostad brothers lead fix-and-flip lender Flatiron Realty Capital, which doesn’t look like concerned within the properties or foreclosures circumstances. The pair describe themselves as “profitable urologists,” along with traders.
In court docket filings earlier this 12 months, the 2 painted Steven because the black sheep of the household. They claimed the youngest Ostad “has by no means had a job” and “has a lifelong historical past of great private points and self-destructive behaviors.” Michael and Edward accused Steven of standing in the way in which of their effort to dissolve the partnerships. The youngest brother had racked up hundreds of thousands in judgements and money owed, they alleged.
Steven is the founding father of residential brokerage Empire Metropolis Realty and lender Actual Fast Capital, though each look like closed. The case remains to be pending.
Steven’s lawyer stated the youngest Ostad is a passive investor within the properties named within the latest foreclosures fits and was “shocked” to study funds weren’t made.
“We discover it greater than coincidental that debt service funds allegedly stopped in April of 2025 – simply as Steven’s brothers sued him on April 14, 2025,” Christopher Milito of Morrison Cohen stated through electronic mail.
Michael and Edward didn’t instantly reply to requests to remark.
Steven’s investments have been situated within the Highbridge and Woodstock neighborhoods of the Bronx, in addition to in Manhattan’s Hamilton Heights. The properties managed by Michael and Edward with out Steven have been situated in Sundown Park, Brooklyn, East Harlem, Hamilton Heights and the Fordham neighborhood of the Bronx.
The plaintiff took over the loans after the collapse of the original lender, Signature Bank. It’s now making an attempt to recoup no less than a number of the funding from the Ostad brothers personally. In letters to the brothers included in court docket paperwork, the lender accuses the traders of breaching warranty agreements they signed by not turning over rental revenue after the default. That entitles the lender to gather these funds from the brothers personally, it argued.
Milito, an lawyer for Steven, famous the criticism does allege misappropriation of hire however makes no particular allegations of misconduct towards Steven particularly.
“It couldn’t, as Steven’s brothers have been in unique management of the properties’ funds,” he wrote.
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