A Texas student housing foreclosure deal spiraled into a multi-state legal standoff – see how a New York court’s ruling could shape your next big workout
A Texas student housing foreclosure battle just got a major update, and it’s a story every mortgage pro should have on their radar.
On November 13, 2025, a New York appeals court weighed in on a tangled dispute between 417 N. Comanche Street, LLC and EMRES II Texas, LLC. At the heart of the matter? A failed property sale, a contested loan, and a foreclosure that kept getting blocked by court orders. If you’ve ever had a deal stall out because of legal wrangling, this one will sound familiar.
Here’s how it all started: Back in 2016, Point San Marcos Partners, L.P. (PSMP) took out a loan to build a student apartment complex in Texas. Fast-forward to 2017, and PSMP defaulted. By 2020, the loan had changed hands and landed with 417 N. Comanche Street, LLC, which quickly moved to foreclose on the property. But before the hammer could fall, PSMP tried to sell the property to EMET Municipal Real Estate Strategy. That move, according to 417 Comanche, broke the rules of the original loan agreement.
Things got complicated fast. EMET handed its rights to EMRES II Texas, LLC, a company set up just to close the deal. PSMP, EMET, and EMRES asked 417 Comanche to hold off on the foreclosure and provide a payoff figure. 417 Comanche agreed, but the sale never closed and the loan wasn’t paid off. So, the foreclosure was back on.
That’s when the lawsuits started flying in Texas. First, PSMP got a court order to stop the foreclosure, arguing that 417 Comanche was demanding too much by tacking on a hefty default interest rate. Then, EMRES sued, claiming 417 Comanche was interfering with its purchase. The Texas court sided with EMRES for the time being, blocking the foreclosure again and ordering EMRES to post a $500,000 bond.
Meanwhile, 417 Comanche and PSMP squared off in yet another Texas case over whether the default interest rate was fair. Eventually, a Texas appeals court ruled in favor of 417 Comanche, and the state’s highest court let that decision stand in September 2025.
With that win, 417 Comanche fired back in the Texas court, saying the earlier injunction was wrongful and asking for damages. The court bumped up the bond to $3 million but didn’t dissolve the injunction right away.
Not done yet, 417 Comanche took the fight to New York in March 2024, suing EMRES and others for allegedly blocking its foreclosure rights. But the New York court wasn’t having it. On November 13, 2025, the Appellate Division said the New York case was just a repeat of what was already playing out in Texas and dismissed it, pointing out that running the same fight in two states wastes time and risks conflicting decisions.
While all this was happening, the Texas court eventually lifted the injunction and dismissed EMRES’s claim against 417 Comanche. Still, 417 Comanche’s claim for wrongful injunction is pending in Texas.
This case is a real-world lesson in how quickly a straightforward foreclosure can spiral when multiple parties, states, and courts get involved. It’s a reminder to stay sharp on loan terms, keep an eye on cross-state legal risks, and be ready for the long haul when big money and big properties are on the line.
