A $12 Million, 2.95% Hamptons Loan Hits Foreclosure

A newly filed Suffolk County foreclosure action offers a look at a rare kind of distress: a high-dollar Hamptons residential asset financed with a low-rate loan that would be difficult to recreate in today’s market. JPMorgan Chase Bank, National Association filed a foreclosure action in Suffolk County Supreme Court against Nellalice LLC involving the property at 110 Gibson Lane in Sagaponack, New York. The note attached to the filing shows a $12,000,000 principal amount, originated by First Republic Bank on July 11, 2022, secured by the Sagaponack property. The note carries an initial annual interest rate of 2.950%, with interest-only payments for the first ten years and a stated maturity date of August 1, 2052. That rate is the story. A $12 million loan at 2.95% on a Hamptons single-family residence is not the type of debt that is easy to replace in today’s market. According to the note, the initial monthly payment was $29,500, reflecting interest-only debt service at the original coupon. The loan is an adjustable-rate note, but the first rate reset does not occur until August 1, 2032. After that date, the rate is based on the average of the twelve most recently published monthly yields on one-year U.S. Treasury securities, plus a 2.50% margin, subject to a floor of 2.950% and a maximum rate of 10.950%. The complaint alleges that Nellalice LLC failed to comply with the mortgage or note by failing to pay portions of principal, interest, taxes, assessments, water rates, insurance premiums, escrow, or other charges. JPMorgan also states that more than thirty days have elapsed since the alleged default and that it elected to call due the entire amount secured by the mortgage. One notable detail is that the note does not appear to include a separate default interest rate. Instead, the note states that the interest rate required under the note is the rate payable both before and after any default. That makes the economics unusual from a distressed-debt perspective because the lender’s foreclosure leverage does not appear to come from a higher default coupon. It comes from acceleration, enforcement rights, collateral position, and control of a low-rate loan secured by a high-value Hamptons asset. The filing also shows how First Republic-originated real estate debt continues to surface under JPMorgan Chase. The note was originally made payable to First Republic Bank and later indorsed through the FDIC as receiver of First Republic Bank to JPMorgan Chase Bank, N.A. For brokers and note buyers, this is the type of filing that matters because the raw foreclosure event is only the starting point. The real story is the combination of collateral, borrower entity, lender history, loan terms, rate structure, transferability, enforcement posture, and market context. A $12 million loan at a 2.95% coupon on a Sagaponack single-family residence is not just another foreclosure filing. It is a live distressed-debt lead with a rate, asset, and borrower profile that could create multiple angles: refinance, workout, note sale, rescue capital, or buyer outreach. Debt Defaults tracks filings like this daily and turns them into structured deal leads for brokers, note buyers, and lenders.