A retired lawyer is suing JPMorgan Chase, seeking to invalidate his mortgage on a $5.5 million Cape Cod mansion that has since been demolished due to coastal erosion. John G. Bonomi Jr., 66, purchased the 5,817-square-foot Blasch house in November 2021, despite well-publicized reports of erosion threatening the property.
Bonomi alleges he was suffering from an "uncontrollable manic psychosis" at the time of the sale and lacked the mental capacity to enter into the mortgage agreement. He claims the bank "unconscionably took advantage of his condition" by lending him the funds. He is seeking to void his $3,850,000 mortgage and associated interest, as well as damages.
The home, built in 2010, was situated on a narrow coastal bank between Cape Cod Bay and Wellfleet Harbor. According to Bonomi's lawsuit, filed in the U.S. District Court for the Southern District of New York, the foundation was approximately 14 feet from the edge of the eroding bank when the property was listed. The listing acknowledged erosion occurring at a rate of six to seven feet per year.
Bonomi, who was diagnosed with Bipolar I Disorder in 2009, stated that his manic episode was triggered by his employer at the time, Deloitte, forcing him into early retirement. He described the Blasch house as "seductive" and an "irrational talisman" that led him to make an offer without consulting family, friends, or doctors. The lawsuit notes that he was the only full-price bidder, which he presented as evidence of his unstable mental state.
According to the complaint, JPMorgan Chase commissioned two appraisals and required Bonomi to obtain documentation from an engineering company working to slow erosion. Bonomi's suit contends that the bank was aware the property was rapidly losing value due to erosion, potentially becoming a liability if it collapsed onto a protected national seashore.
The lawsuit also accuses a former Chase lending officer, Kimon Psihudakis, of ignoring a letter from Bonomi's employer stating his upcoming retirement. Psihudakis reportedly told Bonomi that Chase would not provide a mortgage to anyone within three years of retirement.
Bonomi made monthly mortgage payments of $21,053 from November 2021 until September 2024. The demolition of the home was completed in March 2025, at a cost to Bonomi of $250,000. In May 2025, a court upheld the town of Wellfleet's denial of Bonomi's permit for revetment, a measure to protect against erosion.
JPMorgan Chase initially sought to dismiss Bonomi's suit but later responded to the complaint, denying the allegations and stating that the plaintiff must prove his claims. The legal proceedings are taking place in New York, where Bonomi resides and entered into the mortgage agreement. While New York law has precedent for contract invalidation based on mental health conditions, experts suggest Bonomi faces a significant burden of proof to demonstrate both his own mental defect and the bank's awareness of it.
Psihudakis no longer works for Chase, having left the bank in July 2024. Bonomi is seeking a jury trial to have the remainder of his mortgage forgiven.