Homeowner Sues Bank After $5.5 Million Oceanfront Property Demolished Due to Erosion

A retired New York lawyer is suing JPMorgan Chase, alleging the bank improperly granted him a mortgage for a luxury oceanfront home that ultimately had to be demolished due to severe coastal erosion. John G. Bonomi Jr. purchased the Cape Cod property in Massachusetts for $5.5 million in late 2021.

However, the home was situated on a sandy coastal cliff that was actively eroding, bringing the structure closer to the edge of the sea. The situation became so critical that the house had to be demolished in February 2025 to prevent it from falling into the ocean. Following the demolition, the land's value was assessed at a mere $385,000.

In his lawsuit, Bonomi claims that the bank should not have approved the loan, asserting that at the time of the transaction, he was experiencing uncontrolled manic psychosis, which impaired his ability to make rational decisions. His legal team contends that the bank exploited his condition. The lawsuit states that the existential threat posed by erosion was well-known when the mortgage was finalized.

Bonomi's attorneys further argue that no rational person, even after a basic internet search, would have agreed to pay the full asking price for a property in such a precarious location. Despite previous owners' attempts to reinforce the land with sand, the sea continued to reclaim it. Bonomi's attempt to sell the house for $4.5 million in October 2023 was unsuccessful.