Man sues bank claiming loan for doomed $5.5m mansion should never have been approved

A man is suing JPMorgan Chase after claiming the bank should never have approved a loan for his $5.5 million Cape Cod mansion because he was experiencing a manic episode when he bought it.

John G. Bonomi Jr. purchased the waterfront property in Wellfleet, Massachusetts, in November 2021. The mansion, which sat on a rapidly eroding cliff overlooking Cape Cod Bay, was demolished in March 2025 before it could collapse into the water.

Lawsuit claims bank should never have approved multimillion-dollar loan

According to the Boston Globe, Bonomi claims he was “acting under an uncontrollable manic psychosis” when he entered into the mortgage. The lawsuit argues that bipolar disorder can involve irrational risk-taking, impulsive behavior, and reckless spending.

The complaint also alleges JPMorgan Chase “was aware, or willfully avoided acknowledging,” that Bonomi was not competent to enter into the mortgage agreement and should not have approved the loan.

Bonomi claims he paid the full $5.5 million asking price despite the cliffs beneath the home eroding at an estimated 3.8 to 5.6 feet per year. According to the lawsuit, “no rational person” would have purchased the property under those circumstances.

The mansion was demolished in 2025 to prevent its collapse.

He is asking the court to void the remaining $3.85 million mortgage, along with the loan agreement, interest, attorney’s fees and other damages.

The lawsuit also alleges a Chase lending officer ignored a letter stating Bonomi planned to retire in May 2022 because the bank would not ordinarily approve a mortgage for someone planning to retire within three years. Bonomi argued that had the bank followed its own lending standards, the loan would never have been approved.

JPMorgan Chase has denied the allegations and is contesting the claims in court.

Rather than risk having the mansion collapse onto the shoreline below, Bonomi had the house demolished in March 2025 at a reported cost of around $250,000. The property had previously been assessed at more than $4.8 million, but after the demolition, the remaining land was reassessed at approximately $385,000.

A Fordham University law professor told the Boston Globe that Bonomi faces a difficult burden in proving he lacked the legal capacity to enter into the mortgage agreement.