The New York Post is reporting that DCCC Chair and Congressman for NY’s 2nd Congressional district got a sweetheart deal from JPMorgan Chase when he unloaded his property in Dix Hills Long Island. Israel, who is in the middle of a divorce from wife and family court judge Marlene Budd, sold his home for $93K less than he owed. Lo and behold, the bank said…don’t worry Steverino it’s cool what’s 93 grand between friends.
The congressman’s mortgage is considerably higher than the value of his home.
He and his wife, Family Court Judge [M]Arlene Budd, bought their seven-room Dix Hills home in 2004 for $580,000.
They now owe $553,000 on the mortgage.
But mortgage holder JPMorgan Chase bailed Israel out — by approving what real-estate executives call a “short sale” for $460,000. The deal forgives $93,000 in debt Israel owes the bank — the difference between his mortgage obligation and the sale.
The bank eats the 17 percent loss, and, presto, Israel’s debt problem disappears.
Long Island real-estate brokers questioned the deal because banks have rejected similar debt-reduction breaks for other strapped homeowners with fewer assets than the congressman.
Israel’s financial statement shows he has a separate mortgage and home-equity loan valued at between $250,000 and $500,000 on a second residence — an apartment he owns in Washington.
“I don’t understand how he [Israel] is eligible for this program when numerous other homeowners are struggling and are not being given this same opportunity,” said Grace Slezak, owner of Destiny International Realty.
“In my professional opinion,” the 26-year real-estate vet said, “I don’t see how he would qualify for this; it appears highly irregular.”
Israel’s spin team defended the bank bailout of his mortgage, citing a marital breakup and a depressed housing market.
“Steve and his wife are going through a divorce and were forced to sell their home in a market that everyone understands. They did what everyone else would do: found a potential buyer and had a lawyer negotiate the sale with all parties for a price consistent with comparable homes in the neighborhood,” said Israel spokeswoman Samantha Slater.
However the real question is if anyone else were going through a divorce and sold their house during a bad market would the bank forgive $93K of their loan? Unlikely.
But Republican critics were not buying Israel’s explanation. They requested a House ethics committee probe of what they view as a sweetheart bank break for the congressman.
“It is extremely disturbing because there are families across Long Island, struggling under the weight of their mortgages in this economy, who are unable to have their debt forgiven the way Congressman Israel is apparently is doing,” said Chris Thompson, campaign manager for Israel’s Republican opponent, Stephen Labate.
The Labate aide also said the loan forgiveness “raises the suspicion of a private deal being made between a bank who received a bailout and a congressman who voted for that bailout.”
Israel voted for the law, the Troubled Asset Relied Program, that provided billions of dollars to banks during the Wall Street meltdown in 2008. JPMorgan received $25 billion, which it repaid, with interest, to the government.
On the bright side, maybe now that he got a sweetheart deal from the bank he can finally pay the couple of thousand he stiffed the Dix Hills Jewish Center out of, when he left the congregation during his first divorce.
It does seem that every time Israel gets divorced, someone isn’t going to be paid.