Friday, January 31, 2014

Guest Post From A Steve Israel Constituent


There are no words to describe the contempt I feel after reading an op-ed by my Congressman, Steve Israel, entitled The State of Our Middle Class. How pretentious that the same man whose mortgage obligation was forgiven by "friendly" banksters would opine on the struggles of the middle class. People all across Long Island are struggling under the weight of upside down mortgages, and most could never get the sweetheart deal that Congressman Israel obtained.

It is therefore rather shocking that Steve Israel is the current Congressman in our district. He and his second former wife are guilty of using their positions and political connections to get a sweetheart deal and walk away from their mortgages in an ill-begotten short sale without any penalties or repercussions; something that any of us with their level of income could never have obtained. Perhaps the populous were not made aware of this in time to affect the previous election. When one uses their political position for personal gain at the expense of the people, it is unethical, to say the least.

  Enumerated here are the facts and documented financial transactions regarding the Dix Hills house purchased, mortgaged, financed, and refinanced by Steve Israel and his then wife, Marlene Budd:

Deed Date:  June 29, 2004 Purchase Dix Hills house for $580,000.

After numerous financial machinations including several mortgages, refinances, and home equity loans from July 2004 through October 2006 from the following lenders: Homebridge Mortgage Bankers Corp., National City Bank, Greenpoint Mortgage Funding, CIT Group Consumer Finance Inc., and JP Morgan Chase Bank NA, the total debt on their Dix Hills house in October 2006 was $676,500. Based on closed real estate transactions in the area, their Dix Hills home was never worth the amount of the total mortgages on it.

In addition, Steve Israel and Marlene Budd purchased an apartment in Washington, D.C. in February 2006 for $377,785 and obtained a first mortgage in the amount of $302,228 and a second mortgage in the amount of $56,667 both from Wachovia Bank; mortgage debt on this purchase totals $358,895.

Total Mortgage Debt on their two homes in October 2006 was approximately $ 1,035,395. Their debt to equity ratio was obviously far greater than the norms allowable for a conventional mortgage.

Point of fact: anytime a lender forgives (writes-down) their borrower's debt to accommodate a settlement, they are required to report the amount of the write-down to the IRS and it can be considered income to the borrower. Treated as income, the written-down amount becomes taxable and would need to be reported on the borrower's income tax return. Therefore, if a person obtains debt forgiveness, they must pay taxes on it.  Did they? NO.

Congressman Steve Israel, in 2007, voted for the Mortgage Debt Relief Act (HR3648, 110th congress) which prevents mortgage debt forgiveness from being taxed. The law was extended through 2012 by the Emergency Economic Stabilization Act of  2008 for which Congressman Israel voted. Right before the law was to expire, the Congressman completed a short sale on his home. Congressman Israel benefited from the law which he voted for and; therefore, he did NOT have to pay taxes on the approximately $ 100,000 debt forgiveness and further, he will NOT pay his "fair share" to the U.S. Treasury.

Requirements for a short sale are that the home's value is less than the mortgage amount owed AND the homeowners (borrowers) MUST have documented Financial Hardship. Does anyone believe that these two people; one a Congressman and the other a Judge, who also own another residence in Washington, D.C., have "no assets" and are in financial hardship? Their salaries and their ownership of an additional residence would seem to preclude them from meeting the "no assets" qualifying requirement. In addition, the combined salaries of Steve Israel and his wife would indicate a stable cash flow that could meet any requirement by the lender to pay back the difference between the sale price and the amount owed. The particulars of the short sale of their Dix Hills house are: contract on February 10, 2012 and closed on October 5, 2012 in the amount of $460,000.

Please note the extension date of the "law" for which Congressman Israel voted and the transaction dates for the sale of their Dix Hills home.

The information offered here has been obtained thorough research of Public Records and County Clerk websites in Suffolk County and Washington, D.C. As a professional financial analyst with over 25 years experience, I have extensive knowledge and the ability to research all aspects of real property transactions to determine market values, analyze financial documentation and accurately evaluate properties and their appropriate loan to value ratios. The statements and conclusions drawn reflect a summary analysis based on the irrefutable data obtained, combined with many years of experience. There are numerous issues here which seem to present questions as to the ethics and legality of Congressman Israel's and his wife's financial dealings. It is stunning that there appears to be no congressional investigation

Labels: ,


Post a Comment

<< Home