While Long Islanders are struggling to keep their jobs and their homes, Steve Israel, who used his real estate like an ATM, gets to qualify for mortgage deals from banks he bailed out. Wow, sweet!
Congressman Steve Israel has a checkered past that includes rumors of illicit sexual liaisons, one which allegedly resulted in an out-of-wedlock child while he was still married to his last wife who then kicked him out.
Last year, Israel said he sympathized with the occupiers who were invading major cities throughout the country with their anti-capitalism, anti-banks, anti-Wall Street messages.
Irony of ironies is the fact that for all the sympathy he claimed to feel for them, he is in bed with the Wall Street they deplore. The second biggest donors to Steve Israel’s campaign, right after Big Labor, is Wall Street.
It doesn’t stop there, Congressman Israel serves on the House Committee on Financial Services, the committee that monitors Wall Street to protect the rest of us. Israel’s campaign donors are Wall Street firms [banks, investment firms, venture capitalists, big insurance, stock and commodity trading companies] he oversees. We are supposed to believe the donations they give him do not affect his ability to supervise them.
Among Steve Israel’s donors are his original mortgage lenders who also donated to the Democratic Congressional Campaign Committee he chairs. One mortgage was from the now bankrupt Homebridge Mortgage Bankers Corp who also refinanced his home with the two new loans a year later.
The now-defunct Homebridge is being sued or investigated for disability discrimination, foreclosure fraud and conflict of interest, and not paying their lawyers. They also didn’t make payroll but they were sorry. There are other lawsuits against them, and complaints have been filed with Consumers Affairs.
Look at this ad from Homebridge, think subprime crisis, and think Steve Israel:
Homebridge’s Chairman Nicholas Brasafolis and his wife as well as the President of Homebridge Mortgage contributed more than $35,000 to Israel’s campaign and committee between 2003 – 2005.
In 2004, Congressman Israel and his wife at the time, Marlene Budd, bought a Dix Hills home with two mortgages, one from Homebridge for $464,000, another from National City Bank for $57,950, and a down payment of 10% of the original purchase price.
Little more than a year later, they refinanced. Homebridge, his campaign bundlers, gave him and his wife two loans totaling $571,500 for a house they bought for $580,000, satisfying the original loans. The loans equalled 98.5% of the original price, giving Mr. Israel most of his down payment back. Cool!
Now here is where it gets even more interesting. The next year, in 2006, the couple got another mortgage on the same property for $105,000 from JP Morgan Chase. That brought their total loans on the property to $675,500, about $100,00 more than they paid in 2004. At the same time they purchased a DC apartment for $416,000.
Given Mr. Israel’s shaky marital history, it is no wonder Judge Budd threw him out. Neither appeared to want the Dix Hills house with the negative equity. Gee, wonder why.
Mr. Israel had a solution to get the monkey off his back and put it on the lender. He arranged for a short sale.
The Dix Hills house sold recently for $460,000 in the short sale. JP Morgan Chase forgave $93,000 of their “underwater mortgage” even though the program is not meant for well-off congressmen but rather for poor and middle class homeowners who literally cannot survive.
Congressman Israel used his house as an ATM and then went to a bank he helped bail out to receive yet another payoff. Congressman Israel voted to bailout JP Morgan Chase in 2008 with $25 billion of TARP money.
Are we supposed to believe this is not quid pro quo? Congessman Israel says yes, we are.
Ed Cox, the New York State GOP Chairman, released a statement regarding the loan forgiveness:
“On the surface it would appear that he would not qualify for such a reduction, so we asked the House Ethics Committee to investigate the circumstances that surround what looks to be a highly questionable transaction and a potential abuse of power.”
Mr. Labate, Steve Israel’s opponent in this year’s 3rd congressional race, believes this will hurt Steve Israel this election:
“Some have lost their homes and others have been forced into bankruptcy and they may be convinced that the Congressman used his influence and position to secure this sweetheart deal from his bank.” Labate said.
Stephanie Slater, Israel’s communications director, told The New York Post that Congressman Israel and his wife, filed for divorce in 2011, after 8 years of marriage. This combined with the depressed housing market entitled them to be forgiven $93,000 of their home loan on a short sale of their $553,000 Dix Hills house.
Huh? What? Seriously? That means what? Half of Long Islanders qualify? My son and his wife were out of work for months and couldn’t qualify but he does?
Congressman Israel doesn’t even have to pay the taxes on the cancellation of debt because of another bailout he voted for, the Economic Stabilization Act of 20008 which extends the Mortgage Debt Relief Act. Normally, taxes have to be paid on the forgiven loan because it is considered income. The MDRA allowed Israel to skate on this.
Isn’t that unpatriotic of him? What happened to the new economic patriotism touted by his party? For everyone but him?
Suffolk County and Nassau County have the second highest foreclosure rate in New York! These programs were supposed to help them, not fetter politicians’ nests.
Congressman Israel and his ex-wife Marlene Budd, a family court judge, made about $300,000 a year. Between the loans on their DC Apartment and the Dix Hills house, they owed about a million dollars. The Labate campaign says “their debt equity would be greater than the norms allowed for a conventional mortgage at their pay grade.”
Israel lived beyond his means, got bailed out and didn’t pay taxes on his windfall which was afforded by donors to his campaign whom he also bailed out. No pay-for-play here of course.
Is Steve Israel Long Island’s version of a Chris Dodd-Countrywide crook?