Foreclosure of the Week: 1277 Bergen Street
The list of properties up for foreclosure sale this week is concentrated, once again, in areas like Bushwick, Bed Stuy and, in the case of this house, Crown Heights. This 2,600-square-foot house was purchased by the current owner in 2005 for $800,000. It currently has a lien of $672,632 on it. If you’re interested in…
The list of properties up for foreclosure sale this week is concentrated, once again, in areas like Bushwick, Bed Stuy and, in the case of this house, Crown Heights. This 2,600-square-foot house was purchased by the current owner in 2005 for $800,000. It currently has a lien of $672,632 on it. If you’re interested in Crown Heights, though, this is pretty centrally located and we’re liking the facade. The interiors are anyone’s guess. The public auction takes place tomorrow at 3 p.m., 360 Adams Street, Room 261.
Property #118 [PropertyShark] GMAP
this property isn’t empty. i live there. the landlord receives a guaranteed payment from the city from 3 of the tenants because we used to be in homeless shelters, and received a voucher to get back on our feet. mine is $820/mth for a small studio. there are 7 families who live in this building. 2 in the basement, 2 on the first floor, 1 on the second, and 2 on the 3rd. the three of us who were homeless signed 2 year leases. when i moved in, i requested that the 10 year old carpet be replaced. the landlord refused. the place is OVERRUN with mice, and the landlord, an otherwise friendly trinidadian, couldn’t possibly care less.
wow–thanks Montrose Morris and 1:04–much appreciated.
To 7:43, check http://www.mortgagefraudblog.com
All the info you will need.
Here’s the usual way the scam works. It involves several people, including unscrupulous real estate people, and crooked mortgage/loan officers and their appraisers, and straw buyers, who are the front people.
A property is bought by the real estate company for $300K. They recruit a straw buyer, who has decent credit, and is unconnected to any of the parties. They promise them that if they “buy†this property, by going through the loan application process to a legit lender, they will receive a kickback at closing. The sale price of the house is put at $600K. The applications are put through, usually with the crooked loan officers inflating the straw buyer’s income and assets. The crooked appraiser submits an appraisal of $800K for the $300K house. The straw buyer applies for a mortgage of $700K. When the lending institution looks at the application, they see that a well qualified buyer is buying a house for under its appraised value, so no red flags go up. The fact that the mortgage is over the selling price is not a big deal, as documents are produced for renovation projections, closing costs, etc. The bank ok’s the loan based on fraudulent credit info and the high appraisal. The deal goes through, and a check for $100K is presented to the buyer at closing, so that he/she can begin renovations.
In reality, that 100K is immediately used to pay off the straw buyer, who usually gets around $45K, and the rest of the 300K profit goes to the scammers. Straw buyer either “sells†the property back to the people whom he just “bought†it from, or just bails. Property is now over inflated by 400K, and bank is out that amount when it goes into foreclosure, if the straw buyer bails. They want to sell if for at least $800K to make their money back, including interest, and now this house, which has probably been empty all this time, and neglected, is on the block for over double what it’s worth.
Straw buyer may have ruined his/her credit for a hot minute, but they got paid handsomely, and probably don’t need good credit anyway. If they “sell†the house back to the crooks in the first place (through another straw person or company), then it’s win/win for the bad guys, because they can re-sell it again. Usually, unless they are really greedy, they will sell it legitimately this time, to get rid of it, and disassociate themselves from the property. They win – the neighborhood, the banks, the consumer – we all lose big time.
This goes on all over the country, and is being investigated and prosecuted big time. This is not the same as legal flipping. This is massive, and very profitable, bank fraud.
“How does that real estate scam/straw buyer thing work? I’m kind of an idiot when it comes to those things and I don’t understand it.”
Don’t bother. You can learn it in 30 years. That’s when Real Estate is back.
People there is a fucking crisis going on. Yeah I know, I’m trying to blow shit up, The Central Banks of this planet are trying to prevent a credit meltdown. Banks have stopped loaning each other money and the secondary market for Mortgage Backed Securities are FROZEN, DEAD and KAPUT.
More write-downs are coming down the pike in 2008. You need to be very careful when it comes to you Pension, 401k and Money Market accounts.
There are so many Lis Pendens being filed in the clerks office it will make your head swim. And guess what? There banks are NOT reporting this shit because, they don’t want a run on their bank.
Hey Assholes get a fucking clue. WE ARE FUCKED!
The What
Some ay this war is gonna end…
Here read this
Fed Leads Drive to Strengthen Bank System
http://www.nytimes.com/2007/12/13/business/13fed.html?_r=1&hp&oref=slogin
How does that real estate scam/straw buyer thing work? I’m kind of an idiot when it comes to those things and I don’t understand it.
I checked back on my Landmarking map, and I made a mistake. The above poster is correct – this house is within the landmarked area.
People ask why homes in CHN cost so much, when the neighborhood needs so much, this kind of real estate scamming is partly to blame. Falsely inflated prices raise the comps, raise the prices set by sellers and brokers for nearby properties. 10 years ago, nobody cared, because “nobody” wanted to live here. Things are very different now.
Montrose Morris:
That’s a sad story about a sweet looking house. It appears there’s a story on every corner of CH, then and now.
NOP
This block of Bergen just missed being landmarked, although the block of St. Marks, known as Doctor’s Row, right behind it is. For some people, having a bus route on your block is a downer, for others, it means safety, as these blocks usually have more foot and vehicular traffic on it. Thanks, NOP for more enlightening background and tales of CH.
From the financial history of this building, I think that 2:11 may well be right. More than likely this house was bought by shady characters, flipped to a straw buyer, who flipped it again. Each time all the equity was sucked out, the price went up, and the final owner really doesn’t care if it is forclosed on, as he made at least 800K selling it to himself anyway. There were a couple of gangs (no different, in my opinion than any other criminal gang) running these operations in CHN over the last couple of years, and several of them, have finally been put out of business by the DA’s office.
These greedy bastards are as detrimental to a neighborhood as any back alley mugger. Only difference is that they wear suits. They help keep neighborhoods down by flipping houses, raising the prices of real estate everywhere, but they do no improvements, provide no additional housing for anyone, and basically suck the money out of valuable and needed housing stock, leaving a dessicated shell that is now on the auction block for much more than is necessary, making it impossible for middle or upper middle class buyers to get them, and they always need thousands of $$ in repairs, as they are never improved. These people are vampires, and this house is one of their victims.