Saunders, Real Estate, Hamptons

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Mar 25, 2009 1:15 PMPublication: The Southampton Press

Banks are foreclosing on 11 homes owned by Westhampton Beach businessman

Mar 25, 2009 1:15 PM

Mr. MacPherson did not respond to several calls to the Soho Journal office in Manhattan seeking comment. On one call, John Coakley, a man who picked up the phone at the Journal office, said that Mr. MacPherson was referring all inquiries to attorney Patricia Weiss of Sag Harbor. Ms. Weiss did not return several calls seeking comment.

Irwin Popkin of Shirley, the attorney representing Mr. MacPherson in the foreclosure actions, said he had no comment on his client’s court cases.

Depending on how the mortgage default proceedings against Mr. MacPherson advance—experts say foreclosures typically take between two and three years to wind their way through the courts—Mr. Moracho and his family could eventually find themselves out on the street.

“It’s not fair,” said a 21-year-old woman who is renting another home tucked off Hills Station Road in Shinnecock Hills that is also owned by Mr. MacPherson and going into foreclosure.

The woman, who declined to give her name, says she lives in the two-story home with her husband, a landscaper, their toddler son, and other family members. She said that they always pay their $3,000-a-month rent on time. In a second interview, the woman added that she heard that Mr. MacPherson’s property manager, whom she identified as Robert Mazzone of Hampton Bays, was telling other families that they had to vacate their homes. She said she did not know why they were ordered to do so.

When reached at Hampton Sales and Rental Corporation on Montauk Highway in Hampton Bays, Mr. Mazzone said he did not know anything about Mr. MacPherson’s pending foreclosures. He also would not confirm whether or not he was Mr. MacPherson’s property manager. He referred all questions to Mr. MacPherson, whose permanent address is in Manhattan.

Michael McCarthy, the legal counsel for the Long Island Housing Partnership in Hauppauge, said that some tenants have as little as 72 hours to vacate their homes once a bank officially repossesses a home owned by a landlord. Founded in 1988, the Long Island Housing Partnership is a not-for-profit organization whose mission is to provide opportunities to those unable to secure affordable housing.

Keyisha Wright, the director of Housing and Urban Development counseling at the Long Island Housing Partnership, said that eviction notices often come as a complete surprise to the tenants, even those who have been paying their rent in full and on time.

Additionally, there are not many resources available to renters who are evicted because their landlord defaulted on a mortgage, Ms. Wright said. In contrast, those who own homes that are being foreclosed upon have a wealth of options at their disposal, including the restructuring of their mortgages, before losing their homes.

“There really aren’t any programs out there for them,” Ms. Wright said of renters. “It’s very sad.”

Court documents show that Mr. MacPherson secured a $1,440,000 mortgage, with an 8.5-percent interest rate, from First Central Savings Bank in March 2007 against the Hills Station Road home that is now being rented by the 21-year-old woman and her family.

According to the foreclosure proceedings, Mr. MacPherson was required to make monthly payments totaling $11,072.35 starting on May 1, 2007. But court records show that Mr. MacPherson stopped making payments on the mortgage and now owes $1,438,249.12, plus interest, dating back to June 1, 2007.

Meanwhile, Mr. MacPherson secured a $1 million mortgage in February 2007 on the Shinnecock Hills Road home now being rented by Mr. Moracho, according to court records. He now owes $1,059,869.30 on that note, according to documents. Deed and transfer records show that Mr. MacPherson purchased the home for $998,000 in November 2005.

Real estate experts explained that there is nothing illegal about securing multiple mortgages as long as the applicant does not inflate his income and holdings on the application, and does not have an appraiser artificially inflate the value of a home that is being purchased so he can secure more money than needed to buy a home.

For example, it would be illegal for an applicant to secure a $1 million loan in order to buy a property that is only worth $500,000 but has been wrongfully appraised at $1 million. In such a scenario, the person securing the mortgage could use half the money to pay off the mortgage and either pocket the remainder or use it to invest in additional properties.

“If you buy a house for $500,000, and re-finance for $1 million, you can pay off the first mortgage,” Mr. McCarthy explained. “Then you cash out for $500,000—and you won’t care if you lost the house.”

It was unclear as of early Wednesday afternoon if the fraud and grand larceny charges filed against Mr. MacPherson stem from the way he obtained the mortgages for his properties.

The Majors Path home owned by Mr. MacPherson was appraised by Southampton Town at $689,300 in 2008, according to town records. Mr. MacPherson secured a $1 million mortgage on the home in September 2006, according to court records. He purchased the home for $667,000 in 2005, according to town records.

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There are others that have done this same scheme - hopefully the DA is enforcing the law to everyone and not just "name" targets.
Take a close look around Hampton West Estates Mr. DA.
By North of Highway (280), Westhampton Beach on Mar 25, 09 1:53 PM