• Lisa Simpson
• Aug 5,2010
• In: Foreclosure

Foreclosure Auctions are Increasing in Manhattan

Compared to other parts of the country foreclosure auctions have been fewer in Manhattan. But lately the number has started to increase. The residents are now apprehensive of the fallout from abandoned houses. The condo boards are also worried as their charges are common and yet many units are being foreclosed upon, reducing the revenue intake.

Carelessness and a lax attitude are as much to blame for increase in foreclosures in Manhattan as are personal failings and problems.

In August an apartment on the 9th floor overlooking Broadway (89th Street) was placed for auction at the county courthouse of New York. But no bidders appeared as the minimum price tag was $1.67 million. As such the property returned to the bank – JPMorgan Chase.

Initially it would appear that the price was a bargain for an apartment boasting of 7 rooms covering 1,837 square feet. The ceiling was high and there was separate living room, a dining room and three bed rooms. The price calculated to $910 per square feet – a real bargain considering the locality even in these hard days.

But the outside glitter of the apartment is not all real gold. It has been lived in by tenants that have been protected by rent regulations of the state since the property was transformed into a condo in 1986. It means tenants cannot be thrown out and this brings down considerably the value of the unit.

As per the records one Mustafa Maskov bought the apartment in July 2007 for $1.66 million during the time of the housing boom. Baskov had taken a mortgage of $1.5 million from Washington Mutual. The latter bank collapsed and was bought over by JPMorgan.

Baskov had purchased the unit from a person who had previously on that day paid $840,000 of it. On the same day of drama Baskov paid $2.45 million for another smaller unit in the same building. That too is facing foreclosure. After two months he got a home equity loan for $375,000 on the bigger unit from Wells Fargo.

But immediately afterwards, he stopped his mortgage payments as well as the common charges and vanished leaving behind unpaid dues amounting to more then $20,000 for common utility charges. On January this year foreclosure proceedings got underway.

Ronald J. Gold is the lawyer representing the condo board. He thinks this is a typical example of reckless lending. He said, “How this guy was able to get his mortgage and get his secondary financing and then buy a second apartment is a mystery.”

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