When bad loans go really bad

20 Carpenters Brook, a teardown on 2 acres in Greenwich’s armpit territory (that would be under the flight path of Westchester Airport, off Bedford), is back on the market again after recently being reported as having an accepted offer. It was listed at $1.350 million, now it’s asking $1.5 million which means that whoever owns the loan rejected the first offer.

In 2007 Washington Mutual, now deceased, loaned $3.080 million on this piece of land and not to be outdone, Aegis tossed in an additional $250,000. Loans weren’t paid, borrowers moved out and the house and the loans have been deteriorating ever since.

But while someone took a bath on this one, it wasn’t the current holder of the debt. WaMu went down and its “assets” were dumped for pennies on the dollar. Aegis? Who knows what happened to them but as second in line, they aren’t getting anything anyway. I’d have thought that whatever the first offer was last month, it should have been accepted. Instead, the house will sit again and, eventually, sell for even less. Dumb move.


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5 responses to “When bad loans go really bad

  1. anonymous

    There is a huge mold issue in that house that does not fully present itself until a professional inspection is done. It is at that point that the deal falls apart. As far as raising the price goes – I just don’t get it.

    • Mold’s not really a problem because it’s land only – that house is headed for a dumpster. Raising the price is because, as I tried to explain but obviously did not do so clearly enough, is that the lender rejected the original offer, as is its right in such situations, and is demanding more. So the price goes up to satisfy the lender, it doesn’t sell and eventually, the price goes down again. This is not a case of a dumb agent trying to be radical, it’s a dumb bank refusing to acknowledge its loss.

  2. anonymous

    I know two parties who were interested in that house over the last 3 years and neither were planning on tearing it down. The lender accepted their offers and both walked away after inspections. Crappy lot that would not be worth buying at $1 million, even if you love that area.

  3. FF

    Everything in this latest iteration of the short sale (8.0?) depends on the almighty appraisal. This appraisal is usually farmed out to an upstate appraisal company willing to accept $89 and professional liability (usually a sole practitioner, though often a call-center with subcontractors at the ready). They come with four comps (because the standard appraisal form has four blanks) and if you know those comps, you know what the appraisal will be, regardless of condition or any other circumstance. Each bank will only take a set percentage below that amount, from Chase’s 80% to other banks with 100%. Then your negotiatior will tell you that they “won’t take an offer below” that number. How long it is on the market, how different it is to the comps – totally irrelevant. Usually it takes a few months to reach this revelation