Peter Tesei and creative financing

Your Countrywide banker: he understands!

Your Countrywide banker: he understands!

Dear Peter:

Way back on April, 24, 2012, I questioned how you could afford to buy a new house on 11 Indian Pass Road (in a private sale) for $1.245 million and take on a $998,000 mortgage from Luxury Mortgage, while still owing $500,000 on your unsold condominium at 78 River Road. You never answered.

Since then, your River Road condo, which you purchased for $800,000 in 2005, was sold (July 13, 2012), for $805,000. This presumably paid off the $507,785 mortgage on the place, but still left you with that million-dollar mortgage on the new one. I’m puzzled.

Your salary is $126,400, or $10,500 per month. Assuming a combined state and federal tax rate of 30%, that nets out to $7,350 per month, out of which you must pay the mortgage ($4,481, at 3.5%) and taxes ($706.50), which in turn leaves $2,162.50 to pay the insurance, utilities, maintenance on the house, and feed and clothe your family. What a financial wizard you must be, to accomplish all that – if only you would do the same thing for our town!

That salary of $126,400 means, according to this calculator, that you can afford no more than a $464,000 home*. Who at Luxury Mortgage approved you for a $1 million loan at all, let alone a mortgage in that amount when you  still owed $500,000 on the condominium? Name, please?

Was there a guarantor on your note? Do you have other assets to secure what is, in effect, a no-doc loan? Did your friends in town pitch in to help out? Which friends?

Inquiring minds want to know.

(Signed)

Christopher C. Fountain

UPDATE: Someone who’s seen the terms of the loan says it’s a conventional mortgage, not interest-only, mthly payment around $5,000. Plus, of course, taxes and insurance etc.

75 Comments

Filed under Right wing nut rantings

75 responses to “Peter Tesei and creative financing

  1. 3Generations

    Hey Chris,

    Be careful. Karma’s a nasty bastard

  2. Anonymous

    Oh and the kid gloves come off! Time to break out the popcorn…

    Don’t threaten Chris Fountain, Blogger, Attorney (non-practicing) and Douchebag Finder.

  3. AJ

    What, you think you can hide under a stupid hat and no one will know who you are?

  4. housecat

    …and the gloves come off. Think Tesei can “punch above his weight?” I’m thinking of starting a pool for this one.

  5. Riverside Chick

    No income verification mortgage?

  6. Patrick

    Why is it relevant? Maybe his parents co-signed the loan? Who cares. What’s the point.

    • The First Selectman is an elected official of this town; in fact, he is said to be the leader of this town (I know, I know). A loan granted to a politician, especially a loan that’s at least twice as large as his income can support, should be of interest to anyone who like their politics free of hidden favors and special friends. Who approved a loan so grossly above lending guidelines? Why? Is Tesei beholden to a financial backer?
      If you were around, you saw then First Selectman Lowell Weiker sell out the town to fund his political ambitions. The reason you can no longer see Long Island Sound from the top of the Avenue, for instance, is that Weiker gave the air rights along the train station to his friend and political rabbi, Ashforth. Greenwich Plaza now blocks your view along the entire Avenue, thus destroying one of the finest vistas in this town.
      And that was just a start, for Weiker. Is Peter Tesei doing the same thing? Who knows?
      But I care.

  7. Al Dente

    Maybe he won the Publisher’s Clearinghouse

  8. Anonymous

    PRINCIPLES FROM “HOW TO WIN FRIENDS AND INFLUENCE PEOPLE.” (by Dale Carnegie )

    BECOME A FRIENDLIER PERSON

    1. Don’t criticize, condemn or complain.
    2. Give honest, sincere appreciation.
    3. Arouse in the other person an eager want.
    4. Become genuinely interested in other people.
    5. Smile.
    6. Remember that a person’s name is to that person the most important sound in any language.
    7. Be a good listener. Encourage others to talk about themselves.
    8. Talk in terms of the other person’s interest.
    9. Make the other person feel important – and do so sincerely.
    10 The only way to get the best of an argument is to avoid it.

    WIN PEOPLE TO YOUR WAY OF THINKING

    11. Show respect for the other person’s opinions. Never say, “You’re wrong.” 12. If you are wrong, admit it quickly and emphatically.
    13. Begin in a friendly way.
    14. Get the other person saying, “Yes, yes” immediately.
    15. Let the other person do a great deal of the talking.
    16. Let the other person feel that the idea is his or hers.
    17. Try honestly to see things from the other person’s point of view.
    18. Be sympathetic with the other person’s ideas and desires.
    19. Appeal to the nobler motives.
    20. Dramatize your ideas.

    BE A LEADER

    21. Throw down a challenge.
    22. Begin with praise and honest appreciation.
    23. Call attention to people’s mistakes indirectly.
    24. Talk about your own mistakes before criticizing the other person.
    25. Ask questions instead of giving direct orders.
    26. Let the other person save face.
    27. Praise the slightest and every improvement. Be “lavish in your praise.”
    28. Give the other person a fine reputation to live up to.
    29. Use encouragement. Make the fault seem easy to correct.
    30. Make the other person happy about doing the thing you suggest.

  9. Anonymous

    31. Don’t be a douchebag.

  10. CatoRenasci

    My guess is that FS Tesi has one of those interest only balloon mortgages at a favorable rate. If he had a 5 or 7 year interest only $1mm mortgage at, say 3%, his payments would only be $30,000 per year, or $2,500/month, plus insurance and taxes. There are plenty of people with either money or influence who are able to borrow on an interest only basis, I see a surprising amount of it.

    • On Monday I’ll go to Town Hall and pull the mortgage note. Until then, let’s grant you your interest only theory, and deduct $2,500 (interest), $745 (taxes) and, say, $250 (insurance) from his monthly take home of $7,350. Net: $3,855. One can certainly get by on $48,000 per year, after housing costs; many residents do. My question is, does Peter do so, or is someone helping him pay his mortgage?

  11. Stanwich

    Chris, really? Lay off, its none of our business. There are no financial reporting requirements for the first selectman position, he is under no obligation to disclose any of the information you seem so interested in. He could have inherited the money, or made it at BNY (unlikely), but either way it is none of our collective business. You keep harping on this and insinuating that something is terribly wrong with the situation. You’ve made a tenuous connection to Weicker, which is a huge stretch. Maybe Tesei has higher office ambitions, but he is no idiot. He understands that as a Republican in this congressional district and state, he won’t go very far…at least right now.

    Now getting back to Weicker, he may have “sold out” the town for political reasons (don’t know as I was still in kindergarten at the time) but the “sell out” you so vehemently despise has produced the most valuable commercial property in Greenwich. The property taxes from Greenwich Plaza help keep our taxes nice and low. And by the way, it houses hedge funds, private equity firms, etc. that attract wealthy residents that buy expensive cars, pay big taxes on their homes, etc., and on and on and on. So who f@cking cares that you can’t see down Greenwich Ave to the water? You said yourself many times that you hardly ever shop Greenwich Ave anyway.

    Tesei isn’t the monster you make him out to be. He is actually a very capable guy and a pretty nice person. He has the townie cred and also has some polish to him. While I personally would like to see him take a more firm stance on important issues, the town could do far worse.

    So drop the witch hunt. As one of your loyal readers I can’t tell you that you’re wrong to be questioning this stuff. It is so unbecoming and it doesn’t matter. You should focus on beating Tesei up over other issues, harping on this issue just discredits your good name.

    • greenwich dude

      CF

      I love this blog and your fire, but I kinda agree with Stanwich for what it’s worth. I don’t even see a place for anyone to get critical about your blog w/r/t bullying, so from here it looks like he was talking about something else.

    • I forget what the air rights were leased for Stan, but they were substantially below market rates then and are laughably below now. And the buildings’ owner has the right to extend them another 20 years at the expiration of the first term, which is coming up, I believe, next year.

      As for Tesei, it is relevant if someone is paying his mortgage; not if its in-laws or parents, obviously, but if it’s an unrelated party, that’s an issue. And I raise it as an issue because, on paper, there’s no way he can afford this mortgage nor would it have been granted to an ordinary mortal. My question is, why was it?
      UPDATE: Here you go, Stan: Greenwich Plaza is renting for $100 per sq. ft., pays the town $127,000 per year. 70 year lease to Mr. Ashforth

    • dogwalker

      Yeah, I’m on the fence. I agree with Stanwich, but I’d be very upset with someone insinuating I had anything to do with a kid shooting himself, even if the connection is completely preposterous.

    • Cos Cobber

      Good post on all points Stanwich. Drifting off tangent, the town should sell the BOE building to a office developer (as long as the building isn’t dramatically increased in size) and the BOE should move to some cheaper rent location than the heart of the ave where the town could be generating more tax income.

    • Old Timer

      Hey Mr. Stanwich, you may have been in kindergarten when we lost the view of Long Island Sound, but a lot of us are old enough to remember, and we DO care. That’s the main issue I have with your reply.

  12. ajnock

    Maybe Ray Dalio is managing his money.

  13. weakleyhollow

    It’s the miracle that’s been happening daily for so many years in our fair land, Chris. People of modest means go into “public service” at a modest salary, and years later, magically emerge as men of wealth. Investment bankers and real estate investors are desperate to be their friends and advisors. I’m sure they would want to be our friends, too, if they could only find us.

    • Greenwich Resident

      Do you remember all of Peter’s years on the BET that he worked hard for the Town, keeping taxes low while maintaining Town Services for the residents? He did it without pay. Well I do. Peter’s one of the good guys and this sounds more like a personal vendetta. Just saying.

  14. Midcountry

    People have inherited money, unearned income, parents, spouses or children or even trusts that can help pay for a place and savings from years of working. Just because an official has a moderate salary does not mean that person is of moderate wealth. Unless you know the finances of a person, you have no idea of the financial situation.

    • Peter Tesei is a nice schlep from Cos Cob. If he has trust funds, wealthy parents or a Canadian gold mine in his life, he’s kept them well hidden.

    • AJ

      That may be true. And when you live a private life it is your private business. But when you lead a public life, that is, hold an elected public office, then it is the public’s right to know. What’s laughable is that he’s complaining about people hiding behind anonymity while he himself is hardly being forthright.

  15. Anonymous

    Maybe the person helping with mortgage payment is his wife? She works full time and runs her own treatment center.
    http://www.atcgreenwich.com/

  16. Midcountry

    This guy is part of a family that has 5 generations in Greenwich. Must be some money there. Three million, one million, whatever inheritance would not be announced in bright lights. Furthermore, his wife is a nurse practitioner with her own business who surely makes a nice six figure income. They easily have a $250,000 income, or very close to that without any unearned, and there is probably other money there as well.

    • Five generations of Cos Cobbers may be a dynasty, but not, perhaps, the financial success often associated with that term.
      I hear the wife no longer practices, by the way.

      • Riverside

        Peter’s wife does still practice, although she has just been taking time off following her treatment for breast cancer (you may know she underwent a double mastectomy). She is a young woman and was certainly working full time when they got the mortgage, and I am sure missing work during her treatment has been been tough for their family (because of both the financial burdens and the challenges of caring for their young children and a sick wife.)

        Anyway, I think Peter’s a good guy, and although I have been a loyal reader and don’t want to criticize you, I find it deeply ironic that you are making insinuations about his ethics with absolutely no evidence whatsoever (and ignoring the obviously answer to your “questions” – i.e. a second income from his wife’s psychology practice), which in my book is a move of very questionable ethics itself, especially since you are just trying to hurt him for what he said.

        • I asked a question: how did a public official earning $120,000 a year qualify for $1 million mortgage? That’s an entirely fair question when asked of a public official. I’m sorry the man’s wife has been ill, even sorrier to learn that the family has been struggling to pay its bills; how does that make my question irrelevant or out of bounds?

        • Greenwich Resident

          Riverside, that’s far to much personal information shared here! Her medical history is her personal business. Many possibilities have been offered since this particular blog started & obviously none of the negavtive respondents are interested because they just want to make it sound like the Tesei’s have done something underhanded. No amount of possible logic matters becaue they seem to be out for blood. Why, yet remains to be shared.

        • Anonymous

          Does it not concern you that the First Selectman is well known by you to be in financial distress and having trouble paying his bills? The temptations, given his ability to influence the allocations of a half-billion dollar budget can be profound and dangerous

    • AJ

      5 generations in Greenwich? So now he’s old money, is he?

  17. townie

    his wife has a great job!

    • She’s a stress therapist. That’s got to be a wonderful asset for any politician, but I doubt a nurse in a walk-up office in Cos Cob pulls down a hedgie’s salary.

      • Midcountry

        Actually, she may earn quite a nice living. In some wealthier areas, and even in good schools in poorer areas, there is a habit of school administrators “strongly suggesting” kids get a certain type of therapy. Your kid is going to be out of private school, suspended from school, not promoted to the next grade, whatever if you do not sign up those high priced therapists. New York City has a cottage industry of highly paid workers of all vintages in the social work/ psychology and psychiatry area. Parents pay big bucks out of pocket for these “services” lest the worst happens to little James or Ashley. Some of it is covered by insurance, but often there is a hefty out of pocket contribution by the parents.

  18. Anonymous

    I know it’s shocking for someone like you trapped in the 50s, but Mrs. Tesei is the breadwinner in the family. She is a very successful child psychologist and Peter is a public servant because he wants to serve his community.

  19. Midcountry

    The truth is, I remember working with some very rich people who owned relatively modest ranch homes in Greenwich. One guy i knew had a split level home on a busy street in the equivalent of Stamford and left a $50 million real estate business when he died many years ago. His wife never moved. Only knew how rich he was because knew him personally. Neighbors would never know the financial situation.

  20. Riverslide

    Yeah, you really have no idea how much his wife brings in. It could easily be more than enough for the mortgage without being anywhere near “hedgie” level income.

    I like Peter and his family a lot, but think this issue would be fair game, if, big IF, you had a modicum of logic on your side, which you don’t, as you seem too sexist or ignorant to allow for the possibility of the wife earning a healthy salary.

    There, I’m giving it to you with the bark on, as you are to Peter.

  21. Anonymous

    is tesei like john kerry, with a sugar momma while hubby plays politics?

    by the way 400 or so grand gross and little to no debt makes that loan semi-affordable if it could hit the 45 dti range.

    since it’s from a mortgage brokerage, that loan was sold to someone. luxury homes or whatever the name is doesn’t own that note, guaranteed.

    that would mean that if it was a sweetheart deal (par pricing, no fees, etc), luxury homes facilitated it and got the mortgage conforming to its investor guidelines. i doubt they’d be so stupid as to fabricate docs. and there are stated income non-conforming jumbos out there. at 3.5% though, that’d be a gem. sign me up.

  22. maybe he’s doing the Walter White/Heisenberg thing?

  23. burningmadolf

    CF, has struck a nerve. Can’t wait for the “note news” on Monday.
    Any chance ATC contracts with the schools?

  24. Anonymous

    Surely ATC doesn’t have contracts with any state or local governments. That would be improper.

    • Riverside Chick

      Really the question to Tesci is Have the kids who are responsible for the assault been identified? From what I understand , the sister at the least can identify them. Have they been suspended fron school and are they being brought up on charges? For someone who preeches about the importance of school safety, I don’t feel safe knowing that kids that violently assault other kids are still going to school. Please get some balls Tesci!

  25. Anonymous

    Is Peter Tesci related to Joe Pesci?

  26. Greenwich Resident

    So Chris, you want Peter to tell you how he bought his house but for Greenwich a house priced at $1.245 is a rather moderate price.

    Oh, Why did you delete 2 of my postings? Didn’t like what was said? Well it is your blog you can do & say what you please.

    • AJ

      While one and a quarter million may be a moderately priced house for Greenwich, it’s still not chump change — not the kind of wad you’d find lying in the gutter that fell out of somebody’s pocket!

    • GR, I occasionally delete duplicate, repetitive comments, just to keep the comment pages flowing. After your fifth comment, which was identical to the previous four, I knocked a few off.

  27. Balzac

    This topic is a tempest in a teapot. No one has any facts indicating wrong-doing. Instead, some bloggers just don’t understand Peter’s finances: not surprising since they are private. And AJ exemplifies the silliness by concluding that since he (AJ) can’t understand or doesn’t like Peter’s finances, that creates an obligation for Peter to disclose. Nonsense.

    Let’s get back to real topics: democrats burning through your money, real estate, chicks (Walt…)

    • AJ

      How can one understand what is not disclosed. That’s sort of like trying to understand a Company like Enron with off balance sheet financing and pro forma accounting. Balzac, you’re such a partisan. Time to get your head out of left-right divisive politics and start looking at right from wrong.

    • Greenwich Resident

      Balzac, Smartest thing I’ve read on this topic so far!

      (Chris, can you delete the 1st comment above which looks like it replies to AJ which is not the case. GR)

      • Midcountry 2 but curious

        Sorry, I just got a mortgage and can’t resist math problems. 5k monthly P&I on the new loan plus roughly 1k taxes/ins. times 1.5 (to account for the first residence mort.) gets to about 9k/month. Assuming that there are no other fixed obligations and a 40 pct DSCR, suggests that the banks would need to see about 22.5k in gross monthly income or about 270k per year (note that even IO loans are qualified on an amortizing basis so no help there).

  28. Hu Nhu?

    The question posed by Mr. Fountain is a reasonable one. Why would any
    Town official refuse to answer?

  29. Once

    Actually, after the sale of River Rd Peter would have had almost $250k in cash. Plus if he got an interest only at 3.5% he could have payments of only $3500 per month. That $250k would carry that for almost six years. It’s all very doable.

    • The purchase of his new house, with its $250,000 cash down payment and its $1 million mortgage came 4 months before the condo sale, while the condo was still actively for sale. In fact, it was that circumstance that aroused my curiosity, because (a) $250,000 is usually considered a large sum of cash to have on hand for someone earning $100 grand a year and (b) to get approved for that mortgage, the bank would have had to have seen income sufficient to pay two mortgages, totally $1.5 million, and not just the new, $1 million loan.

      None of which means he couldn’t have been helped out on all this by his wife’s parents and if so, it’s ain’t nobody’s business but his own, but, just as a for instance, Luxury Mortgage keeps some of its loans in house and as such, could ignore federal lending standards; and if it did that (we’re talking hypothetical here, not accusation), it would be interesting who at the lender did so, and why.

  30. Anonymous

    Average APRN salary in CT is $85-110,000. It’s an advanced nursing credential, which she has in addition to two other masters degrees. To leave Jill Tesei’s income out of your “analysis” is pretty pathetic and offensive. I don’t get why you feel so compelled to be spiteful and petty and post such inflamatory, bullying posts without doing your due diligence.

  31. anonymouse

    This is nobody’s business but Peter and his wife.

  32. Mama R

    HIs wife works too…..Would that small detail be a game changer for this tirade on a really good person who has given a lot of solid leadership to this town.