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Two properties foreclosed by Lend America will be auctioned off this month as part of the defunct Melville lender's involuntary bankruptcy.

Lend America shut down in December 2009 after federal authorities filed a civil fraud suit and pulled its license to make loans insured by the Federal Housing Administration. Afterward, many Lend America refinance clients said they were saddled with two lenders' liens on their homes because Lend America did not pay off the original loans -- even though the refinancings had closed well before the company did.

Now, hunting down and selling Lend America real estate assets -- its portfolio of foreclosures -- may be the key to getting back a lot of money for creditors, including the refinance homeowners, said the bankruptcy trustee in the case, R. Kenneth Barnard of Wantagh.

So far, a three-family row house in Brooklyn and a two-family house in Far Rockaway have been the only two Lend America real estate holdings found after title searches in seven New York State counties, the trustee said.

For Barnard, these two properties are just the start, because Lend America operated in 46 states: "The real estate may ultimately be the key to recovery. I have to go county by county. There are no national records for that."

He said refinance clients can file claims in bankruptcy court.

The two foreclosures will be auctioned off Sept. 22 at the Holiday Inn in Plainview by David R. Maltz & Co., a Plainview auctioneer.

Richard Maltz, vice president for the real estate auction division, said an investor has offered $190,000 for the Brooklyn row house, which is boarded up. The first bid must be $205,000, due to rules. "It's got potential," he said of the property.

The Far Rockaway semi-detached house, built in 2006, has no offer so far, Maltz said. "It has some wear and tear, but, all in all, it's a turnkey investment for someone," he said.


Some Long Islanders who are delinquent on their mortgages could get a little relief in the aftermath of Tropical Storm Irene.

Borrowers whose houses were damaged so much that they must be replaced or reconstructed will get a 90-day moratorium on foreclosure if their loans are insured by the Federal Housing Administration. Also, the agency won't start foreclosure proceedings on borrowers who are 90 days late. The clock started Aug. 31, when President Barack Obama declared the state a disaster area.

Borrowers will have to provide proof of damage, which could be insurance or inspection reports.

The moratorium is among several federal initiatives that are triggered when the president declares an area a disaster zone.

It's not clear how many Long Islanders will be affected. But out of 34,666 FHA mortgages on Long Island, 1,267 are in the foreclosure process and 2,678 of them are 90 days past due but not yet in foreclosure, an FHA spokesman said.

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