Good Morning
Good Morning

Editorial: Rep. Steve Israel's convenient home sale

The house in Dix Hills that Congressman Steve

The house in Dix Hills that Congressman Steve Israel sold. (Oct. 8, 2012) Credit: Heather Walsh

Rep. Steve Israel has terrible timing.

It's hard to imagine a worse moment than the heat of an election campaign to close a short sale on his Dix Hills home that allowed him to repay $93,000 less than he owed on the mortgage. The deal has opened him up to Republican opponent Stephen Labate's accusation that he got special treatment due to his political position.

But based on what's known now, Israel (D-Huntington) did nothing wrong. That assessment could change if evidence surfaces that he used his position to get a sweetheart deal. But in the throes of a divorce and saddled with a house he could no longer afford, it appears he simply made the best of a bad situation.

Israel and his estranged wife, Suffolk Family Court Judge Marlene Budd, bought their three-bedroom colonial in 2004 for $580,000. The balance on the mortgage and a home-equity loan was $553,000 when they sold the house Oct. 5 for $460,000. As always in a short sale, the mortgage holder, JPMorgan Chase, forgave the $93,000 difference.

Before making the deal, Israel asked ethics officials in the House of Representatives whether under the circumstances a short sale was acceptable. They advised it was, he said, and he never contacted the bank. His lawyer handled the transaction.

Israel, like most homeowners with underwater mortgages, faced only bad options. He could have stopped paying the mortgage, waited for the bank to foreclose and handed over the keys. That would have trashed his credit rating, not to mention his resume as a member of the House leadership, and still left the bank on the hook for the $93,000.

He could have rejected a short sale and paid the $93,000. But while an elected official shouldn't get a better deal than average homeowners, he shouldn't have to accept a worse one either. Currently 13.5 percent of the homes on the market on Long Island are short sales.

Voters in the 3rd Congressional District will have the final word on what the transaction says about Israel as an elected official. It may have been politically tone deaf to accept a short sale. But that doesn't mean it was the wrong thing to do.