New Haven Independent

Jones did win the foreclosure auction free and clear on July 19 to buy the Tudor in the Beaver Hill neighborhood for the bargain price..

That sale, however, did not stand, according to Donna Wright (pictured with Jones), the “committee,” or attorney who handled the sale for the court. (Click here to read the original story about the sale.)

After someone wins an auction at a foreclosure sale, it still needs to be approved by a judge. If it appears that it sold for too little — and somebody steps forward to pay a past bill or make a higher offer — the judge can void the original.

This case didn’t even get to that point. Even before a judge approves a sale, a debtor has a chance to pay a back bill and keep the property — or, as has happened here, someone with a stake in the property can pay the bill on behalf of the debtor.

The city had foreclosed on the Colony Road house because the owners owed back taxes. The out-of-state company holding the mortgage on the property, Novastar, subsequently paid that past bill, which was $15,000. Novastar had a lot at stake: It had given the owners, Tom and Shirley Bordeau, a $464,000 mortgage so they could buy the house (from controversial property owner Daniel Stein, for $499,000.)

According to Wright, although he will have his deposit returned to him in its entirety, Jones is nevertheless very disappointed indeed.

Why the mortgage company didn’t do this before the foreclosure was a bit of a mystery. “That is unusual,” said local attorney Jonathan Einhorn.

“The moral of that story,” he added, “is if you snooze, you lose.”

Attorney Wright said she had heard Novastar was going to pay shortly after the foreclosure proceeding on July 19. When they finally did cough up the taxes to the city, the city filed with the court what is known as a satisfaction of judgment, on July 30.

Not everyone, of course, was satisfied.

Attorney Wright said she had filed for Jones’ money to be returned to him and on that score expected no problems. Alison Lee Adams, Jones’ lawyer, said she was not in contact at the moment with her client and therefore could not comment.

Where does that leave the fate of the property now?

It’s of far more interest than just to the parties directly involved. For before the Bordeaus became the owners — and the recent proceedings still leave them technically holding title, albeit with a huge mortgage attached to the property — the owner was Daniel Stein, a developer known for going his own way at the cost of often antagonizing neighbors.

After he sold the house to the Bordeaus in 2006, on the adjoining lot he cut down a locally beloved beech tree. (Click here and here for stories about that.)

This action not only angered the community. It seemed to have triggered events leading to the Bordeau’s abandoning 123 Tudor, although details remain unclear. According to neighbors quoted in previous stories, the Bordeaus thought they were getting a nice back as well as side yard, but that side yard quickly disappeared and perhaps with it a significant portion of the property value they thought they had purchased.

After several confrontational meetings with the Board of Zoning Appeals, Stein, in 2007, eventually built a pre-fabricated house, now 123’s neighbor. When that happened, the Bordeaus apparently gave up on 123.

Yet the prefab is still sitting vacant and, according to neighbors, unlived in and insufficiently finished to earn a certificate of occupancy from local government’s Livable City Initiative.

Its fate affects the future sale value of 123 Colony, as well as the neighborhood as a whole. Attempts to reach Daniel Stein or his attorney regarding this story have not been successful. Nor were attempts to reach the Bordeaus.

Several calls to Livable City Initiative’s Deputy Director Gary Hogan on the status of the property were not returned.

What will be the next legal move? According to Attorney Wright, the title still resides with Tom and Shirley Bordeau. Their address is currently listed on Wellington Road in the immediate Beaver Hills neighborhood. The Colony Road house has a mortgage lien of $464,000; the property most recently valued at $384,000. So the lien exceeds the current market value of the house.

That means it will be very difficult to sell the house; Whoever buys will have to take on the lien. The next move, Wright said likely belongs to the mortgage holders.

So a neighborhood will have to wait on the slow-moving decision-making process of yet another out-of-state lender.

“They can do one of do things,” Wright said. “They can petition for strict foreclosure.” That’s a non-public sale, between the owners and the mortgage company, when market value is less than the amount of the debt. This move brings title to the mortgage company, which then, as owner, must then decide what to do. But they also must pay taxes, fees, and so forth. They usually get a real estate agent, suggested Wright, and try to sell the house again — presumably for a lot more than $25,000

“The other option,” she said, “is to arrange a short sale.” That’s an arrangement between the owners and the mortgage company whereby the mortgage company agrees to release the $464,000 lien, so a buyer can more expeditiously be found.

With the lien in place, she suggested, it would hard to attract buyers. The owners, the Bordeaus, would have a number of days to sell the house at a price less than the debt owed. Those proceeds, by whatever arrangements they make, would largely go to the mortgage company.

“I think the bank, the mortgage company, that is,” Wright said, “stands to make more money through short sale than strict foreclosure. But you never know.” As of now, however, said the attorney, there is no legal action taken or pending.

All of which still leaves Wayne Jones waiting for another lucky day, and the community still wondering what will become of both 123 Tudor and the now beech-less neighboring property.