When Steven and Richard McNamara placed the winning bid for a foreclosed home in Morris Cove, it was their second chance at a property that had slipped through their fingers only months before.
The father and son (pictured), owners of McNamara Builders in New Haven, bid $135,000 at a foreclosure auction Saturday for a one-story ranch house at 165 Cove St. formerly owned by Paul and Katherine Ruggiero.
The foreclosure suit was brought by Wells Fargo, which had a $125,000 mortgage stake in the property and placed the only other bid in the sale ($134,900) by fax the day before.
The sale price, the McNamaras said, was the same offer they made to the previous would-be seller of the property, Capital One, three months ago, before the company’s attorney did a last-minute title search and discovered a problem.
“He said, ‘Wait a minute, they’re number two,’” Steven McNamara said. “They didn’t even own the house to list it; it’s like me listing your house.”
Although Capitol One held a $60,000 mortgage on the property, it was the second mortgage. McNamara said neither the bank nor the realty company handling the sale, ERA, had turned up that fact.
Neighbor Pete Caminiti, who attended the sale, said his son-in-law, Joe Fasone, had been the real estate agent unlucky enough to get “blown out of the deal.”
“He was pissed,” Caminiti said.
Howard J. Wicker (pictured), the court-appointed attorney handling Saturday’s noon auction, told the 10 prospective bidders and onlookersin attendance that in his experience, any second mortgage holders named in foreclosure suits are erased. But he warned potential buyers to do their own due diligence.
“Anybody in second position or beyond who is notified, their debt is gone,” he said, “but if you want me to guarantee it, I won’t. I’ve never seen it, so I’m telling you that but I’m not.”
The house, opened by a locksmith prior to the sale, was vacant, with construction dust coating countertops in the kitchen, a disconnected dishwasher and toilet and un-hung doors propped against the walls. Though the electricity had been shut off, there was enough light to see water in the basement.
Attorney Fred Leaf, who came to assist Wicker with the sale, said it was one of the nicest foreclosures he had seen.
“The one I was at last week, people left all kinds of personal effects behind,” Leaf said. “I’ve never seen a house this clean.”
The water in the basement, however, along with concerns about flooding and potential difficulties in getting flood insurance coverage, was enough to deter some potential bidders.
Frank Wilson, who said he had previously rented in the neighborhood, showed up with the required $21,000 deposit check in hand, but decided not to register for bidding.
“I probably should have,” he said, “but the water made me a little hesitant.”
Were the McNamaras worried about flooding?
“Not a bit,” Steven McNamara said.
As contractors, Richard McNamara said, they are equipped to make any repairs necessary. Gesturing to the several McNamara Builders trucks parked outside, he said the foreclosure would be a “make-work job” for the company.
“If someone else bought this, we might even give them an estimate on doing all of this,” he said.
Tough Market For Flippers
The McNamaras initially saw fixing and flipping foreclosures as a way to offset lost income from the decline in new home building. (The only new home the company has sold recently was on the market for 18 months.) But Steven McNamara said getting a good deal has not been as easy as they had hoped.
“The banks look to recoup their investment, and we’ve been finding that to be very high,” he said, “so it’s not a great market for flippers like ourselves.”
Wicker told the McNamaras he would do his best to push the sale as quickly as possible after the mandatory 20-day waiting period following court approval of the sale, which he called likely.
“After that, I’ll be ready to have a deed in front of you,” he said.
It is possible for the original owners to redeem the house from foreclosure during the waiting period, Wicker said he had not been able to contact them prior to the sale, and they could not be reached for comment.
Previous Independent coverage of New Haven’s foreclosure crisis:
• Suburban Cop Finds A City Steal
• Absentee Banklords Thwart Foreclosure Sales
• Donovan: “Help Is On The Way”
• Judge Forces WPCA To Give Mom A Chance
• WPCA Uproots Tenants, Too
• Home-Rescue Squad Ignores WPCA
• Sewer Agency Unloads House
• Foreclosure Evictions Halted
• Let The Bank Have It, This Time
• Hazel St. Sale Reflects Economic Climate
• Hill Foreclosure Triggers Memories, & Prayers
• Foreclosure Fee-Slashing Judge Leaves Town
• She’ll Be Watching Deutsche Bank
• A Last Pre-Foreclosure Look At A Lifetime Past
• New Yorker Snags Foreclosed-Upon Gem
• Foreclosure Dream Goes Sour
• Judge Slashes Foreclosure Bounty
• Tax Break Saves Woman’s House
• Bank Replaces “Gunshot Alley” Landlord
• Foreclosure Bill OK’d
• Singh Seeks Home For A Song
• Foreclosure’s Neighbor Worries More About Speeding
• Networking Replaces Foreclosure at Christy’s
• Foreclosure Bargain — & Renewal — Jeopardized
• Bank Outbids Akbar; Family May Keep Home
• “So Don’t Worry About Pablo”
• Bankruptcy Postpones Foreclosure
• Next-Door Foreclosures, 53 Years Apart
• They Met On Foreclosure Way
• Little Garage Draws Big Bids
• A 2nd Chance on Lewis Street
• Foreclosure Attracts New Breed of “Specialist”
• In Foreclosures, Judge’s Hands Tied
• Home Saved From Foreclosure. Cycle, Too
• A House For Precious?
• Deutsche Bank Grabs Dixwell Condo
• Reluctant Bidder Snags F. Haven Bargain
• Well, There’s Always Powerball
• Neighbors Retrieve Home From Bank
• Somebody Has Plans For Bassett Street
• Foreclosed, the Khennavongs Leave the Santanas
• Foreclosure Steal May Be Too Good
• 2nd Foreclosure in 3 Months Dims Bright St.
• After Foreclosure, W’ville Owner Still Hopes To Sell
• He’s Not Buying, Yet
• Quiet Foreclosure on Porter Street
• 3 Minutes Too Late
• Historic Gambardella Property Foreclosed
•2 Homes Lost, 1 Gained
• “Everybody’s Got To Eat”
• More Foreclosures, More Signs
• Foreclosure Sale Benefits Archie Moore’s
• Rescue Squad Swings Into Action
• A Bidder Shows Up
• Bank Beats Tanya’s Bid
• Westville Auction Draws A Crowd
• DeStefano: Foreclosure Plan Ready
• Can They Help?
• “We Should Over-Regulate These Bastards”
• Rosa Hears of Rescues
• WPCA Grilled on Foreclosures
• WPCA’s Targets Struggle To Dig Out
• Sue The Subprimers?
• WPCA Hearing Delayed
• Megna’s “Blood Boils” at WPCA Tactics
• Goldfield Wants WPCA Answers
• 2 Days, 8 Foreclosure Suits
• WPCA Goes On Foreclosure Binge
• A Guru Weighs In
• WPCA Targets Church
• Subprime Mess Targeted
• Renters Caught In Foreclosure King’s Fall
• She’s One Of 1,150 In The Foreclosure Mill
• Foreclosures Threaten Perrotti’s Empire
•“I’m Not Going To Lay Down And Let Them Take My House”
• Struggling Couple Sues Over “Scam”
To learn about the ROOF Project, a community-wide effort to help New Haveners navigate the foreclosure crisis, click here.
The following links are to various materials and brochures designed to help homeowners avoid foreclosure.
How to prepare a complaint to the Department of Banking; Department of Banking Online Assistance Form; Connecticut Department of Banking, Avoiding Foreclosure; FDIC Consumer News; Statewide Legal Services of Connecticut, Inc; Connecticut Bar Association Lawyer Referral Service.
For lawyer referral services in New Haven, call 562-5750 or visit this website. For the Department of Social Services (DSS) Eviction Foreclosure Prevention Program (EFPP), call 211 to see which community-based organization in the state serves your town.
Click here for information on foreclosure prevention efforts from Empower New Haven.