Congressional challenger Stephen Labate’s (R-Deer Park) campaign jumped this week on a New York Post article that revealed details of 3rd District Rep. Steve Israel’s (D-Dix Hills) mortgage dealings related to the sale of his residence, issuing a fundraising appeal and a press release that accused the five-term representative of getting special treatment from his lender, JPMorgan Chase.
The Post reported that Israel sold his Dix Hills home for $460,000 while owing $553,000 on the property’s mortgage, with JPMorgan Chase absorbing the $93,000 in unpaid debt – a deal known in real estate circles as a ‘short sale.’
The Post’s report quoted Glen Cove realtor Grace Slezak, who said that Israel’s sale appeared “highly irregular.”
But the article did not disclose that Slezak is a member of the Labate campaign. Slezak authored a press release, published Sept. 13 in the Glen Cove Pilot-Record, describing herself as the “Glen Cove campaign coordinator to elect Stephen Labate.”
“This is a classic example of politicians getting special treatment and playing by a different set of rules than the average citizen,” said Labate. “Congressman Israel was an outspoken advocate for bailing out the bank that is now willing to let him off the hook for his mortgage obligation. Every struggling homeowner on Long Island should be outraged by the clearly unethical behavior of the congressman.”
Israel voted in favor of the bill that created Troubled Asset Relief Program in 2008, which issued bailouts to many major banks including JPMorgan Chase, which received $25 billion.JPMorgan Chase repaid the sum in June 2009, in addition to nearly $800 million in dividends.
The Israel campaign said Israel’s mortgage was completely above board and accused Republicans of misleading partisan mudslinging.
““This is just a cheap political attack by Republicans. Steve did everything by the books. The initial report failed to note that the person quoted as a real estate expert has a title in his opponent’s campaign. Steve and his wife are going through a divorce and were forced to sell their home in a down housing market,” wrote Israel’s communications director Samantha Slater in a statement. “[Real estate database] the Multiple Listing Service says 14.5 percent of home listings on Long Island being sold in short sales and Steve and his wife conducted their sale the same way as all of those people. They hired a lawyer to negotiate the sale with all parties for a price consistent with comparable homes in the neighborhood. Additionally, Steve asked for ethics committee guidance and acted in accordance with their advice.”
The Labate campaign drew parallels to the Countrywide Financial sweetheart loan scandal, when it was reported that several national lawmakers received below-market VIP loans from the troubled lending firm. The campaign also sent out an email to supporters citing the article and asking for support and donations.
New York GOP chairman Ed Cox also entered the fray, calling on the House of Representatives’ ethics committee to launch an investigation.
