Mortgage holder JPMorgan Chase has bailed out Long Island Rep. Steve Israel from the underwater mortgage on his Dix Hills home by approving a special deal allowing the lawmaker out of nearly $100,000 owed on the property, according to a New York Post report.
Israel, chairman of Democratic Congressional Campaign Committee, is running for reelection for a seventh term in New York's Third Congressional District, which includes Great Neck.
Israel and his wife, judge Marlene Budd, filed for divorce in 2011. The couple owes $553,000 on the mortgage for the home which was purchased in 2004 for $580,000, according to the Post.
JPMorgan approved a “short sale” of the home for $460,000, according to the report. The deal relieves $93,000 in debt Israel owes the bank.
In the Post report, Rep. Israel's camp said a marital breakup and a depressed housing market were to blame for the bailout.
“They did what everyone else would do: found a potential buyer and had a lawyer negotiate the sale with all parties for a price consistent with comparable homes in the neighborhood,” said Israel spokeswoman Samantha Slater to the Post.
An outspoken advocate for the bank bailouts, Israel is living by a double standard, according to his congessional opponent, Stephen Labate, R-Deer Park.
In a press release Monday, Labate said every Long Island homeowner should be outraged by the unethical behavior of the congressman.
"This is a classic example of politicians getting special treatment and playing by a seperate set of rules," said Labate. "Voters are tired of elitist politicians who use their power of office to garner special deals from the institutions they are charged with regulating."
Republicans have requested a House ethics committee probe bank break for Israel and Long Island realtors are calling the move "irregular," according to the report.
“I don’t understand how he [Israel] is eligible for this program when numerous other homeowners are struggling and are not being given this same opportunity,” said Grace Slezak, owner of Destiny International Realty to the Post.
Israel voted for the law, the Troubled Asset Relied Program, that provided billions of dollars to banks during the Wall Street meltdown in 2008. JPMorgan received $25 billion, which it repaid, with interest, to the government, according to the Post.