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NY Foreclosed Homes for Sale Bought by Mortgage Holder

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By : John Cutts    99 or more times read
Two neighboring high-end foreclosed homes for sale in the Town of Hamburg, New York was bought back by mortgage holder and seller John Russo and the firm Greenacres Inc. which was represented by lawyer Bruce Zeftel from a foreclosure sale held by a court in Erie County.

The two luxurious homes were purchased by Michael Wilson, a 22-year-old hedge fund trader based in Cleveland, in 2008 for $6.3 million. At the time, the purchase became the talk of the town as it pushed up the benchmark for residential real estate transactions in Erie County.

But Wilson was able to pay only slightly over $1 million for each mortgage loan. After Wilson failed to make the required payments this spring, Russo and Greenacres filed for foreclosure.

Greenacres is a company affiliated with the Russo family, who founded South Buffalo-based cheese producer Sorrento Cheese Co. The company was later sold to S.A. Perrier over 10 years ago. Today, Sorrento Cheese is still one of Buffalo’s top manufacturing companies.

Zeftel and Russo were the only bidders during the court-conducted foreclosure auction. Zeftel made a $1.9-million bid for the residential building at 6523 Boston State Road and made a $1.85-million bid for the neighboring building at 6553 Boston State Road. The bidding was largely a credit bid or a paper transaction because Greenacres and Russo held the mortgages on the properties.

According to Anthony Colucci Jr., the Buffalo lawyer chosen by the court to hold the foreclosure auction for the 6523 Boston State Road property, said that the foreclosure decision was easy to make because the defendant, Michael Wilson, clearly defaulted on the loans. It was lawyer Kenneth Case who handled the foreclosure sale for the 6553 Boston State Road building.

Court documents filed by Russo and Greenacres also listed real estate company Phantom One Holdings One LLC as defendant together with Wilson. The company was formed by Wilson to purchase the two homes.

Recently, the high-end residences were raided by FBI investigators looking for documents in connection with their investigation of hedge fund trader Wilson. Until now, however, Wilson has not been charged for anything.

The residence at 6553 was built in 1992 and has over 15,500 square feet while the residence at 6523 was built in 1995 and has 15,000 square feet. Both have indoor pools, in-home theaters and other luxurious amenities.

According to lawyer Zeftel, Wilson has left the residences. He also added that the Russo family will put back the houses on the market soon.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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