This wooded town of roughly 60,000 on Long Island Sound — home to dozens of hedge funds, many millionaires and more than a few billionaires — is one of the wealthiest enclaves in the country. But even Greenwich, Connecticut is not immune to the wave of home foreclosures sweeping the nation.
On Stanwich Road, for example, a house worth $2.6 million is close to going on the block. On Hettiefred Road, the owner of a 2,720-square-foot, four-bedroom colonial featuring a luxury kitchen, swimming pool and tennis court, has been threatened with foreclosure for months. Several dozen other owners in Greenwich have received foreclosure notices this year.
But there is a difference from most other communities. Auctioning off such homes is a far greater challenge here than elsewhere, as affluent but cash-squeezed owners often find ways to delay losing their homes, sometimes by coming up with just enough to make last-minute payments avoiding a final sale — for a while, anyway.
Just ask John Thygerson, who parked his Jeep sport utility vehicle in front of the empty house on Hettiefred Road on the flawless spring day last Saturday.
As a foreclosure auctioneer, he was scheduled — for the third time since January — to sell the house. But the owner, a construction business owner who has fallen on hard times, made a last-minute mortgage payment and the foreclosure was postponed yet again.
So Mr. Thygerson was there to shoo prospective buyers off the property, nod at inquisitive neighbors and stake out a new spot for a fourth set of foreclosure signs after the first three had been mysteriously torn down.
“We never had a case that had gone through three separate sales attempts,” he said, still dazed that the auction failed to take place. “Greenwich being Greenwich, foreclosures are a rare occurrence.”
Rare, perhaps, but not unheard-of, as the housing industry collapse starts to claim victims among the affluent. Personal traumas like business reversal, illness and divorce play a role. There’s no real pattern, with people as diverse as builders, restaurateurs and poker players at risk of losing their homes.
The town, which typically has about half a dozen foreclosure notices each month, recorded 34 filings in January, according to RealtyTrac.
But even the most financially stressed of Greenwich homeowners have generally been able to ward off actually losing their homes.
RealtyTrac data shows that owners of seven homes received notices of default last month, and another home is about to be auctioned in this town where the average single family home that sold this year went for $3.1 million. The owners of all of them had received notices of pending litigation but were still hoping to rescue their positions. In the last 30 days, none of the three Greenwich properties listed for auction were actually sold.
As millions across the nation face the threat of losing their homes, the few Greenwich owners in trouble are tapping into other resources that most people cannot call upon to help prevent the ultimate indignity.
In Greenwich, foreclosure filings were made against 100 homes last year, according to RealtyTrac. That translates into less than half of 1 percent of Greenwich’s 24,511 households, compared with a rate higher than 1 percent nationwide.
Already one of the richest cities in the country in 2000, when the Census Bureau recorded a median household income of $99,086 — more than double the national average — the town has become far wealthier in recent years, with the exponential growth of many of the hedge funds that have set up business here. A new generation of wealthy Wall Street executives has moved in as well. By 2007, the Connecticut Economic Resources Center reported, the median household income had risen to $122,849, with many homeowners earning far more.
The tearing down of existing homes to make room for new ones has continued despite the mortgage crisis that began last summer. And while prices and sales volume are dropping, Greenwich is not suffering as badly as nearby towns.
Through April 23 this year, 160 co-ops, condos and single-family homes sold for $290,000 to $30 million. That compares with 240 sales, from $385,000 to $12 million, for the period in 2007, according to the Greenwich Multiple Listing Service.
But with the financial system straining under extreme pressure, some Greenwich residents may be facing tougher times in the near future. The New York Independent Budget Office predicts that Wall Street will lose more than 20,000 jobs by the end of 2009. Some start-up hedge funds are having trouble raising capital.
Still, lawyers working on Greenwich’s early foreclosure cases predict that most will never reach the auction stage because their homeowners almost always have other options.
Burt Hoffman, a lawyer in Stamford, Conn., is helping one such Greenwich homeowner sell his property as a “short sale,” in which the price is expected to fall short of the value of the mortgage securing the home. He is also trying to buy three troubled Greenwich homes before they are sold at auction and fielding calls from clients hoping to pick up a bargain.
Similarly, Eileen Pate, a Greenwich lawyer, recently helped one client avoid foreclosure by arranging a short sale with his bank, which agreed to accept payment over time for the difference between the outstanding mortgage and the price the house fetched.
As for the four-bedroom colonial that just avoided going on the block, Zbigniew Skwarek, the 41-year-old owner, came up with his own money to postpone the auction. Court records show he stopped paying on his mortgage on Feb. 1, 2007. But three days before the scheduled auction, he said, he gave his lender a check for $50,000.
Mr. Skwarek may not live in one of Greenwich’s most coveted neighborhoods. But like many residents here, he owns other properties, including an apartment in Greenwich and a home in Florida, and he can tap into that equity.
“I don’t want to lose this house,” Mr. Skwarek said in a telephone interview.
Mr. Skwarek rented out the house after he divorced his wife, Renata, in 2004, because, he said, it felt too big to live in alone. But last year, he said, his renters, John and Arline Josephberg, stopped paying their monthly rent of $10,000.
While living there, Mr. Josephberg — who previously ran the financial firm Josephberg Grosz & Company — was put on trial, accused of not paying his taxes for 29 years. He was sentenced to 50 months in prison. By the time the couple moved out in January, they owed Mr. Skwarek $90,000. Calls made to Mrs. Josephberg and to the couple’s daughter were not returned.
But public records show that Mr. Skwarek had trouble paying his bills even before he rented out his home. Court documents show that he also owes construction and supply companies more than $200,000 for unpaid bills on his home.
In the past four years, he has been in court several times over unpaid bills. He has a felony conviction for not paying wages to his workers and a misdemeanor for issuing a bad check. He was sued in small claims court for not paying his divorce lawyer. His former wife said that his money troubles contributed to the end of their marriage.
“I was sick about how he took care of the bills,” Ms. Skwarek said. “He didn’t change.”
A few of Mr. Skwarek’s neighbors can relate to his financial troubles. Two other homes on the same road have appeared in preforeclosure filings in the past year.
Vincent Scorese, who owns a house next door and also faces the risk of foreclosure, moved out and rented out his home after he went through a divorce. He said that as a builder he became overextended and found it difficult to make his mortgage payments on the five properties he owns in the area. So he has put them all up for sale.
“I feel bad for him,” Mr. Scorese said. “So many guys are in trouble, even guys you wouldn’t expect.”
Mr. Skwarek says he is eager to hold onto his home, especially because it represents the culmination of his longstanding immigrant dream. Mr. Skwarek said he grew up outside of Warsaw and studied construction in Germany, France and Britain.
He arrived in New York in 1993 and soon started his firm, Bishek Construction. In 1998, he bought his Greenwich house for $495,000. He added a second floor and a luxury kitchen to the 53-year old home.
Arline Schmaling, who lives across the street, said that she hoped that Mr. Skwarek figures out a way to return to his home. As she sat on her front porch, she talked about how Mr. Skwarek plowed her driveway and helped install handicap bars for her husband in the bathroom before he died from cancer.
Ms. Schmaling said she missed Mr. Skwarek’s two daughters and son. She liked to bake cupcakes with the girls, who are now teenagers, and play Boggle with them.
“They were like second grandkids,” she said. “It was so fun to have kids in the neighborhood.”
Mr. Skwarek has still not figured out how he will hold on to his home. He will try to rent it again, he said. If that doesn’t work, he plans to move in and rent out his apartment. He remains optimistic that foreclosure will never happen and that his lender will help him find a way to escape his financial trap.
“They want to work with people like me,” he said.
Mr. Thygerson, the auctioneer, agrees that he may never get a chance to do his job.
“You look at this place,” he said, “and foreclosure does not come to mind.”