When times were better, a young family put a down payment on a home in the troubled Waterbury Estates development. Now they face a financial dilemma: lose their down payment or purchase a house that is worth far less than what they are contracted to pay.
In May 2006, Rene Cruz and his wife Janet Escalante signed a contract with Ciampa Estates, the builder of Waterbury Estates on the former Smithsonian property, to purchase a two-family home scheduled for construction in the summer of 2008 at 1521 Waterstone Drive.
The purchase price was an astronomical $825,000, and the couple, who have a young daughter and who live in a building across the street from the development, placed a 5% deposit on the home totaling $42,000. Now, with the homes worth approximately $200,000 less than the original price, the couple faces a no win situation.
“Our lawyer has contacted the lawyer from Ciampa Estates, but the most they said they would reimburse us if we back out of the deal is $2,000,” Cruz said. “If we go through with the sale, we are likely going to end up with a mortgage that will lead us down the path that countless other Americans in our position are projected to face over the next year – foreclosure.”
Cruz said that he and his wife have been living in Pelham Bay for more than 10 years, and currently own a co-op. He wanted to purchase a home in the area to be close to Our Lady of Assumption School, where his daughter is enrolled.
“We love this neighborhood and we wanted to keep our home between 15 and 20 years, until our daughter was finished with college,” Cruz said. “We figured by that time we could sell the home, and that the value would have increased. I am faced with the option of either losing the down payment or losing a large amount of money on my first day in the house.”
Local leaders who watched the construction of Waterbury Estates very closely for the past few years, warned that prices were too high at the development and a purchase would be somewhat risky.
“The prices were very inflated and the builder was warned about it, but didn’t listen,” said Mary Jane Musano, of the Waterbury LaSalle Community Association. “Now with home prices tumbling, we are worried about the methods that will be used to liquidate the last 20 unsold homes at Waterbury Estates.”
Cruz explained that the house the couple was planning to buy borders a home that was recently the subject of a drug bust.
The backyard of the home the couple planned to purchase borderes 1524 Jarvis Avenue, where an individual was arrested in July for allegedly running a cocaine delivery service.
“Could you image leaving our daughter to play in a yard with that going on just beyond our backyard,” Cruz said.