People living in the country’s priciest and glitziest zip codes haven’t escaped the foreclosure crisis, according to recent data cited by Forbes, with northern North Jersey and southern New York having the largest total number of pricey neighborhoods riddled by foreclosures in the nation. Among these pricey neighborhoods are Great Neck and Old Wesbury.

Loss of income may be the most common reason for foreclosures in pricey neighborhoods but experts say they’re seeing a rise in the number of strategic foreclosures on that end of the market.

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Orly Hollander from Laffey Fine HomesThe Mission for the United Republic of Tanzania has recently bought a
Great Neck, LI center hall colonial house for $1.26 million, Newsday
reported. Orly Hollander of Laffey Fine Homes, who was the listing
agent on the property, had to get State Department approval to sell
the five-bedroom house. Hollander said that the home is for a
Tanzanian diplomat with his children. The master bedroom has a bath
with a Jacuzzi and shower, and a two-car garage is also attached to the house. Asking for government approval is standard practice in
such acquisitions, in accordance with the Foreign Missions Act, Hollander
said, and in some cases the government has denied approval. The
Tanzanian mission will have to pay $22,093.66 a year in property
taxes. [Newsday] [more]

While the residential market has been sagging in and around the greater New York City, there are six Long Island neighborhoods where home prices have stayed rock solid through the financial downturn, according the Newsday. The North Shore’s Port Jefferson, Holbrook in central Suffolk County, East Islip in the southern shore of Suffolk County and New Hyde Park, Great Neck and East Rockaway in Nassau County, all rank as neighborhoods where home prices have remained strong, according to local real estate experts. While some of the neighborhoods on the list, like Port Jefferson, stayed hot because of amenities like a nearby country club, experts say that communities like New Hyde Park are often able to stay afloat because of their sheer proximity to New York City.

Steven Schnall, founder of QuonticBank

Steven Schnall thinks that 1,000 community banks will close in the next year.

Even so, he’s confident the one he’s starting won’t.

Schnall, a mortgage finance expert who founded New York Mortgage Trust, has redesigned the erstwhile Golden First Bank in Great Neck under the name QuonticBank, with initial capitalization of $12 million to $13 million — half of which came out of his own pocket.

Despite his bleak community bank market outlook, Schnall said that smart lending will help his enterprise eschew failure. He said his background in mortgage financing was a key motivator in his decision to launch Quontic (“ontic” coming from the Greek word “ovtoc,” meaning factual existence, and “qu” being the prefix for the word “quality,” according to a Schnall spokesperson).

“The reason these banks are failing — in almost all cases — [is] bad loans,” Schnall said. “Our philosophy is, ‘we’re here to lend, but you have to be credit-worthy and you have to have skin in the game.’” [more]