Tenants at 1153 St. Johns Pl in Crown Heights, Brooklyn are furious! Not only has their landlord walked away from the building, but also the lender, first Flushing Savings Bank and now Alex Varveris have abandoned them as well. Stuck in seemingly perpetual foreclosure, the tenants suffer from horrible conditions problems ranging from mold and leaks to holes in the floors and ceilings. The building has been been enrolled in HPD’s AEP Program since 2011.
In 2012, Alex Varveris, a known slumlord, purchased 1153 St. John Pl’s mortgage from Flushing Savings Bank, but has yet to substitute himself into the foreclosure case. Tenants want a voice in the outcome of the foreclosure are demanding to meet with him, but rather than taking responsibility for his property and his role in moving the foreclosure forward, Varveris is refusing to meet. In an effort to grab his attention (in addition to taking him to court in the next few weeks), tenants have hung a sign from their building which reads: “Alex Varveris: Tenants Demand More!” Stay tuned for more news on this campaign, and tenants’ struggles to make their voices heard!
Photo: William Alatriste, WNYC
Flor Matos, una de las residentes del inmueble 566, de la calle 190, que vive desde hace 29 años en el sitio, expresó sentirse muy preocupada ante la incertidumbre de no saber lo que va a pasar. “De llegarse a vender el edificio, por más de lo que vale, es casi seguro que nos van a subir la renta y continuaremos esperando para que nos reparen la calefacción.” (El Diario)
Flor Matos, one of the residents of the property at 566 W. 190th St, who has lived in the building for 29 years, said she was very concerned about the uncertainty of what will happen. “By selling the building for more than it’s worth, it is almost certain that they will continue to raise the rent and wait to repair the heat.” (Our own translation.)
City Council Speaker Christine C. Quinn
“It’s outrageous that Vantage and Lone Star would jeopardize the stable housing of hundreds of New Yorkers to turn a quick buck,” City Council Speaker Christine Quinn said in a statement. “If these buildings are sold with millions of dollars more in unsustainable debt, tenants will be the ones who pay the price when the new owners can’t make mortgage payments or repairs. I urge Lone Star and Vantage to put tenants first and to sell these properties to a responsible buyer who will ensure the upkeep of these buildings is maintained.” (Crain’s NY)
Commissioner of HPD Matt Wambua
“We want to make sure that to the extent that these buildings are sold that they’re sold to responsible owners and that they’re sold at prices that will be responsible prices,” HPD Commissioner Matthew Wambua said. (WNYC)
More Press is below. You can read HPD’s press release here, and please stay tuned as we continue to add press links throughout the day!
On September 27, 2012 tenants from Inwood and Washington Heights visited the New York offices of predatory equity company Lone Star Funds. Check out this great video of tenants fighting for their homes!
To join tenants in this important fight, click here and sign our petition to Lone Star Funds. Please share this video and this petition with your friends. It is vital that Lone Star Funds hear tenant concerns and stop speculating on affordable housing in Northern Manhattan.
New York Attorney General Eric Schneiderman filed a civil lawsuit against Bear Stearns yesterday. Many news sources are reporting on the lawsuit, but here’s an article from the New York Times, which includes a PDF of the actual complaint filed. Bear Stearns Co. is now a subsidiary of J.P. Morgan Chase – purchased by the larger bank with major government support in the early days of the financial crisis.
In the years leading up to 2008, Bear Stearns Co. purchased subprime and other high risk mortgages in large quantities from originating lenders, including EMC Mortgage and American Home Mortgage. Bear Stearns packaged these risky loans into securities, which they then sold to investors as ‘healthy’ investments. According to the Attorney General, the investment bank defrauded investors who purchased mortgage securities packaged by the company between 2005 and 2007. Schneiderman is suing the firm for two counts of fraud: securities fraud, and a cause of action under the New York State Martin Act. Broadly, the Marin Act allows the New York Attorney General power to hold companies accountable for financial crimes. However, it is associated with broad subpoena power, and includes a very loose definition of “fraud.” For this reason, Ashby Jones has contended in the Wall Street Journal that the Martin Act’s powers exceed those given any other regulator in any other state.
The actual complaint filed in New York County yesterday argues that Bear Stearns “systematically failed to fully evaluate the loans, largely ignored the defects that their limited review did uncover, and kept investors in the dark about both the inadequacy of their review procedures and the defects in the underlying loans.” If you have a second, the complaint is really worth reading. Especially out loud to your friends who may work at investment banks. As evidence of Bear Stearns’ willful misconduct, the complaint notes that internal communication between Bear Stearns’ employees refers to the SACO 2006-8 RMBS securitization (one of the many problematic securities that Schneiderman mentions) as a “SACK OF SHIT” and “shit breather.” This is revolting.
Irresponsible lending and faulty representation of mortgage values are central themes to the work that we do at UHAB to fight Predatory Equity. So we’re excited: Schneiderman’s case against the J.P. Morgan Chase is big step forward in the long battle to prosecute investment banks for their irresponsible practices which have crippled the U.S. and world economy. Though many private security investors have sought legal action against Bear Stearns for their losses, this is the first large scale civil suit on behalf of allinvestors (and “the people of New York State.”) And perhaps more importantly, the lawsuit goes after a bank for its widespread behavior rather than misconduct in a specific case. The complaint notes that collectively, investors have lost billions of dollars thanks to Bear Stearns’ negligence.
Of course, those billions of dollars lost represents billions of dollars in payments that the low and middle income homeowners were unable to make on their subprime mortgages – and many of whom have subsequently lost their homes. I haven’t checked out exactly who is invested in Bear Stearns securities but it probably wasn’t them. (Though their pension fund managers may have invested.) As exciting and ground-breaking as this suit may be (filing isn’t as big a deal as winning is), we’d like to see something as comprehensive and as meaningful for the millions of people who are facing foreclosure.