New York Community Bank has sold the mortgage on eight dilapidated buildings in the Bronx, bank officials said Thursday, disposing of its interests in properties that have attracted tenant protests.
The purchaser bought the mortgage, which had a $16 million balance, at a discount. The bank declined to identify the buyer or to say how much the buyer paid.
Also on Thursday, tenants in the buildings filed a motion in foreclosure proceedings for the properties seeking to hold New York Community Bank responsible for repairs. The tenants said they were requesting funds to fix leaky roofs, remove mold and update electrical equipment in the buildings.
Jonathan Levy, an attorney with Legal Services NYC-Bronx, which is representing the tenants, said he was “stunned” by the news of the sale.
“We’ll see who they are, what they are about and whether we can work with them,” Mr. Levy said. “We hope that it actually is someone that is responsible and the price is sustainable. If not, we will pursue other remedies.”
From 2004 to 2008, New York Community Bank loaned $19 million on the eight distressed properties to New York Affordable Housing Associates, a local housing company. But the rents at the apartments couldn’t support the loans, and the mortgage went into default.
Officials with New York Affordable Housing Associates didn’t return calls seeking comment.
“No one can really be surprised about what happened,” Mr. Levy said.
It’s a problem that has played out throughout the city. About 100,000 rent-stabilized apartments are in foreclosure or at risk of foreclosure because they have too much debt, he said.
Ulisa Rios, a tenant in one of the buildings, said the ceiling of her bathroom collapsed due to an unrepaired leak. Now one of her floors is beginning to sink in.
“God forbid the floor caves in. Anybody can get hurt,” said Ms. Rios, 24 years old, who lives in the apartment with her son, who is 7.
It will cost about $23 million to repair all eight buildings, at about $75,000 per unit, according to Ismene Speliotis, executive director of Mutual Housing Association of New York Management Inc., a nonprofit housing organization.
MHANY Management made a bid in December to buy the eight Bronx properties for about $8 million, but was rejected by New York Community Bank.
New York Community Bank officials declined to comment on the motion filed on Thursday by the building residents.
March 11, 2011