“Mortgage dumps put eight Bronx apartment buildings in foreclosure danger”: New York Daily News

As published in the NY Daily News by Daniel Beekman

Sheridan Ave. buildings have been cited for 458 violations, forcing tenant Nelson Rodriguez to cook with a hot plate for the last three years. (Photo courtesy of NY Daily News)

From Bronx slums to City Hall to Washington, it’s bank-bashing time.

Tenants and elected officials are begging the Federal Deposit Insurance Corp. to crack down on a local bank that recently dumped the mortgages on eight Bronx apartment buildings in foreclosure.

Unless the FDIC acts fast, hundreds more rundown buildings could could have their notes sold by New York Community Bank to landlords unwilling to make lasting repairs, advocates argue.

“It appears NYCB is reselling distressed mortgages for as much as they can get, and as fast as they can … without regard for the track record of the incoming buyer,” said Dina Levy, policy director at the Urban Homesteading Assistance Board.

“We cannot continue to let faceless banks make unfair deals,” added City Council Speaker Christine Quinn.

NYCB currently holds the notes on 34 buildings in foreclosure – 16 in the Bronx – and on 328 additional buildings with three or more dangerous housing code violations per apartment, Levy said.

Nelson Rodriguez, a tenant at 1221 Sheridan Ave., one of the eight buildings that saw its mortgage sold, says he has gone without gas for three years. His building has 458 violations.

“I have to cook on a hot plate,” said Rodriguez, 62.

But NYCB called the bad mortgages “not at all indicative” of the “tens of thousands of loans” it has made to landlords in poor neighborhoods over the years. “In the overwhelming number of cases, the property owners we have lent to have demonstrated a strong commitment to reinvest in their buildings,” the bank said.

Rather than sell the notes on the eight Bronx buildings to a nonprofit organization approved by the city, NYCB dumped them to Townhouse Management Co.

Advocates claim Townhouse overpaid and could be planning to flip the buildings after making cosmetic repairs.

Sen. Chuck Schumer (D-N.Y.) said he wants to protect Bronx tenants from the “never-ending cycle of overleveraged gambling by predatory equity investors.”

But Townhouse President Mitchell Maidman said his company will spend “whatever it takes” to fix up the slums.

Rep. Jose Serrano (D-South Bronx) wants the FDIC to force banks to mark down their mortgages on buildings in foreclosure based on repairs that need to be made.

A temporary landlord – appointed by a Housing Court judge when the buildings went into foreclosure – already has completed $1.7 million in repairs requested by NYCB, Maidman said.

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