Lone Star Funds Comes to Brooklyn, We Follow.

The tenants who live at 1507 St. Johns Place are mostly related by blood, and if they’re not related by blood, they call each other family anyway. Many of them have been living in the building for over thirty years; a grandmother rents an apartment above one of her sisters and across the hall from another. These three women have raised numerous children and grandchildren in the building (many of whom still live there). Now, they are all victims of a profiteering scheme by the same Texas-based private equity company that is foreclosing on the Vantage buildings in Northern Manhattan.

1507 St. Johns has been in foreclosure since 2010, but Lone Star Funds didn’t buy the mortgage until January, 2011. Almost immediately after buying the note, they sold it to Wells Fargo Bank — but retained servicing rights. Though we’re not privy to the specifics of this deal, we suspect that Lone Star Funds is making a profit twice: once off the sale to Wells Fargo, and once again by collecting fees for servicing the loan (which they do through a company called “Hudson Americas”).

The $2.3M mortgage, originated by Citibank, was betting on the gentrification of Crown Heights and, in turn, an increase in rents. While the bank and the landlord weren’t wrong about the fate of Crown Heights, they certainly weren’t counting on the tenacity of the tenants at 1507 St. Johns Place and their willingness to fight for their building.

While tenants’ long term goal is to fight for the preservation of their homes – via a discounted note sale to a responsible housing developer – there have been a number of small battles along the way. Currently, the extremely-litigious receiver has taken at least 10 of the 18 tenants to court over baseless non-payment claims. This is the last in a long line of harassment tactics the court-appointed agent has been experimenting with.

But tenants are up to the task. They hung “Don’t Buy Here” signs in their windows last week, and will be fighting – with the help of South Brooklyn Legal Services – in Housing Court AND Supreme Court in the coming month. With the help of their elected officials, they are planning on fighting Lone Star and Wells Fargo until the minute they win. They’re not backing down, and neither are we.

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One thought on “Lone Star Funds Comes to Brooklyn, We Follow.

  1. This article says “tenants’ long term goal is to fight for the preservation of their homes “. The meaning of tenant is someone who rents, so they don’t own anything here. So much for capitalism and property rights…

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