CROWN HEIGHTS TENANTS RALLY AGAINST ATTEMPT TO FLIP ILEGALLY PURCHASED BROOKLYN HOMES

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FOR IMMEDIATE RELEASE Jan. 15, 2014

Contact:

Ismene Speliotis, 718-246-8080 ex 203
Kerri White, 212-479-3371

CROWN HEIGHTS TENANTS RALLY AGAINST ATTEMPT TO FLIP ILLEGALLY PURCHASED BROOKLYN HOMES

BROOKLYN (Jan. 15, 2014) – Residents of two decrepit rent-regulated buildings in Crown Heights and their supporters rallied today to demand that the new owners – who illegally bought the foreclosed-upon homes — stop trying to make a quick buck on the backs of the tenants.

“For the past three years, tenants in all four of these buildings have fought for their homes while suffering unconscionable living conditions,” said Kerri White, Director of Organizing and Policy at the Urban Homesteading Assistance Board, which is helping the tenants, along with New York Communities for Change.

“There is a preservation deal ready to move forward, it has been funded by the city and is supported by the tenant associations. (Broker Sanford) Solny and his investor friends must drop their opposition to the foreclosure immediately. This is a fight they cannot win: their protracted and frankly ridiculous interventions only force tenants to suffer for longer.”

The deteriorating buildings, which have been in foreclosure since 2009, have racked up 319 code violations on just 12 units.   There are holes in walls, water damage and other violations.

The way we are living here, they are treating us like animals,” said Pinkrose James, Tenant Association representative. “If Bernard Neiderman’s friends think they can get our buildings back from the tenants, they are wrong. We are here to demand that the foreclosure move forward so the Mutual Housing Association of New York (MHANY) can begin work on our homes, and to tell let anyone interested in buying these buildings to back off.” 

In March 2012, the Mutual Housing Association of New York (MHANY) purchased the mortgages on the buildings with the intentions of becoming owners once the properties wound their way through the foreclosure process. MHANY bought the mortgages with the support of the tenant associations, housing advocates, and city officials. The 25 year-old non-profit organization has plans that include a complete renovation in the buildings, funded by the Department of Housing Preservation in Development.

However, in the fall of 2012, slumlord Bernard Neiderman illegally sold the deeds to 230 and 232 Schenectady Avenue to a group of investors based in Borough Park. It is illegal to sell buildings that are in foreclosure. These investors, working through broker Sanford Solny, hope they can flip the buildings, buying out MHANY’s interest and making money off the top. This speculative behavior has slowed an already glacial foreclosure process, forcing tenants to wait longer for the repairs they desperately need. The buildings are both in the City’s Alternative Enforcement Program. The tenants rallied outside Solny’s office in Borough Park to demand that these investors drop their baseless and speculative opposition for the foreclosure, and allow the preservation deal to move forward.

“Unfortunately, many neighborhoods that low- and moderate-income New Yorkers have called home for generations have increasingly been affected by the speculative real estate market.  As buildings are sold at speculative prices amongst uncaring and unscrupulous investors — prices that cannot be maintained with the legal residents and legal rents — the greatest victims are the tenants themselves,” said Ismene Speliotis, Executive Director of the Mutual Housing Association of New York.

“MHANY ‘s plan to purchase the note, oversee the completion of the foreclosure, rehabilitate the buildings, and provide decent and affordable housing to the residents is still intact.  We are working with all parties to complete the foreclosure and take care of the residents and the buildings, preserving another affordable housing asset for the Bedford Stuyvesant and Crown Heights community.”

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The Wall Street Journal: “Bank Makes a Profile-Altering Deal”

The Wall Street Journal published an article on Sunday highlighting a new relationship between New York Community Bank and housing advocates (including us, the Urban Homesteading Assistance Board.)  To long-time readers of our blog, this is old news. In the years leading up to 2008, NYCB was the largest lender on rent regulated multi-family buildings in New York City and were known for lending to high-profile predatory equity players, like Pinnacle Group, and well-known slumlords, like Frank Palazzolo.  After years of organizing on our part along with along with a coalition of housing advocates, New York Community Bank came to the negotiation table in December. In March, the Mutual Housing Association of New York purchased four distressed notes in Brooklyn.

What’s changed? While the bank has long denied wrongdoing, it was displeased with the attacks and agreed to a pact under which it plans to give landlords and nonprofits a first shot at every distressed mortgage it sells in New York City.

Under the voluntary agreement reached earlier this year with two leading housing advocacy groups, New York Community Bank intends to offer to sell assets first to nonprofit developers and landlords approved by the city’s Department of Housing Preservation and Development as having good track records.

Under the “First Look” program, approved developers will get get an exclusivity period of 2 weeks in which to make an offer on distressed NYCB assets before the bank begins to actively market them. We are hopeful that this agreement willprove useful in recapturing large scale amounts of NYC affordable housing stock — perhaps through an Interim Facility. As we move forward, to different campaigns with different banks, we hope to reproduce this model and create healthier relationships between the non-profit and NYC banking communities to benefit rent regulated tenants.

“Sen. Schumer, Christine Quinn Push Feds To Pressure Bank That Owns Shoddy Housing”: The Village Voice

As published in the The Village Voice by Elizabeth Dwoskin

Image courtesy of The Village Voice

A consequence of our sucky economy: The city estimates that around 125,000 housing units will go into foreclosure over the next two years.

In many cases, owners (including banks) are trying to unload these buildings, and while they wait, living conditions deteriorate drastically for tenants, with landlords racking up housing code violations for lack of heat and hot water, for toxic mold outbreaks, leaky roofs, and rodent infestations.

Conditions have gotten so bad, in some cases, that city officials have taken a lot of flak from advocates (and from journalists), and these buildings have become PR problems for the city. And so, over the past year, officials have been playing a bigger role, by being a middleman between tenants, banks, older landlords and prospective ones.

Today, city and state officials, and Senator Chuck Schumer, took things a step further by asking the federal government to force a big bank that owns many foreclosed and distressed properties to come clean about their finances and sell the properties to a responsible buyer.

New York Community Bank is one of the most active providers of loans to landlords that buy multi-family dwellings in the city. According to the Urban Homesteading Assistance Board, the bank controls the mortgages on 34 foreclosed buildings, which are home to 800 families. 328 buildings that are owned by the bank and home to 6,000 families are in very shaky condition: they have more than three hazardous health and safety violations per apartment. Until recently, the bank owned five properties that were on the city’s worst buildings list.

Last month, Mutual Housing Association of New York, a real estate company that has the support of the city’s housing agency and tenant advocates made a bid to buy the 34 foreclosed properties. According to City Council Speaker Christine Quinn, New York Community Bank turned the company down, saying the offer was too low.

Schumer, along with Quinn and Congresswoman Nydia Velazquez, say that the FDIC — the federal agency that supervises financial institutions — should force New York Community Bank to come clean to buyers about the actual state of the finances, living conditions, and repairs needs of the buildings. Though no one has said it outright, the implication here is that the bank is fudging the numbers to make the distressed buildings more attractive to a higher bidder. The other implication is that the city has not had the pull with the bank that it would have wished.

The New York pols say that what they are asking for is well within the power of the federal agency. Because many of these mortgages were securitized by Wall Street, and are therefore implicated in the wider economic crisis, Schumer and Velazquez had inserted a section into the Dodd-Frank financial reform bill — passed by Congress last summer — that makes the federal government take some responsibility for the problem of distressed mortgages on multi-family dwellings, which afflict big cites like New York.

Schumer said today in a press release: “Here is a perfect example for the FDIC to take into consideration as they help build a framework for this program. The message here should be clear: residents of affordable buildings throughout the City should not be the victims of never-ending cycles of overleveraged gambling by predatory equity investors.”