Representative Jose Serrano and Senator Charles Schumer have called on government-sponsored enterprise, Federal National Mortgage Association or Fannie Mae to shoulder the cost of maintaining Bronx foreclosed homes for sale.
Both lawmakers claim that Fannie Mae has abandoned its responsibility of maintaining 14 dilapidated, foreclosed apartment units in Bronx. Fannie Mae backed out of its initial plan to sell the mortgages of the apartment buildings through an online auction.
Instead, the federal agency wants to dispose of the foreclosure properties by way of a competitive auction. However, both Serrano and Schumer said that staging the bidding process could take a year or more and would transfer the responsibility to maintain the Bronx foreclosed homes for sale to the city government and affordable housing organizations.
Both politicians agree neither affordable housing organizations nor the city of Bronx should be held responsible for the deterioration of the apartment buildings. The lawmakers wrote a letter to Fannie Mae executive vice president Kenneth Bacon to urge him to cancel the competitive bidding and instead opt for a speedy foreclosure proceeding.
They then suggested the transfer of the foreclosed apartment units to developers with experience on affordable housing. Additionally, they suggested that Fannie Mae create a fund for the improvement and maintenance of building conditions until such time that a foreclosure sale has been completed.
Industry experts said that selling the debt is tantamount to selling the problem, adding that the process would just create a period of uncertainty with no or little resources coming into the buildings.
Meanwhile, affordable housing developer, Fordham Bedford Housing Corp. has withdrawn its interest on the Bronx foreclosed apartments saying that the project is no longer suited for the company.
The problem facing the Bronx properties started when Ocelot Capital, a real estate investment company, purchased the portfolio for about $36 million during the peak of the real estate market in 2007.
Fannie Mae acquired the loan from Deutsche Bank for $29 million only to discover later that it failed to meet the agency’s underwriting standards. Ocelot abandoned the apartments and the loans went into foreclosures last March.
Affordable housing officials and advocates are hoping that a resolution on the issue could be used as an example for similar properties. Over 3,000 apartments are already Bronx foreclosed homes for sale with an estimated 70,000 more facing the threat of foreclosure.
back to top
Comments on this entry are closed.