NYC Tenants Look To Fannie To Maintain Complexes On Which They Hold Mortgages As Overfinanced Buildings Throughout City Begin Falling Apart

In New York City, Crain's New York Business reports:

• In 2005, Cammeby’s International bought a portfolio of five rent-regulated housing complexes in the city for $295 million. Just two years later, it flipped the grouping of former Mitchell-Lama buildings to Urban American Management for $918 million. Deutsche Bank underwrote the $700 million loan that funded the purchase, which resulted in a tripling of the properties’ debt service.

• Since the sale, tenants in the buildings, located in Manhattan and on Roosevelt Island, have reported a steady decline in services and maintenance. They protested against Urban American, but say they got few results. Now, they’re trying a different approach. They’re arguing that Fannie Mae, the government-sponsored enterprise that bought the debt from Deutsche Bank, has a duty to make sure buildings it owns loans on don’t fall into states of disrepair.

• And they’ll rally in Harlem Thursday afternoon to call on the mortgage giant to put a stop to leaks, lack of hot water and other maintenance problems they say have plagued the buildings. Leaders representing 7,000 tenants in buildings across the city where Fannie Mae owns the debt will participate in the rally.

• “With the rents they’re taking in, there’s no way Urban American can pay that almost $1 billion mortgage and continue to maintain the buildings,” said Jackie Peters, secretary of the Metro North Riverview Tenant Coalition, one of the buildings in the portfolio. Ms. Peters added that up until a few days ago, soot from a February fire in one of Urban American’s buildings had not been cleaned. “We believe that these poor conditions indicate that the owner does not have the available capital to operate the housing in a safe and livable manner,” wrote a collection of 10 city, state and federal elected officials in a February letter to Fannie Mae.

For more, see Tenants target Fannie Mae for upkeep dollars (Advocates say the mortgage guarantor should help pay for repairs on rent-regulated properties). RentSigmaSkimming