Fannie Left Holding The Bag On Dilapidated Bronx Apartment Buildings - Now Asked To Fork Over $320K+ To Repair Structurally Unsafe Conditions

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

• A Bronx judge has ordered Fannie Mae to answer charges that it is neglecting three dilapidated rental buildings for which it holds the mortgages as they wind through the foreclosure process. The order, [...] comes in response to a charge by the court-appointed receiver that the mortgage giant reneged on a promise to pay for $20,000 in repairs needed to correct city housing violations in the buildings.(1)

• “As a result of this, I have no confidence that [Fannie Mae] will pay for the major capital improvements which are required to protect the lives and safety of the tenants and to preserve the value of the asset without a specific order from this court,” wrote the receiver, attorney Marc Landis, in a court filing.

• Mr. Landis wants the court to order Fannie Mae to fork over the $324,475 that he estimates is needed to conduct basic repairs at the three five-story residential buildings. He says he has only about $4,000 in an operating account and nearly $20,000 in outstanding bills on the properties, which have hundreds of outstanding citations from the city. Two of them are on the city's list of worst-kept properties. “We have buildings that have structurally unsafe conditions,” he said. “I'm not going to turn these properties into luxury residences, but I do need to make sure they're safe.”

For more, see Court pulls Fannie Mae deeper into housing fracas (Mortgage guarantor, stuck with 14 foreclosed properties, must answer charges that it is allowing apartment buildings to fall apart).

(1) The judge's order is the latest twist in an ongoing drama that involves the three buildings being managed under receivership by Mr. Landis and at least 11 other properties also in foreclosure, all of which were purchased at the height of the boom by real estate investment firm Ocelot Capital for $36 million, the story states. Fannie Mae reportedly purchased the $29 million mortgage from Deutsche Bank and then discovered the loan didn't meet its underwriting standards. The buildings were subsequently abandoned by Ocelot, and the loans—still held by Fannie Mae—went into foreclosure in March.