NY Senator To Fannie: Stop Online Horse Trading In Delinquent Bronx Building Mortgages As Deteriorating Conditions May Force 500+ Families Onto Street

In The Bronx, New York, Crain's New York Business reports:

• Sen. Charles Schumer will join Bronx tenants Monday to demand that Fannie Mae abandon its effort to sell distressed mortgages on a portfolio of 19 Bronx buildings via an online auction and instead work with the city to find a buyer who will fix up the rundown properties and keep them affordable. The government-sponsored entity bought the $29 million mortgage portfolio from Deutsche Bank Berkshire Mortgage in 2007 and has proposed auctioning it off through a website called DebtX—an eBay-like site that deals exclusively in the sale of distressed mortgages.

• Many of the buildings, located in the Crotona section of the Bronx, are in states of disrepair, including 10 which have made the city’s list of worst-maintained buildings. The buildings are home to 520 families. “Allowing these buildings to be horse-traded on the open market is a sure fire way to guarantee that another speculator gobbles them up, and either continues to let the buildings rot or kicks the current tenants out on to the street” said Mr. Schumer. “We simply cannot allow that to happen.”

For more, see Fannie Mae urged to abandon Bronx mortgage auction (Sen. Schumer, housing advocates demand that Fannie Mae halt an online auction of mortgages on 19 foreclosed Bronx buildings).

(1) According to the story, a portfolio of 19 apartment buildings in 2007 was purchased for $36 million, $29 million of which was debt issued by Deutsche Bank and immediately sold to Fannie Mae. Fannie discovered the loans didn't meet their underwriting standards after they were delivered by Deutsche Bank. The buildings were subsequently abandoned by the owners when they could no longer afford to pay the overvalued mortgage. The loans went into foreclosure in March.