Decision is First Step in Finding New,
Responsible Ownership for Properties Owned by Ocelot Capital Group
Legislative, Financial and Enforcement Package being Developed to Prevent
Failed Real Estate Investments in Multifamily Housing from Residents
Deputy Mayor for Economic Development Robert C. Lieber and City Council
Speaker Christine C. Quinn today praised Fannie Mae's decision to cancel the
online auction of the Ocelot Capital Group's properties in the South Bronx.
The Department of Housing Preservation
and Development had urged Fannie Mae to cancel the online
auction to prevent another speculative purchase of the properties. Ocelot
purchased 521 units in 19 buildings between 2006 and 2007 and subsequently
defaulted on its mortgage, prompting foreclosure proceedings. The buildings have
fallen into disrepair, exposing residents to poor living conditions during
Ocelot's ownership. Fannie Mae and the Department of Housing Preservation and
Development will now collaborate on identifying a new, responsible owner that
will maintain and rehabilitate the buildings as quickly as possible. The City
will also pursue legislative, financial, and enforcement initiatives to address
similar cases, where neighborhoods are facing possible destabilization and
reduced quality of life due to troubled investments in multifamily housing.
"We have been urging Fannie Mae to do the right thing for hundreds families
in the South Bronx, and it did - canceling the online auction of the loans on
their homes," said Deputy Mayor Lieber. "We will continue to work with Fannie
Mae to ensure that the loans are transferred to an entity that will take
ownership, renovate the buildings as quickly as possible and operate them
responsibly. Further, we are going to develop a comprehensive strategy to help
prevent families from being hurt by failed investments in housing. I would like
to thank Fannie Mae, Senator Schumer and the many other stakeholders who have
contributed to crafting a solution that's going to allow for new ownership that
can maintain the properties and treat tenants fairly."
"The Ocelot Portfolio is a prime example of the damage that the predatory
equity crisis is doing to affordable housing across our city," said Speaker
Quinn. "But thanks to Fannie Mae's decision to cancel the auction, these
buildings will now find a responsible owner and get the repairs they so
desperately need. It's a good day for many tenants around the Bronx."
"By putting Ocelot Properties back on track toward obtaining responsible
ownership, Fannie Mae has seized this moment," said Department of Housing
Preservation and Development Commissioner Rafael Cestero. "It's a formative
decision, spurred by the tireless endeavors of advocates and elected officials
such as Senator Schumer. To this end, the City continues to stand ready as a
partner to Fannie Mae, Senator Schumer and its many preservation partners to
ensure that the mortgages are restructured in the best interests of the tenants,
the neighborhoods and tax payers."
"In collaboration with the City and in response to concerns expressed by
stakeholders involved, the DebtX auction scheduled for August 12th has been
canceled and an alternative qualification process to identify a new owner of the
Ocelot mortgages will be established," said Ken Bacon, Executive Vice President
of Housing and Community Development at Fannie Mae. "Fannie Mae has been working
over the past few months with the Department of Housing Preservation and
Development, court-appointed receivers, tenants, and other parties to achieve a
resolution that will lead to new, responsible ownership of the Ocelot
properties. Fannie Mae is committed to selling the Ocelot notes to a responsible
buyer who will deal fairly and appropriately with tenants."
While ownership of the buildings is in transition, Deutsche Bank, as the
originator of these mortgages, and Fannie Mae, as the subsequent purchaser of
these mortgages, will continue to work with the court-appointed receivers to
address life-safety issues at the Ocelot buildings.
"The Ocelot tenants and their advocates are tremendously grateful to the
Department of Housing Preservation and Development for working so diligently to
find a long-term preservation outcome for these buildings," said Dina Levy,
Director of Organizing and Policy for the Urban Homesteading Assistance Board.
"Likewise, we extend our deepest thanks to Fannie Mae who, by taking these
steps, has demonstrated their commitment to maintaining and financing the
rehabilitation of affordable housing."
"This is the first step toward restoring basic service to residents who have
lived too long in deplorable conditions," said Council Member Maria del Carmen
Arroyo. "I want to thank Fannie Mae for doing the right thing, and cancelling
"I am thrilled with Fannie Mae's commitment to ensuring that these properties
will soon have owners that truly interested in providing the best possible
housing for their tenants," said Council Member Annabel Palma. "This
decision will not only promote good standards of management, but provide tenants
with confidence in the quality and management of their housing."