FOR IMMEDIATE RELEASE
August 7, 2009
DEPUTY MAYOR LIEBER AND COUNCIL SPEAKER QUINN LAUD FANNIE MAE'S CANCELLATION OF PROPERTY AUCTION IN THE SOUTH BRONX AT THE CITY’S REQUEST
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 this auction."
"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."
Stu Loeser / Marc LaVorgna (Mayor's Office) (212) 788-2958
Jamie McShane / Maria Alvarado (Speaker) (212) 788-7116
Jon Searles (Fannie Mae) (202) 230-8863