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The Second Mortgage Crisis
The second mortgage crisis has begun.
Same idea as the first crisis – bad bank loans, weak underwriting, and that risky practice of securitized mortgages – except this time it’s hitting large affordable apartment complexes in New York City.
From the Wall Street Journal on Aug. 15 (and also reported in Crain's): “The owners of the 1,230-unit, rent-controlled Riverton Apartments in Manhattan's Harlem neighborhood anticipate defaulting on the property's $225 million mortgage by next month, marking one of the housing bust's largest collapses of a New York City residential development.
“Developers Rockpoint Group LLC and Stellar Management have told the mortgage's servicer that they made minimal progress toward their goal of converting half of the 61-year-old complex's units to market-rate housing since obtaining the mortgage in December 2006 …”
We, housing advocates and elected officials, have been talking about this for a while now. In fact, earlier this month I was out in front of 1520 Sedgwick Avenue – The Birthplace of Hip Hop – urging predatory investor Mark Karasick (and his bank lending cohorts like CIBC) to keep their hands off.
We’ve also gathered over 40 elected signatures in a letter to the State Comptroller, asking him not to invest our pension funds in these real estate deals.
My overriding concern is the tenants: low- and middle-income, hard-working residents who often face harassment every time one of these private equity firms gets its hands on a building. I know people who live at Riverton. They make up the bedrock of the Uptown community. We’re talking about community leaders, business owners and homemakers. Did Stellar expect them all to just leave under their own volition? Did Stellar try to push them out and fail?
But this is not just about a small corner of Harlem or The Bronx. These deals have ripple effects that hurt the overall economy. When the Masters of the Universe and the Smartest Guys in the Room recklessly gamble on our homes, everybody else is left holding the ball.
I can’t help but contrast this with the work we’re doing today in Albany on the State Budget. While I may not agree with everything Governor Paterson wants to cut, I give him a lot of credit for taking proactive steps to avert a financial crisis.
Meanwhile, the Stellars and Mark Karasicks of the world apparently have nothing better to do with their billions than provoke a new financial crisis.
Senator José M. Serrano represents the 28th District, which includes parts of the South Bronx, Highbridge, University Heights, East Harlem, Yorkville, and Roosevelt Island.
The Second Mortgage Crisis
I've read this trhee times now and it's clear that he hasn't said anything other than blather.
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I hope this is an indication that this strategy of trying to kick out rent controled tenants is failing. It's outragous that the pension dollars of city workers might be going into real estate funds that are based on this strategy. We need more afordable housing and less speculative real estate deals. The city pension funds should be investing their funds in affordable housing projects and the city and state should be concentrating their limited resources in the same way rather than subsiding market and luxury housing through 421 A and J51 tax abatements.
I didn't know the state constitution intended for the senate to meddle in the private affairs of tenants and landlords. I take it from the above that higher-income individuals are not 'hard-working.' Did you think of that during your month long recess? Very 'hard-working'. The city pension funds should invest in projects that maximize the return on their investment, not for political purposes. If this was done in the private sector, we'd call in another Enron/Worldcom scandal. Every retiree in NYCERS should sue for a breach of fiduciary responsibility. Every taxpayer should minimize their tax liability as much as legally possible to compensate for the increases later on because of the lower returns on the pension fund that will be supported by taxpayers. Forget about the dribble from these wannabe freakanomics bums...when the public provided grants, mortgage assistance at rates not available in the marketplace, eminent domain to "clear the field", tax abatements, guaranteed rates of return, nobody said squat. These buildings stabilized neighborhoods when the market said to abandon the entire borough of the bronx and half of manhattan and brooklyn....should we have listened to the red-lining bastards then?....i think not...... the market only listens to their investors, not the public good.....hopefully these goals align, but not always.....those buildings would not have been built without joe taxpayer doing some heavy lifting and taking all of the risk, but now they are worth two nickels the only question these fake adam smith's want to ask is "why is the gov't all in my business" and "distorting the housing market?" our elected stewards should make the burden easier for average folk, not hanging ourselves with our own resources. While you cant take it too far and must get a good return....unbridled capitalism at one time got good returns for slavery, prostitution, illegal drugs, apartheid, and whole host of ills. if our only master is rate of return, perhaps we should be investing in oil prospecting in darfur., mr. jintao....the nerve of some people.....what gov't maybe should be careful is giving too many trillion dollar guarantees to all those clowns downtown who keep screwing up the economy the moment the gov't regulators stray too far.....those finance people are like children you have to keep watching.......the greedy little theives are so confident, but their remedies never seem to benefit anyone but themselves.......listen to them not......KEEP FIGHTING FOR AFFORDABLE HOUSING Wow is all I can say. Here in western michigan theres nothing but foreclosures and empty houses. My parents lost their house then me and my sister got behind. No bank would refinance me and finally my a guy at my local bank refered me to Chris over at www.proloanmods.com and I saved my house with 5.375% fixed rate. Since then he's helped 4 of my friends. hopefully the government will help us out this mess but until then call Chris.
Bloomberg News is reporting that the possible Riverton apartments default is widening spreads on commerical mortgage backed securities across the board. Evidently investors are shocked, shocked to find out that bond pools have loans based on such ridiculous assumptions -- like 93% of the units going market rate by 2011.
This isn't the second phase of the mortgage crisis. It is one small part of the stupid debt, to hell with tomorrow crisis -- federal, state, local, corporate, personal. I wonder if the NYC pension funds are invested in these particular bonds. Rumor has it Tishman is having problems at Stuytown too, despite all the rent regulation illegal sublet abusers they were able to get rid of. Perhaps their underwriting assumed that whas the whole complex! Let the lessons be learned.
After researching all the companies, I also tried using www.proloanmods.com I was in the same situation as Mr. Hickey. I had a 10.75% rate. I'm now at a 6.0% fixed rate and I'm not afraid of losing my house anymore. The people over at www.proloanmods.com were amazing. They listened to me and understood what I was going through. In the end, they were very affordable. I'm glad I did my research on them, it paid off!
my word, with all this information, you would think that I can come up with some kind of opinion on this, but I can't. I'm glad that I'm not involved in the decision-making process on this issue.
I am worried however, about the size of this bail out and how it will detrimentally affect the buying power of the American dollar. Not that my opinion or worries will affect anything anyhow. I called that proloanmods place that Jeff mentioned. I checked them out with the Better Business Bureau and then decided to use them. I was at 9.9% on an ARM that was adjusting in December. I was also 2 payments behind and was a year behind on my property taxes. Those days are behind me. I'm with Chase. Jay over there did my loan modification and he got me 4.75% for the first two years and then my rate goes to 6.0% after that and is fixed for the rest of my loan. Both payments I was behind were put on the back-end of the loan and the bank even paid my property taxes and put that all on the back of the loan and set me up an escrow account. I almost used another modification company, but they didn't check out with the Better Business Bureau. I'm glad I used www.proloanmods.com. It's sad for all of the tenants of a building when the building owner defaults on the mortgage. Hopefully they can make arrangements with the lender to keep their homes. Jack @ <a href="http://www.grand-rapids-mortgage.com">Grand Rapids Mortgage Company</a> We do live in times of need and having a good expert by our side can make the difference in the future. I am not much of a mortgage expert but I do trust my Austin mortgage agent, let's hope Austin won't follow the New York pattern and keep it's relative stability.
That was the day when the Dow Jones Industrial Average hit its historic peak. From there, it was all downhill – slowly but steadily at first, and then violently after last August – until the Dow bottomed (for now) on March 9 of this year. Over that span, the index lost 54% of its value. It’s been a Best Insurance Guide to just about everyone. But it’s already being referred to as the crash. As if the unpleasantness were now all behind us. More likely, in the future it will be seen as, simply, the first crash. That was the day when the Dow Jones Industrial Average hit its historic peak. From there, it was all downhill – slowly but steadily at first, and then violently after last August – until the Dow bottomed (for now) on March 9 of this year. Over that span, the index lost 54% of its value. It’s been a crushing blow to just about everyone. But it’s already being referred to as the crash. As if the unpleasantness were now all behind software gestionale. More likely, in the future it will be seen as, simply, the first crash. As with the weather, there were some hints of trouble here and there on Wall Street. But all in all, things could not have seemed better. Little did we know, the stormy end of 10/9/07 signaled a very large bubble that had just popped <a href="http://www.sure-braindumps.com/646-363.htm">646-363 braindumps</a>.
That was the day when the Dow Jones Industrial Average hit its historic peak. From there, it was all downhill <a href="http://www.sure-braindumps.com/642-436.htm">642-436 braindumps</a> slowly but steadily at first, and then violently after last August – until the Dow bottomed (for now) on March 9 of this year. Over that span, the index lost 54% of its value. Crisis can;t be helped since most of the families now are selling their properties than buying them..
It's sad for the tenants while we are doing their job well. <a href="http://www.BuyingPropertyCyprus.co.uk">Buying Property Cyprus</a> with all the crisis that's happening in the country? The US financial crisis as far as I can recall started on the housing industry, andd housing is a big industry that collapsed..
this was really helpful in my research..but i think the second mortgage crisis has not yet come..
this has been a good article to read on..i hope this crisis wont come..
i really does hope the mortgage crisis wont come...its gonna be anotehr depressing days for us..
that this crisis wont come anymore..there are a lot of crisis that we are already in now and i down want to add another..
It is intersting to note that this simple principle of a temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt is not sparing both the small and large affordable apartment complexes in New YorK City. link building services
Is anything new about this problem? This is the policy of today's world of business. Mistake by one and consiquences for all. If our policy maker really have any thought about their duty, then they should prepare any policy to be implemented from social point of view. Grain Flaker
this was really helpful in my research..but i think the second mortgage crisis has not yet come..
Same idea as the first crisis – bad bank loans, weak underwriting, and that risky practice of securitized mortgages – except this time it’s hitting large affordable apartment complexes in New York City. Interesting trend needs to be arrested. thanks. <a href="http://www.charmingchick.com/bride-and-groom-just-married-flip-flops.html">just married flip flops</a>
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Is this a coninuation of the original mortgage crisis or is it a second one? Obama is destroying our country. It is time to stand up.
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I'm dealing with just the one mortgage myself at the minute. As a matter of fact, I'm moving out so I can rent it out instead. The last thing I want is to lose it. This way I can keep ownership and let someone else pay my mortgage. I'll be under the bridge in my cardboard box if you want me.
I'm dealing with just the one mortgage myself at the minute. As a matter of fact, I'm moving out so I can rent it out instead. The last thing I want is to lose it. This way I can keep ownership and let someone else pay my mortgage. I'll be under the bridge in my cardboard box if you want me.
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