Politicians Call On FDIC To Protect Affordable Housing

NEW YORK -- City politicians are calling on federal regulators to start making use of a little-known provision in the sweeping financial reform bill passed last year that could help protect housing for low-income residents.

Local politicians, residents and housing activists gathered outside a dilapidated Bronx building Thursday to launch the opening salvo in a battle against New York State's biggest savings and loan -- which, they say, is exacerbating the growing threat to affordable housing in New York City.

New York Community Bank has been accused of trying to profit from the seizure of foreclosed apartment buildings in the area, selling the buildings at prices reminiscent of the height of the housing boom. But property prices have taken a hit, and tenants say conditions at the buildings -- run-down even during the market's flush years -- have deteriorated further.

The bank's representatives did not respond to calls for comment.

Politicians have accused the bank of trying to claw back every penny of the bad mortgages it initiated while the housing bubble inflated, regardless of the consequences.

"Instead of selling them at the price that they're worth, making it clear that major repairs need to be done, New York Community Bank was only trying to make a quick buck," New York City Council Speaker Christine Quinn said, adding that regulators like the Federal Deposit Insurance Corporation should examine the "inflated fake numbers faceless, greedy bankers use to make a profit."

A provision in the Dodd-Frank financial reform bill passed last year calls on federal agencies to protect apartment buildings in foreclosure. Politicians said they are still unsure what form the provision will take, but said the law gave the FDIC the power to intervene in bad deals.

Specifically, Quinn said, the FDIC should force New York Community Bank to disclose its finances and the buildings' repair costs.

At the height of the financial crisis, roughly 100,000 apartments in low-income neighborhoods in New York were bought by investors who planned to raise the rents or flip the properties, according to affordable housing advocates. Many of the apartment buildings fell into foreclosure, leaving tenants in limbo -- a situation politicians tried to address in the financial reform bill.

Long-term residents of the Bronx brought their neighborhoods back from the ruin of the 1970s and 1980s, only to watch speculators and banks make a quick buck then walk away, according to Ruben Diaz Jr, the borough's president. "It's downright criminal," he said. "We're calling on the FDIC to stop New York Community Bank from profiteering at the expense of Bronxites, all while their buildings fall apart around them."

Comments

[concerned21 2]

07:21 PM on 04/09/2011

am i missing something? i dont see the names of all these politicians in the article?

[Genosse Joe]

10:08 AM on 04/09/2011

"Politicians Call On FDIC To Protect Affordable Housing"

Politicians want government to force banks into making loans to a high risk defaulters.
This is precisely how we got our housing bubble which burst in 2008 and caused the Obama-Pelosi recession.

Now they want to double-deep it.

[Corners]

03:14 PM on 04/09/2011

Right. Poor banks were forced into making these loans that they had no liability for after being sliced and diced then sold off to pensioners. Poor banks....They were hoodwinked, right? If thats the case, they get paid a lot of money to be stupid. I dont buy it.

[Corners]

03:17 PM on 04/09/2011

Don't get me wrong. Its an issue, but for anyone including banks to turn around and blame people that want to own homes for the crisis is dirty and wrong. It was the gambling going on by financial institutions borrowing at 30,40 and 50-1 against their assets and don't let anyone else tell you different. All that cheap money is going somewhere and the financial institutions were more then happy to spend it.

[TheAnarchist]

03:12 PM on 04/08/2011

Screwing the Middle Class again, usual.

The Fed has allowed banks to suspend mark to market accounting so many banks are merely rolling over Commercial Real Estate (CRE) debt and allowing borrowers to renew loans even if they currently are non-paying.

Most Americans do not have the luxury to stop paying on their medical bills, student loans, or car payment. It is better for a bank to pretend that their CRE is worth a peak value even if no money is coming in.

The Fed fully understands that there is little political will in the public to bail out failed luxury hotel projects or empty shopping malls that catered to a wealthy class. That's why they haven't said anything about it.

The Federal Reserve is trying to orchestrate a slow inflationary environment so banks can walk away from these debts. It cannot keep prices elevated because incomes simply do not justify prices in many locations.

Ultimately this is a massive hidden bailout. The Fed artificially keeps rates low and this punishes savers. The Fed has made it a priority to bail out banks by allowing them to continue to keep zombie commercial loans on their books. And these banks use current bailout funds to speculate/gamble in global stock markets to pad their balance sheets. Yet the cost is shouldered by the working and middle class of this country.

http://www.mybudget360.com/federal-reserve-silently-grows-balance-sheet-commercial-real-estate-economic-growth-bailout-banks/

[Genosse Joe]

10:10 AM on 04/09/2011

It looks like you think that it is wise for creditors to throw their money away.

You are a nice person with a big heart.
Please, send me your money and I promise not to return them to you back.

[TheAnarchist]

10:30 AM on 04/09/2011

Please read a bit more about the mechanics of bailouts before making erroneous comments about the process.

[studlyguy]

11:05 AM on 04/08/2011

Let's just say when they stop with the housing subsidies and the people who are poor and even the lower and some middle who are needing housing assistance start living in shanty towns and roaming the streets with no toilet facilities and using the back too nature approach so to speak,will be having the same virus,bacteria problem India is now seeing because of there housing problem,will see here in America.

[shadow013]

07:04 AM on 04/08/2011

If we really wanted to enable people to afford housing, we would back out of the World Trade Organization's one-world-government. Compliance with WTO meant banking deregulation that enabled the financial crisis and too-big-to-fail. WTO is "free trade", not "fair trade" and results in more jobs exported. The big banksters/ hedge funders and multi-national corporatists don't care about the U.S. or any particular country. They care about getting rich - and they have.

[PWM]

11:59 AM on 04/08/2011

There is no one-world government.

[TheAnarchist]

07:44 AM on 04/10/2011

Oh please, and would you call the global central banking cartel, an organization of financial firms independent of government?

[karen1p]

10:02 PM on 04/07/2011

This should say:

"Politicians call on the FDIC to Protect Housing"

[realitytrumpsbull]

09:52 PM on 04/07/2011

I think 'affordable housing' is a crock. If they wanted to make housing affordable, they'd build low-cost units that people could buy for like, 50k. Might not ever be worth much, but if it keeps the rain out, it's Good Juju. Instead, what you have is basically an indirect subsidy to the real estate industry, where if you're 'low income', now you can play at all this eldritch financing magick, and...somewhere in there, I think everybody kind of forgot that the lowest-cost housing, is a tent. I think that all 50 states and counties should have a place where if you've hit the skids, or just don't want to play anymore, there's still somewhere you can go besides the county lockup or outside the city limits by sundown. Sometimes, people get caught in the gears of the Big Money Machine, and if that's you, and you want off the treadmill, which is part of what this is about, you should be able to go span your 20 square feet of canvas and take a load off. Putting more pressure on government to spend more money to keep subsidizing an overpriced market(reinforced by entities like B of A demolishing any homes they can't sell quickly, to stabilize market values) is just plain taxpayer abuse. Government itself is currently working on getting their fiscal house in order, let's see more common sense, and less high-dollar hyperbole. Do us all a favor, and get a handle on the circumstance where this country's going 4 billion further in the hole on a daily(DAILY) basis. Be it ever so humble...

[ncsteeler]

10:26 PM on 04/07/2011

New house trailers are typically less than $50K. Used ones are presumablly less and already on a lot. Habitat for Humanity houses are generally less than $100K but you do have some hoops to jump through but you also get an interest free loan and some is forgiven the longer you stay in the house.

My point isn't that they're aren't problems but that there are relatively inexpensive options out there.

[KDMac]

09:31 AM on 04/08/2011

If you're a single mom of three kids with no job, $50k might as well be $1 million.

[Cold in Michigan]

06:27 PM on 04/09/2011

That new house trailer comes with a payment which added to the cost of the rent for the lot can add up to more than what a house payment is going for now. In my area 450 a month just for the space the trailer sits on is not unusual. Now, add on the payment of even a used home, not at those low rates of home owners but 14percent and up, throw in the utilities and you don't have cheap living. Also, in my area none of the areas that have 'parks' where the trailers are parked even have bus service, so unless this poor family has a workable car and money for gas finding a job is out of the question.

[plaidsportcoat]

10:53 PM on 04/07/2011

Who do you think is going to pay for the sewer and water for the tent city, duh

[KDMac]

10:20 AM on 04/08/2011

I figured he'd be okay with p*ssing on trees and bathing once a month.

[libertarian83]

08:03 PM on 04/07/2011

I don't get what's happening here. Is the owner of these buildings trying to sell them for more than they are worth, hiding the actual cost of making needed repairs? That just sounds like standard real estate dealing to me. Nothing that the FDIC should be involved with.

[realitytrumpsbull]

09:56 PM on 04/07/2011

If you start looking and reading and researching and comparing and stuff, you find that there's now NATIONAL property management companies, and even foreign business entities looking to buy up American real estate, and it's all a Big Money Game. Only problem is, if you're a modest income earner in this Con Me, it can result in the lion's share of your monthly income being absorbed into housing costs, be it overpriced rentals, or some kind of mortgage stuff. Cost of living in this country has aspired beyond the affordable, so, 'affordable housing'? Show me where I can park a house trailer for $50/mo., and I'll start thinking that various powers-that-be are serious about that little item. We're becoming just like Germany, and no accident, that. Europe sucks. I hope I never have to back there.

[plaidsportcoat]

10:58 PM on 04/07/2011

"looking and reading and researchin­g and comparing and stuff"

That is what the commenter does NOT want to do, ever. They wish to comment without knowing their butt from a candy cigarette package. That is just WAY to complicated for the average dummerican, and anyhow, they can vote based on their slow thinking, anyhow, so why bother using intellect.

[stopthe]

11:03 PM on 04/07/2011

Funny how germany didnt have the same level of financial crises that we did.they regulate their banks.
 
The big money game is lining the pockets of Bankers and corporate conglomerates
 
Cost of living doesnt "aspire" to anything.
 
The problem is that it is not profitable enough to build low cost housing.It is not profitaqble enough to maintain low cost housing.And business does not pay a living wage in the case of abvout 1/3 of the population.
 
50% of the country pays no income tax BECAUSE they dont make a living wage.Assuming you are not living in a tent and you earn enough your taxes go to subsidize those businesses that refuse to pay a living wage. Mcdonalds, hotel chains ,Walmart,etc.
 
My view is that you should be taxed more to offset your dangerous ideas.Call it a Beck tax.

[gaubladt]

07:36 PM on 04/07/2011

The best way to make housing affordable is to put all the forclosed housing back on the books, and on the market, come what may.
BY the way If you have an underwater mortgage, now is the time to walk away from it.
The Republicans will soon make it a felony.

[plaidsportcoat]

10:59 PM on 04/07/2011

I'd like to know more about that GOP plan right now. Velly interexting!

[TheAnarchist]

04:17 PM on 04/08/2011

Well if they do that we ought to retaliate against the bankers by declaring them felons for embezzling our savings. They take in $10 of our savings and lend out $9. If all of us go to collect our savings we're told the FDIC will cover up to $250k. Well, that is just wrong. Our tax dollars are being used by the FDIC to repay us for the funds the banks illegally loaned.

That's embezzlment!! Two unassociated individuals cannot posses the same dollar simultaneously. That's what causes bank runs..Moreover, we trusted the bank to keep our money safe. They are violating a trust. Look at all the toxic assets they acquired through "liar's loans."

Ya, let them try to pass a law making "Walk Away" a felony. We'll have a 1776 redux.

[wrenmark]

11:37 PM on 04/07/2011

Good idea.....should be a felony. That kind of advise is one of the reasons are country is in the toilet, is that what you did?

[secrets 12189]

07:35 PM on 04/07/2011

http://articles.nydailynews.com/2011-03-21/local/29349198_1_housing-authority-affordable-housing-garbage-issue

[george6090]

06:40 PM on 04/07/2011

Not sure if any of the comments are from people in NYC or not. While I am not a expert, there are rent stabilized apartments in the city. These are ones where the rent can only be raised a certain % a year of so according to the rules, which often change according to who wins, renters or landlords. And the article does not say much about the type of apartments, etc.
In any case the landlords have to maintain the properties. In cases of default, the properties go back to the lender, in this case the NY Community Bank . Since they now own the buildings, they have an obligation to maintain the structures to keep them safe, etc.
Now having said all of the, if the Bank is stuck with too many of these, they tend to hire people to do the least amount to get by and at the cheapest cost, so the maintenance may not be adequate for tenants safety or to meet the standards set by the City. Thus, someone has to lean on the Bank to make sure all of this happens. Hence, the FDIC is being pushed to do the dirty work. Of course we know why the politicians want the FDIC, because they have a lot of clout with the Banks.
Still, I think this needs to be brought to and processed by the NYC agencies who have responsibility for housing and not the FDIC.

[Quitcherbichin]

06:56 PM on 04/07/2011

One of the biggest offenders of the rent stabilized apartments in NYC is good ole Charlie Rangle. He has been lining his pockets at the expense of his Harlem constituents for 40 years. Oh well, I guess the old saying that you get what you pay for certainly describes the representation those poor folks get.

[workingboy]

08:37 PM on 04/07/2011

Read one report where he had FOUR rent stabilized apartments in NYC. Ms. Quinn has been said to be a good friend of the NYC real estate gang. Take it from there.

[RightinWA]

06:34 PM on 04/07/2011

I guess with h.P.'s merger, they could no longer afford to pay writers who could make any sense!

[RightinWA]

06:31 PM on 04/07/2011

good lord... this is what started teh mess we are in....

[Aj Beamish]

06:23 PM on 04/07/2011

"The bank's representatives did not respond to calls for comment."

Same old song.

[blackranger]

11:26 PM on 04/07/2011

they only sing in the money raining shower