When you hear the words, 'foreclosure crisis,' most people probably think of homeowners who are in trouble, unable to pay their mortgages, and with "For Sale" signs on their lawns.
Here in the New York City there's another face to this crisis: that of tenants living in buildings that were sold during the property boom of a few years ago, but whose new owners have declared bankruptcy and are now being foreclosed upon. In between the filing for bankruptcy and court decisions on ownership, these buildings are often grossly neglected.
500 families in the Bronx have been stuck in this situation for more than a year, after Wells Fargo bank foreclosed on ten properties owned by Milbank Real Estate. With more than 4,400 violations in just 548 apartments, the living conditions are "deplorable," according to NYC City Council Speaker Christine Quinn, at a press conference called in support of the tenants.
"No family should have to live like this because of unstable investments someone else made," Quinn said. There have been no repairs made to the building since March 2009, when the loans went into default.
The press conference announced a lawsuit, filed by Bronx Legal Services - NYC, which argues that once a foreclosure action is initiated, and a court-appointed receiver is in place, the mortgage holder, aka Wells Fargo Bank in this case, can be held liable for maintaining building conditions.
The tenants are demanding that those parties connected with their landlord's failed mortgage take responsibility for repairing their apartments.
"The disastrous situation confronting Milbank's tenants could not have occurred without the irresponsible behavior of the financial entities involved," including Wells Fargo and the commercial mortgage-backed security trust, the court filing says.
This week Bronx Congressman Jose Serrano weighed in on the case, saying, "We cannot have buildings falling apart as legal wrangling takes place over ownership or foreclosure. Tenants are entitled to housing that is safe and decently maintained."
Serrano pointed to a recent decision in New York State Court that ruled that tenants could seek financial compensation from lenders when buildings go into foreclosure.
A hearing on the motion is scheduled for May 10th in Bronx Supreme Court.
Meanwhile Wells Fargo is taking heat on the other side of the country. A demonstration at its annual shareholders meeting on Tuesday called for a halt to predatory lending, jobs creation and keeping families in their homes. The action was one of many aimed at the financial industry and Wall Street that are taking place around the country this week and next.