Foreclosure Follies

There I stood on the steps of the Bronx County Courthouse one chilly day in February 2007. No one was there except me and the cousin of my brother's professional real estate investor friend who had bought, refurbished and sold dozens of seized buildings throughout the city.

The situation was dire. My rent-stabilized apartment had been bought by a new landlord who was playing hardball, trying to remove the former tenants so that he could renovate the apartments and rent each one for $1,300 dollars or more. Little old rent stabilized me had simply outlived my usefulness.

Although my 1912 vintage 3rd floor walk-up had always been creaky, and I had tacitly accepted the responsibility of caring for things such as painting and plastering that technically were my landlord's responsibility, I never knew real suffering until my latest landlord took over. In the year that I was his tenant, I had suffered complete turn-offs of heat on twenty degree days for days at a time.

I would call Housing Preservation and Development and they would promise a response within three days or so. Perhaps I would speak to them, if I did not die of exposure, that is assuming my arthritic limbs would carry me to the door. Men were working on the adjacent apartments night and day, and holes had been bored straight into my bedroom, which I covered with cardboard for decencies sake.

Now was the time for me to get a piece of the American dream while I was still above-ground to enjoy it. Like it or not, I was poised to become another bubble aloft in the bubble of the Century.

How to describe the madness of the last few years now that the fever has broken? Well, picture a bespeckled 40 something clerk. Few savings, low paying job, anteing up real money to buy something that I was not even allowed to see beforehand. Talk about a pig in the poke. There might be no floors, no ceilings, the aroma of 88 cats or an angry occupant with a shotgun waiting for me.

Yet here I stood, and winning this game was a fight for life itself. The auctioneer and attorney for the building appeared a few minutes after the official start time for the auction. They stalled while hoping that some red-blooded competition would emerge-but alas, I was the only pigeon. Having been briefed beforehand, I wagered $100.00 over the minimum bid and secured my prize. Not having expected the property to go quite so cheaply, we were short one certified check for the extra $10.00 representing 10% of the offered bid of $52,100. After a brief consultation, it was agreed that my certified checks in the amount of $5,200 plus $10.00 in cash were kosher.

So began a six month journey ending in heartbreak. Why was I here? Well, they say fools rush in where angels fear to tread, but so do the very desperate. With a middling clerical job and modest savings I could not even begin to look at $1,200 or 1,300 /month apartments. I feared being attacked and having my property destroyed as had happened to several unwary friends who had invited raving psychopaths into their lives in a vain attempt to stake their claim to a tiny New York apartment.

How about going the real estate agent route? Well I had looked at several tiny pied a terres, including some just large enough to be my coffin and conveniently located next to the road that every Hindu in Jackson Heights traversed daily in their pilgrimages from home into Manhattan. Even these losers were beyond my reach financially. I had set my sights on a peanut-sized apartment in Forest Hills, across the street from my brother, and after divesting myself of many cherished possessions, including my late mother's favorite coat, I was informed that the Board would not accept such a low price. Offered an opportunity to participate in some hanky-panky to hide the real price, I decided to avoid a career in bank fraud and let someone else claim the prize. Face it. Good apartments in move-in condition started in the six figures.

For me to flee the grim fate of being frozen or buried under falling plaster I would have to mobilize my contacts and my blue collar birthright. So here I was with cousin on the steps with my new purchase wondering what the devil I would do next.

I began by visiting ACORN, a low-income advocacy group, in hopes of scarfing up a nifty subsidized loan featuring no closing costs, a break on points, and a grant toward down payments. This was a specialty item offered by one or two banks, and in my case the bank was Citibank. After I had spent days assembling the paperwork, I was told that I would have to have the house inspected before I could qualify for the loan.

Oh, my God, what was the point? If it could pass an inspection, no one would have let me have it. I knew that I would need Mr. Goodwrench, Mr. Goodhammer, Mr. Goodsaw and every other honest workman. I would be channeling the entire bench strength of my brother in law's Electrician's Local 3 as well as getting recommendations and labor from Mr. Knowledgeable Real Estate investor and Cousin. I was certainly the original dumbbell, and I put my trust in wiser heads.

I inveighed the Coop Management into letting me into the apartment with my chosen engineer, in spite of the fact that they were not required to let anyone into the place until the final check had cleared. After getting a checklist of things plumbing, electrical and structural to be repaired. I submitted the results to ACORN only to be told that I could only have the loan if I repaired the defects first. That's right, the bank expected me to fix property that I did not yet own as a condition of buying it!

So much for that theory. So much for the weeks of work, paperwork, distraction from my job and cost of the engineer's report, all to no avail. After my brief fit of apoplexy, my brother encouraged me to try again with a more aggressive division of Citibank versed in the vagaries of commercial investment.

Although I had given up the special perks, was perfectly willing to pay a higher interest rate, had fully documented my finances, savings, job stability, and credit, that original caveat came back to haunt me. Although irrelevant to a standard loan, the original conditions imposed by HUD were appended to the new loan and the bank thought it would be just dandy if I fixed it up before I bought it. Never let it be said that bankers lack imagination.

Fierce battles ensued and my more business-oriented loan officer was able to bring the dreamers back down to earth. They reluctantly concurred that it was unlikely that someone would agree to spend thousands to fix a property that they might never own.

Now came the fun part. My original attorney had fled the field of battle when he realized that I was trying to drag him into a foreclosure mare's nest, so my brother enlisted a stalwart veteran of many deals to be my knight in shining armor. Now started the latest sally, the lien search. While the lawyers were searching liens, and I was writing checks for said research, I made arrangements to meet the coop board for my interview.

Even though I had agreed to lay out $52,100 on an uninhabitable hovel of an apartment in the Bronx, my entrance into the hallowed halls of coop owners would not be complete without their approval. Winning the right to enter into their esteemed presence required the writing of several other large checks so that my employment, criminal history and credit history could be independently ascertained . I was giving complete strangers carte blanche to stick their noses into my business and to sit in judgment of my finances and character, all for the privilege of handing over my life-savings and indebting myself to a 15 year mortgage.

I took another day off from work to match the day off I spent on the frigid steps of the Bronx County Courthouse, and the day I had spent with the engineer. I met with my prospective fellow owners, a perfectly amiable crew, and passed with flying colors.

Now it was time for my lawyer, and their lawyers, and the banks lawyers, and every lawyer on earth it seemed to reach an agreeable time for doing the deed. In the fullness of time, July 7th was agreed upon.
At last!

Hours before I was to sign the papers, I got the news. The deal was off. One of those apparently innocent liens which both my attorney and my lawyer brother assured me was nothing, sunk my ship. Apparently two liens had been placed on the property. The first was quickly disposed of, but the second hung on like the dead hand of fate. Although there was every indication that no true debt existed, the satisfaction documentation had never been filed and the lien never removed, even though it was in all probability paid.

Thousands of dollars and six months later, still no apartment. I would later narrowly escape being killed when my ceiling was collapsed onto my floor and forced to flee into a sister's apartment while they rebuilt. I enlisted the help of a very kind and very powerful local politician and avoided homelessness by the skin of my teeth. Although I sympathize with everyone upside down on a mortgage and know I narrowly avoided being one of them, I pray every day for the housing market to come down just a little bit more so that I can buy through a real estate agent and never go through this again.