A nonprofit that rescued four dilapidated buildings in Bedford Stuyvesant, Brooklyn from investors in foreclosure is now on the brink of losing them itself, after allowing some buildings to fall into severe disrepair.
The group, Mutual Housing Association of New York, planned to renovate the 29 units that it bought the notes for in 2012, with help from the city. But the properties have been stuck in limbo for two years in Brooklyn courts, which have a reputation for taking twice as long as the national average to process foreclosures.
Mutual Housing needs to assume control through foreclosure before it is eligible for additional city funds it says it needs to complete repairs, the Wall Street Journal reported.
Now the arrangement, which housing advocates had hoped would serve as a template for getting dilapidated buildings back in shape, looks like a failure, the Wall Street Journal reported.
The properties, at 230 and 232 Schenectady Avenue, 266 Malcolm X Boulevard and 896 Madison Street, were acquired with help from the New York City Acquisition Fund. The Fund backs affordable housing operators so they can compete with profit-driven investors, but nonprofits are leery of the program because they fear the onerous foreclosure process — fears validated by Mutual Housing’s experience, according to the Wall Street Journal.
Still, Mutual Housing is hopeful.
“We’re not sorry we took this risk and we don’t believe it’s over but it absolutely has been a bumpy ride,” Ismene Speliotis, Mutual Housing’s executive director, told the Journal.
On average, Brooklyn foreclosure cases take two-and-a-half years to close, the Journal said, citing data from RealtyTrac. [WSJ] – Angela Hunt