Some 200 union protesters stormed into a Mortgage Bankers Association conference on mortgage servicing yesterday in Washington D.C. to rail against home builder PulteGroup, whose mortgage unit chief executive Debra Still was moderating a panel there. CNBC’s Diana Olick reported from the scene that the group was angry over $900 million in stimulus funds that they say the company should have used to create jobs for construction workers. The commotion shut down the conference for around 10 minutes, but the group ultimately left peacefully.

Charles Antonucci, the former president of New York’s
Park Avenue Bank, pleaded guilty today to fraud, admitting in Manhattan federal court that he stole $6.5
million from the bank and re-invested it under his own name, Reuters reported.
Prosecutors said Antonucci was the first person accused of attempting to steal U.S. government
bailout funds in the financial crisis. They also said that Antonucci, 59, made
false statements in the bank’s application for $11.2 million from the Troubled
Asset Relief Program. Antonucci was ordered to forfeit $11 million and interests in all of his properties under a
plea agreement. Antonucci admitted that he received
private planes, luxury cars and cash in exchange for doing special favors for
clients. “For these acts, I offer no excuse. I know what I was doing is
wrong and I apologize to those I hurt financially,” he said in court. [Reuters via NYT]

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The inspector general at the U.S. Department of Transportation has launched a probe into how government funds were used in some of the city’s largest transit projects, many of which have fallen years behind schedule and have been plagued by major cost overruns. The projects in question — the Second Avenue Subway, the Fulton Transit Center, the new PATH terminal and the Long Island Rail Road extension to Grand Central Terminal — have received $7 billion in federal funds, which were overseen by the Federal Transit Administration. The investigation, which began March 25 and is expected to last 10 months, will look into whether the FTA muddled its regulatory job and allowed the projects to stray so far from their original plans. The PATH terminal is a Port Authority project; the other three projects are backed by the Metropolitan Transit Authority. [Post]

With President Obama’s latest foreclosure prevention program recently unveiled, some may be wondering which homeowners will be able to take advantage of the $14 billion Troubled Asset Relief Program initiative. According to “Today” show personal finance correspondent Sharon Epperson, the program targets two kinds of at-risk borrowers: those who are unemployed and those who are underwater. And while the program won’t help the unemployed on the job line, jobless borrowers will be able to have their payments reduced for as long as six months, something that could help them out in the short-term, Epperson said.

The former president of the Park Avenue Bank, Charles Antonucci,
has been arrested on charges of self-dealing, bank bribery,
embezzlement, and fraud on the New York State Banking Department, Federal Deposit Insurance Corporation,
and the Troubled Assets Relief Program. The office of the United States attorney for the Southern District will be
announcing the charges at a press conference at 1 p.m. On Friday,
federal and state regulators shut down the Park Avenue Bank and
sold its deposits to Valley National Bank. TRD [more]

Howard Milstein, head of Milstein Properties

Howard Milstein, head of Milstein PropertiesEmigrant Savings Bank, the struggling Milstein-owned institution and the lone major city holdout in the federal government’s Troubled Asset Relief Program, received $30 million in capital infusions from the Milsteins during the fourth quarter of 2009, according to a recent report to the Federal Reserve. The Milsteins’ fourth-quarter contribution brings the total to $200 million injected into the unprofitable bank over the past three years. With a junk credit rating and a “negative” outlook from Fitch Ratings, Emigrant continues to post losses on real estate and business lending and failed private equity investments. Its parent company, New York Private Bank & Trust Corp., posted a net $256 million loss last year and took $267 million in federal bailout money. Still, Eric Newell, a debt analyst at Fitch Ratings, said “the bank’s capital position seems to improving.” But it may need even more donations from the storied Milstein dynasty, back on the radar with the impeding sales launch of two condo towers in Batter Park City, in order to absorb future losses. Emigrant has only 3 percent of tangible capital, compared with the 5.6 percent average of its peer group. [Crain’s]  

The city’s real estate industry is lobbying for federal stimulus money for the cash-strapped No. 7 subway extension, calling it a shovel-ready project that will improve the quality of life for future residents of Hudson Yards. The planned extension is currently slated to create just one new subway station at West 34th Street and 11th Avenue by 2013, allowing the train to zip by another proposed stop at West 41st Street and 10th Avenue, the Post’s Lois Weiss reported. It would cost an estimated $500 million to create the 41st Street stop — right above a planned Related Companies apartment tower — and another $300 million to make sure the station is up to snuff in terms of safety. Since funding isn’t available, the feds “could bid it right out” as a stimulus project, said Mary Anne Tighe, chair of the Real Estate Board of New York. Ann Weisbrod, president of the Hudson Yards Development Corp., said that if the Metropolitan Transportation Authority delays construction of a 41st Street station until after Related builds its tower, it will ultimately cost significantly more. [Post]

Citigroup announced today that it will suspend foreclosure sales and
distribution of foreclosure notices between Dec. 18 and Jan.17, giving
its customers a break for the holidays. For 30 days, the bank will not
hassle its distressed customers with first mortgage loans held by
Citigroup and CitiFinancial North. The suspension will affect nearly
4,000 homeowners who were set to either have a foreclosure sale or
receive a foreclosure notice during that period, which amounts to
nearly 20 percent of the company’s $746 billion mortgage portfolio,
according to Citigroup. The 30-day suspension announcement came one day
after the Treasury Department said it would not sell any of its stock
in connection with Citigroup’s offerings, disputing earlier reports
that it would sell up to $5 billion of its shares when the bank
completed its new stock offering. The decision subsequently caused
stocks to drop 7 percent to $3.22. However, Citigroup, which has been
one of the largest recipients of government aid, has reported that it
has raised the $20.5 billion it needs to exit TARP. [CNN]
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East Harlem construction workers at the nation’s first housing development to be built with federal stimulus money have been severely underpaid, workers have alleged. The U.S. Labor Department and the city department of Housing Preservation and Development are investigating claims that workers at Hobbs Court on East 102nd and 103rd streets, and at the Ciena on East 100th Street — slated to open in 2011 with 340 affordable apartment units in total — were scammed out of their rightful wages. A worker on the interior demolition at Hobbs Court said he was paid $32 per hour for a job that is lawfully required to pay $49 per hour, and on top of that, the work site was unsafe, with no fall protection or place to attach safety harnesses. The two developments received $26 million from the stimulus act’s Tax Credit Assistant Program, and the city chose Phipps Houses and Urban Builders Collaborative as the developers through competitive bidding. Lettire Construction Corp. is the general contractor. [NYDN]

CBRE’s Enoch Lawrence (left) and Sam Chandan of Real Estate Econometrics

In a sign of how troubled the market for bonds backed by commercial
real estate may be, and by extension, the future of some office
building owners, a key deadline for federal bailout money designed to
get money flowing again to landlords has come and gone without any
takers. Up until June 16, investors in those bonds, like insurance companies,
hedge funds and credit unions, had been invited to dip into the Term
Asset-Backed Securities Loan Facility, or TALF, to borrow some of the
$200 billion fund set by the Federal Reserve Bank of New York. The chief reason there’s been zero interest in TALF so far, according to industry analysts, economists and brokers, is that there hasn’t been enough time to put complicated deals together. Indeed, it was only in May that the Fed announced that commercial mortgages would be eligible for TALF money, and a month wasn’t long enough for lenders to market their assets to willing buyers, they say. [more]