A handful of companies connected to Apollo Global Management’s real estate business received subpoenas from a New York state regulator as part of an investigation into allegedly predatory low-income home buying schemes.
The New York State Department of Financial Services subpoenaed ARM Manager LLC, an Apollo subsidiary, along with a real estate investment trust it oversees, Apollo Residential Mortgage.
Two other firms unconnected to Apollo also received subpoenas as part of the investigation — Battery Point Financial and New York Mortgage Trust.
The regulator is looking into so-called “bond-for-title” financing agreements made with home buyers by a residential REIT connected with Apollo, Bloomberg reported. The deals, often considered predatory by housing advocates and investors, require buyers to make regular principal and interest payments, but don’t grant rights of ownership until the entire purchase price is paid. In many cases, buyers can forfeit all money and interest in the property if their monthly payments are more than 30 days late.