Foreclosed apartments in 19 South Bronx buildings that were going to be sold off in an online auction next week were saved today. The city announced that Fannie Mae canceled the auction.
Financed by Deutshe Bank, the Ocelot Capital Group — a real estate firm that was started by wealthy Wall Street investors and celebrated as a rising star investor in real estate magazines plunged headfirst into the New York City housing bubble back in 2006, spending nearly 30 million to buy low-income housing in Manhattan and Bronx. Thanks to the Wall Street meltdown, the group defaulted on its mortgage — leaving Fannie Mae with the $29 million mortgage package it underwrote for Deutsche.
This was after conditions in the building had gotten so bad that residents had bought cleaning supplies to clean building hallways on their own and had taken up a collection to pay the salary of a new super. The buildings still suffer from thousands of housing code violations, including collapsed ceiling and faulty electrical wiring.