Subprime Mortgage Wasteland in the Bronx

Williamsbridge — The glass is gone from the windows of 767 East 216th St. The wooden house sits on a sinking yard — its windows staring out with dead unblinking eyes. At 762 East 217th St., menus and newspapers clutter the tiny vestibule, the front door doesn’t lock and the buzzers don’t buzz, although people still live in the apartments. The house at 749 East 213th St. just looks disappointed; the proud brick three-story could have sheltered several families but it faces the intersection hollow, no glass in its storm door, no life in its windows. At 1041 East 216th St., newly built and utterly empty, a line of pink violation notices from the Department of Buildings hangs like some sad bunting welcoming the foreclosure age.

This is what the subprime meltdown looks like: block after block of brick one and two family homes in this working class neighborhood in the northeast Bronx are for sale, in foreclosure proceedings or simply abandoned, blank doors and windows gaping like open mouths. Fifteen lis pendens — notices of foreclosure — were filed for property in Williamsbridge since February 15. There were 86 during January; 54 in December.

There are six homes in foreclosure or headed there on one short block of East 217th Street, just off the commercial district of White Plains Road. Tenants at 720, a newly constructed brick building sold as co-ops, are in foreclosure. CitiBank’s mortgage unit alerted the owner of 732 just up the block that it began foreclosure proceedings the day before Valentines. 746 is in foreclosure. So is 747 across the street. And 760 is up for auction. And 762 next door. And Nancy Lewis at 815 on the corner of the next block is getting notices from Washington Mutual, who sold she and her handyman husband a $400,000 mortgage in 2006.

“A lot of people got scammed,” she said last week, after picking up her daughter from school. “People got riped off. Mhmm. And I’m one of them,” she said, shaking her head. The Lewises bought their house so their grown children and grandchildren could all gather in one place. “We wanted a place they could all come to, a backyard for the kids to play.”

Ms. Lewis was reluctant to discuss her finances in detail, but the $3,000 a month mortgage payments are unaffordable. She believed the mortgage broker’s version of new math when he sold she and her husband their home, not realizing until later that brokers earn a cut of every mortgage they sell, the bigger the mortgage, the bigger the cut.

She’s not alone. In 2006 Williamsbridge had one of the highest rates of homeownership in the Bronx, 31 percent, nearly matching the citywide average, according to data analyzed by NYU’s Furman Center for Real Estate and Public Policy. But while the neighborhood had the highest rate of mortgage lending in the borough bankers once shunned, a full 50 percent of those mortgages, and 51 percent of home equity loans, were subprime.

Many had adjustable interest rates that exploded to usurious levels after two years, which is now. With a median household income of $31,000, many people in Williamsbridge couldn’t afford to pay their mortgages to begin with. Before the subprime boom and the development of innovative mortgages products that lenders sold to investment banks and investment banks sold to investors, these loans never would have been granted. But the masters of the universe on Wall Street figured out a way to spread the risk of rotten mortgages. They forgot about where the risk ultimately resides, in a neighborhood like Williamsbridge, which is watching as its wealth is sucked right downtown.

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Like so many of the neighborhoods across the United States feeling the first effects of the subprime meltdown, Williamsbridge is a community of first-time homebuyers and working poor struggling to leap into the property class. Major banks targeted their sub prime, some would say predatory lending, on low income neighborhoods in the Bronx, southeast Queens (think Jamaica and Cyprus Hills) and central Brooklyn, according to analysis of lending data by University Neighborhood Housing Program, a Bronx not for profit that advocates for and manages affordable housing.

And like more than half of the two million people the Center for Responsible Lending estimates hold subprime mortgages nationally, Williamsbridge is black. Sixty-five percent black, mostly people from Jamaica, Nigeria and Ghana.

It’s a topic Richard Duodu, owner of the African Market on the corner of 215th Street and White Plains Road hears his customers discussing when they come to the noisome shop to buy salted fish, fufu flour or Nigerian movies.

“A lot of people are complaining about it, how they are losing their houses,” said Duodu, a native of Ghana who rents his apartment upstairs from the shop. “Most of my customers, they own their own houses and another one,” he said. “If it’s affected the house owners, it’s affected the businesses too. People come in and they are counting their dollars, how much can they spend?”

The neighborhood is bracing for disaster. “This is just starting,” said Isaac Dare, owns 11 newly built apartment buildings he intended to sell. They are each and every one empty, because no one is interested in buying. “It’s going to get much worse.”

That’s exactly what Rev. Richard Gorman fears. He is a Roman Catholic priest and has been chairman of Community Board 12, which covers much of the northeast Bronx, since 1990.

“I do not think it’s in the interest of society to allow these people to lose their homes,” he said. “You’ll have all these ill effects from vacancies, the properties being an attraction for criminal activity and families are devastated. Something like this tears at the fabric of a community.”

Gorman said some homeowners were foolish or greedy in buying homes they couldn’t afford, but he lays the blame for the wave of foreclosures threatening his neighborhood squarely at the foot of Wall Street.

“A lot of folks who bought homes were just entering the home-owning class. I don’t think a lot of people really understood the costs incumbent on owning a home. Now they don’t have their homes, their credit is destroyed and their are people who were involved in the speculation who walk away with the money,” he said. “In a financial crisis like this the people who are making money always end up with more and the people who had little are walking away with less,” Gorman said. “To me it’s just a sign of the greed of the banks.”

A variety of state and federal plans are nibbling at the edge of the crisis, encouraging refinancing for homeowners two or three months behind on mortgage payments, who still have decent credit and bought their homes within certain time periods. Gorman said the state and federal governments need a much more comprehensive response, before Williamsbridge and countless other black and working class neighborhoods are bled dry. “We need legislation that is going to undo these unconscionable lending arrangements. We need to make arrangements for these mortgages to be paid in a realistic way, so working class people can move into the home ownership class,” he said.

Gorman urged homeowners in foreclosure or who are struggling with their mortgages to visit a seminar and open house on Saturday Feb. 23 at Cardinal Spellman High School on Baychester Avenue in the Bronx. Borrowers can meet face to face with ten banks to learn about payment programs and get advice from mortgage counselors not affiliated with the banks.