Tenants Rally at New York Community Bank from Bronx News Network on Vimeo.

A group of Bronx tenants from a number of foreclosed, violation-riddled apartments have filed a lawsuit against the bank that owns the mortgage on their properties, hoping to hold the lender responsible for paying for repairs.

The lawsuit was filed last Thursday on behalf of tenants by Legal Services NYC-Bronx, the Urban Justice Center, Urban Homesteading Assistance Board and NY Communities for Change.

That same day, residents from the buildings and organizers rallied at a Manhattan branch of the New York Community Bank. They were turned away after asking to see the branch manager to make their case (see the video, above, for more from the scene.)

“We don’t do those types of loans here,” the dismayed manager said, after closing the door to her office once protesters filed inside the bank’s lobby.

“You have no idea what we’re going through, because you live fine,” responded Gennet Riley, a tenant who lives in one of the foreclosed buildings at 735 Bryant Avenue. “We’re here trying to let you understand that we care about our buildings. We just want you to acknowledge us.”
The group then set up shop on the sidewalk outside, chanting, waving signs, and handing out photos of their crumbling apartments to confused passersby. One bank customer, after asking what the protest was about, promptly picked up a poster and started marching with the group.

Tenants complain of long spells without heat and hot water, broken elevators that go unfixed, mold, leaking ceilings and scurrying vermin at the eight Bronx properties: 1221 Sheridan Ave; 1225 Sheridan Ave; 2265 Morris Ave; 2271 Morris Ave; 2345 Crotona Ave; 2350 Creston Ave; 3212 Cruger Ave; and 735 Bryant Ave.

“When it rains, it’s leaking in my bathroom. I have to put a bucket under it,” said resident Carmen Quintero.

Before foreclosure, the buildings were in the hands of a housing group called the New York Affordable Housing Association, and tenants at the Bryant Avenue apartment identified their former landlord as Frank Palazzolo, who has owned dozens of Bronx properties over the years, many of them notoriously neglected.

Tenants argue that the bank, which lent some $19 million to the landlords of the buildings, should be held accountable for doling out the risky, unsustainable loans that they say inevitably led to foreclosure and neglect.

The lawsuit, filed on behalf of tenants by a coalition of housing and legal advocacy groups, follows in the footsteps of a similar one last year-the well-known Milbank case (see here, here, and here), in which a judge ultimately ordered the servicer of the mortgage to start paying for repairs of the portfolio’s thousands of housing violations.

This most recent lawsuit was filed amidst rumors that New York Community Bank was gearing up to sell the mortgage to an unknown buyer, a sale that was reported March 11 in the Wall Street Journal.

“We’re not really very clear on exactly what might have happened,” said Shafaq Islam, a staff attorney with the Urban Justice Center, one of the groups working with tenants in the case. Even if there was a sale, he said, the lawsuit will continue, be it against New York Community Bank or whatever potential owner may take over.

“If there’s a new owner in town, we’d have to substitute the new owner,” he said. “But ultimately what we are seeking in the lawsuit is that the receiver makes the repairs, and the owners of the mortgage, the plaintiff, pay the receiver for the repairs.”

Calls to a spokeswoman at New York Community Bank inquiring about the possible sale were not yet returned.

Tenants and organizers say their next step is to make sure the new owner has the adequate resources to handle a portfolio of properties laden with debt and in need of expensive repairs.

Advocates had been appealing to the bank to sell the mortgage to an affordable housing group called the Mutual Housing Association of New York, which bid on the properties but was rejected by New York Community Bank, according to the Wall Street Journal, in lieu of a higher offer.

“We really need someone that cares about the building,” said Riley. “Not just someone that has the money.”