New Haven Independent

Henry bid $143,000 on 302 Greenwich Ave at a foreclosure sale on a brilliantly bright Saturday morning. The mortgage-holder, however, boxed her out with a starting bid of $246,000.

It was one of a half-dozen similar sad events in the city this weekend, as the foreclosure crisis cascades across New Haven.

Henry’s bid had already been rejected in court on Friday as far too low, even though the owner’s realtor, North Atlantic Realty, was listing the modest three-family home at $169,000.

Still, she came by to see the court-appointed “committee,” attorney Jonathan Einhorn, a former alderman and sometime mayoral aspirant, conduct the legal proceedings on site.

Considering that this was the fourth house that Henry, a purchasing agent for a woodworking firm in Danbury, has made offers on since February, each time without success, she was in a remarkably positive mood.

In this instance, foreclosure had commenced against the owner Harry Faber who had bought the 100-year old, three-family house (“requires some TLC,” says the ad), in 2006 from John Steinam. He paid $230,000 for it, which he financed with a first mortgage of $207,000 from a company called New Century Mortgage. Faber was able to finance the house through a second, $23,000 mortgage.

He figured the rents would take care of things. He figured wrong.

Slipping Behind

Henry, who is new to the area, owns a house in Florida and knows something of the ways of finance. She had researched on her own what happened. “I talked to Mr. Faber,” she said, and he could have paid the monthly mortgage premium of about $2300, because the three rents, on the three floors, were $1100, $750, and $650, approximately. He would have about broken even.”

Problem was that two of the three tenants fell behind on their rent. There wasn’t enough rental income and he fell behind on the payments.

Almost as soon as the loan was taken out in November 2006, it was assigned from New Century to U.S. National Bank, care of an entity called GMAC Mortgage Company of Horsham, Pennsylvania. By August of 2007, the owner was in serious enough default, that U.S. National initiated a foreclosure action.

It’s been for sale ever since. The house has proved to be a tough sell, however: The appraisal dropped in value from $245,00 in September 2007 to approximately $180,000. And the owner’s $230,000 was growing due to interest. Buyers making offers were few and far between - in fact, apparently, there were none.

“It’s almost always this way,” Einhorn said, “that the bank buys it back with an opening bid no one else can compete with. Then they get someone in and try to fix it up and sell it.”

“Who Benefits If The Place Is Boarded Up?”

“But that’s really not fair, and it doesn’t work for the city either” countered Tanaya Henry. “I mean it is fair, of course, that the bank wants its money back, everyone wants their money back, but look at that drop in appraised value! If the bank takes the tenant out, as they usually do, the house is going to sit vacant.

“When that happens, vandals come, and then the next thing you know the copper plumbing fixtures are taken. This has happened to houses I’ve been interested in before. Since I would finance my purchase with an FHA loan, I can’t get their approval if there’s no plumbing. That would all have to be fixed first. And that window there even,” she said, pointing to a broken pane on the porch of 302 Greenwich, “that too would have to be fixed. So who benefits if the place is boarded up?”

Attorney Einhorn tended to agree. “Can’t LCI (Livable Cities Initiative) or another group,” he suggested, “help you with a loan?”

“There are programs,” she said, “but many have run out of money themselves for their programs. Also, lots of them are for first-time homebuyers, and I own a home in Orlando, so I don’t qualify.”

“No,” said Einhorn, “I think LCI and others should talk to the banks so the banks will listen to offers of people like you.”

“That’s exactly it,” said Henry, who recently moved up to Ansonia, where she lives with her mother Shelley (pictured) and her son Jacob. They very much want to live in New Haven, in no small part because of the schools.

Specifically because Jacob, a talented 12-year-old musician wants to go to the new Cooperative Arts and Humanities High School. “I’ve bid on a house on Truman Street, one on Winchester, one on Vernon too.” She estimated she’s made at least four offers on foreclosure sales or “short sales,” which is when the bank and the owner decide on an amount together for which they agree to sell and cut their losses.

“I’m learning by doing this,” Henry said, “and I can tell you that even though my bids are sometimes not far off, the banks won’t sell. They just want their money. In the meantime, the houses go empty and uncared for. On Winchester, for example, that house, when the bank took it over, there’s somebody squatting in there at night. In another house there were feces on one of the floors. In another the septic broke, and some people are continuing to live there. I’m not going to be able to get FHA approval for a place like that.”

An FHA mortgage, which charges about 3 percent, compared to 7 to 10 percent for a commercial one, requires a place be livable with all basic services.

As this conversation, friendly enough considering the circumstances, continued, the second floor tenants walked by and entered. There was no eye contact between them and Einhorn, the Henry family, and others who gathered in front for what was, after all, a formal proceeding.

“I talked to them,” Henry said, referring to the tenants, the other day, “and they’ve continued to live here through three or four owners. They’ve seen this before.”

Henry devotes lots of Saturdays to hunting for a house she can fix up and raise her son in. She really wants to move to New Haven. It appears the city would benefit to have a person such as her among us. “But believe me,” she said, “with the foreclosures and so on, when you hear people say it’s a buyer’s market, it really isn’t. The banks just want their money.”

What’s next for Tanaya Henry and her family? Quite simply two more houses she’s interested in, one on Peck Street and the other on Beers, next weekend.

Read previous Independent coverage of New Haven’s foreclosure crisis:

• DeStefano: Foreclosure Plan Ready
• Can They Help?
• “We Should Over-Regulate These Bastards”
• Rosa Hears of Rescues
• WPCA Grilled on Foreclosures
• WPCA’s Targets Struggle To Dig Out
• Sue The Subprimers?
• WPCA Hearing Delayed
• Megna’s “Blood Boils” at WPCA Tactics
• Goldfield Wants WPCA Answers
• 2 Days, 8 Foreclosure Suits
• WPCA Goes On Foreclosure Binge
• A Guru Weighs In
• WPCA Targets Church
• Subprime Mess Targeted
• Renters Caught In Foreclosure King’s Fall
• She’s One Of 1,150 In The Foreclosure Mill
• Foreclosures Threaten Perrotti’s Empire
•“I’m Not Going To Lay Down And Let Them Take My House”

The following links are to various materials and brochures designed to help homeowners avoid foreclosure.

How to prepare a complaint to the Department of Banking; Department of Banking Online Assistance Form; Connecticut Department of Banking, Avoiding Foreclosure; FDIC Consumer News; Statewide Legal Services of Connecticut, Inc; Connecticut Bar Association Lawyer Referral Service.

For lawyer referral services in New Haven, call 562-5750 or visit this website. For the Department of Social Services (DSS) Eviction Foreclosure Prevention Program (EFPP), call 211 to see which community-based organization in the state serves your town.

Click here for information on foreclosure prevention efforts from Empower New Haven.

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