Neena Satija Photo
Margaret Holmes’s porch stands at a steep incline.
Janet Dawson and Michael Steinbach have found another way to keep their poverty rental empire going — put properties under a new corporate name, snag another $1.3 million in loans, continue collecting rents, and don’t make any apparent improvements.
Land transactions recorded in the month of October show that various entities created by the couple — including “Handsome Ben LLC,” “EZ Mortgage LLC,” “Mz Maggie LLC” and “Jessie Bear LLC” — sold 23 properties for an alleged total of $1.7 million to a newly-created LLC called “Sun Escape.” (A 24th property was sold to Sun by Michael Steinbach’s brother, David Steinbach, to Sun Escape. Janet Dawson had previously quit-claimed the property to him.)
It’s not clear if any money actually changed hands, though. Tenants at several of the properties said Tuesday they had no idea of the sales and that they’re still paying rent to Diamond Properties Management LLC — the name under which Dawson and Steinbach do most of their official business with their tenants.
And “Sun Escape LLC” is registered to Roger H. Dawson, whose address in the White Pages is the same as Janet Dawson’s and Michael Steinbach’s. (The company may be aptly-named, given that it’s registered in Fort Lauderdale, Forida, and the three live there now.)
Steinbach and Dawson have failed to return repeated requests for comment for this and previous stories. They own hundreds of local properties, many housing federally subsidized tenants. They have stiffed many of their lenders, and city inspectors consider them among New Haven’s worst slumlords. (Click here and here to sample previous stories.)
But, often with the help of governmental-rental subsidies, the couple continues to rake in the cash.
So reports the paper trail of the couple’s flurry of October “sales.”
About ten days after Sun Escape bought the 24 houses, it reported taking out new mortgages on all of them. In total, it borrowed about $1.4 million against the houses, all in the form of 12-month loans at 13 percent interest.
In similar transactions in the past, some landlords have created paper “flip” sales of properties to themselves in order to obtain inflated new mortgages from banks or mortgage companies.
Larry Dressler, a New Haven attorney specializing in real estate, said he believes that “today they could never get away with that. It’s obvious they’re [Dawson and Steinbach] dealing with hard-money people now [as in individual lenders, rather than big banks].”
That $1.4 million all came from three lenders — two individuals named Luz Taylor and Natasha Cuyar Llenca, and a company called Auburn Loan Servicing based in Maine. In the mortgage documents, Taylor and Llenca’s addresses as listed as post office boxes in Tamarac, Florida, and Fort Lauderdale, Florida, respectively.
“These are clearly not lenders,” said James Paley, head of Neighborhood Housing Services an one of the city’s most active and successful redevelopers of homes in low-income neighborhoods. “These are investors.” In other words, he said, Steinbach and Dawson approached their lenders with an investment opportunity that would have a 13 percent return within one year, and it would be secured by these properties.
“Here in New Haven, Dawson and Steinbach’s name is about as close to mud as you can get,” he said. “But who knows what kind of relationships they’ve forged in other communities and who they’ve been able to get as investors? It’s a pure profit play.”
Who Is Natasha?
A “Natasha Sofia Cuyar Llenca” has signed and filed documents on behalf of Diamond Properties Management in response to complaints against the company by former employees. On those documents, her address is listed as 415 Coral Way, Fort Lauderdale, FL — the same as that of Roger Dawson, Janet Dawson, and Michael Steinbach.
A Google search for that name, though, returned no hits. “Natasha Sofia Cuyar” from Fort Lauderdale posted her resume and phone number on a job-seeking web site. Reached on Tuesday and asked about her property dealings in New Haven, she said “Can you call me back in an hour? I’m on the highway and I should have reached my destination by then.” She did not respond to subsequent phone calls.
According to her post online, Cuyar is looking for “an administrative position” and was unemployed as of June. According to New Haven land records, Natasha Cuyar Llenca lent Sun Escape LLC more than $300,000.
Auburn Loan Servicing, Inc. lent Sun Escape about $331,000. Asked about the nature of their business, receptionist Lorraine Davis said, “There’s really not too much to tell. We serve the mortgages for the lenders… we take the money and ship it off to the lenders.” She declined to comment on what type of clients the company works with, saying, “Everything we do is confidential.” She said the company “doesn’t do a lot of business in New Haven, per se.”
Many of the properties follow a similar pattern: Banks took them back from previous owners during the foreclosure crisis in 2007 and 2008, and then Steinbach or Dawson snapped them up at bargain prices. Some were once in the hands of another landlord targeted by city inspectors, Anthony Perrotti.
Dawson and Steinbach then took out mortgages on the properties at a value much higher than they bought them for. For instance, Dawson bought 57 Orchard S. (pictured) for $70,000 from U.S. Bank in November 2008 and took out a mortgage soon afterward for $153,900 from a company called Linda Funding LLC, which is based in Sherman.
The couple starting “selling” off the properties to Sun Escape LLC this August, after which Sun Escape took out mortgages on them as well. Those mortgages were usually at a much lower value; in the case of 57 Orchard, Sun Escape was able to borrow $68,000 from Natasha Cuyar Llenca.
A Loan? For Real?
Tenants at the properties were mystified to learn that anyone would lend money against houses in the conditions they’ve been dealing with.
Nieves stands on her back porch; the white stains on the floor come from water damage because of the leaky roof.
“They don’t take care of the house,” said Norma Nieves, who lives on the 2nd floor of 57 Orchard with three others, including two young children. When it rains, water leaks into her bathroom and onto her back porch, she said. Sometimes, the electricity goes out without warning. But no matter how many times she’s called Diamond Properties Management, “no one ever comes by.”
Michelle Montgomery, who lives on the first floor of the house, said her windows are defective and she has to deal with mice and roaches. In the past couple of months, she’s seen maintenance staff do some “outside work” on the house by trimming the grass and fixing the door of an unattached garage, but they’ve done nothing inside the property.
“This was the very first time I rented from them, and it’ll be the very last,” she said.
At 674 Orchard, tenant Margaret Holmes told a similar story. She said her rent is paid largely by Shelter Plus, a rental assistance program for the disabled, and that the house has failed its last two health inspections. That means she has to move out as soon as she finds a new place.
Rodents were entering Holmes’ apartment through this opening; this is how it was patched up.
“When I first moved here, I was without heat for three weeks. They brought me these raggedy old heaters…there’s really nothing being fixed in this house,” she said. Holmes lives at the property with four boys, all of whom have chronic asthma, she said.
Angela Sweat, who lives on the second floor of 680 Dixwell Ave., said her children also have asthma and they’ve had to deal with mold in the apartment for years. “They don’t remove it,” she said of her landlord’s way of dealing with the problem. “They just cover it up.”
Sweat said that a church used to occupy the first floor of the building, but left recently because conditions were so bad. “While they were giving their sermons, roaches would be crawling all over everybody,” she said.
While Section 8 inspectors know Steinbach and Dawson well, the program can’t tell tenants where or where not to rent. All they can do is refuse to pay rents for properties that fail their health inspections and require tenants to move out, as they’re doing with Holmes at 674 Orchard.
Michael Steinbach’s brother David was reached by phone Tuesday. (David Steinbach had quit-claimed 85 Pardee St. for a dollar from Janet Dawson in 2009, then sold it to Sun Escape this October for $65,000). He said at first that he doesn’t do any business with Michael. Reminded of the October transaction, he said, “I did sell some properties to Sun Escape.” Asked about how he ended up being part of that group of transactions, he said he’s “just trying to get consolidated on properties in New Haven.” Asked to elaborate, he said, he’s “just trying to get down to a manageable number of properties myself.”
When pressed about the nature of Sun Escape, he answered, “I don’t really want to talk about this now. That’s all I can tell you. Have a nice day,” he added, then hung up.
Related Stories:
• Slumlords Unload 9 Properties
• Ceiling Fell. Baby Died. Slumlords Paid Nothing
• Slumlords Stiff Banks — & Rake In Sec. 8 Bucks
• One family moves in, another forced out
• Showpiece House Rises Next To Problem House
Sounds like the Attorney General needs to get involved.
The actions of these slumlords are having a major negative impact on hundreds of residents, and will lead to millions of dollars in future economic and health care costs.