Dorchester?s Hendry Street center of Hub?s mortgage crisis

[briv]

From Todays Herald:

Foreclosure ground zero
Dorchester?s Hendry Street center of Hub?s mortgage crisis
By Laura Crimaldi / Special Report | Sunday, February 10, 2008 | http://www.bostonherald.com | Local Coverage

Photo by Patrick Whittemore


Shock waves from the mortgage foreclosure crisis rocking the global economy are sending tremors through a depressed section of Dorchester that has been turned into a blighted urban ghost town as a result of foreclosures, shady real estate deals and abandonment.
The epicenter is Hendry Street on Meeting House Hill, where a shot at urban renewal in an area historically ravaged by drugs and crime was dashed by a spate of foreclosures that left seven homes boarded up or empty. Those shuttered triple-deckers, including two condemned last year by the city, face the corners of Coleman and Clarkson streets, where six more properties stand boarded up due to abandonment or foreclosure.
?It really is devastating,? said Jeanne DuBois, executive director of the Dorchester Bay Economic Development Corp. ?We feel a huge amount of urgency.?
Overall, 33 percent of the city?s 703 foreclosures hit Dorchester last year. Roxbury has the second-highest concentration with 18 percent of the foreclosures in 2007, city records show.
Those shutterings represent the curb-level fallout of a global financial slump many experts say was driven by greed, easy money and inept or corrupt oversight by the mortgage and banking industries.
Activists, police, public officials and urban affairs experts agree that rundown vacant buildings are leading indicators for the violence and dysfunction that can spread like wildfire from one urban zone to the next in a bad economy.
?There was a lot of bad lending, a lot of bad decisions made and we?re now seeing the results,? said Thomas Callahan, executive director of the Massachusetts Affordable Housing Alliance.
City and county property records show that the bottom started falling out on Hendry Street in December 2005 when a triple-decker that had been bought for $355,000 three years before with a $10,000 down payment was foreclosed.
Within 21 months, another six properties were facing foreclosure, including three triple-deckers that records show were purchased with 100 percent financing that ranged from $446,500 to $550,000.
?This is obviously a tight geographic neighborhood that has suffered the impacts of lots of bad lending, and not just subprime. There looks like there is investor fraud,? said Bill Cotter, deputy director of homebuyer services at the Department of Neighborhood Development. Cotter said the city has helped a dozen homeowners in that neighborhood avoid the foreclosure proceedings that hit 703 homes in Boston last year. Citywide there are 127 abandoned properties, according to records.
But the blight is spreading in a neighborhood repeatedly victimized by housing freefalls. In August, the city condemned 19-21 Hendry St. after inspectors and police found evidence of squatters, health and safety violations, handguns, drugs, human waste, flammable liquids and debris on the premises during a May inspection.
One of the tenants, Keith Gray, 31, said he lived in a car for five months after the city declared the property unfit for human habitation. On Oct. 31, Victor Figueroa, 32, was shot in the leg and arm outside 21 Hendry St. He survived.
On Nov. 29, a Boston police SWAT team descended on 19 Hendry St. after receiving information that a suspect who shot two teens on Cameron Street might be there. Law enforcement found the house empty, a police report said.
Boston police Superintendent in Chief Robert Dunford said a Safe Street Team and the city?s violence intervention program have been implemented there.
?It does hurt the neighborhood because Bowdoin Street, that whole Bowdoin Street-Geneva Avenue area has worked very hard to stabilize itself and bring it back,? he said. ?It?s kind of a step back and the city is working hard to try to resolve some of the issues.?
For community organizer Lew Finfer the situation harkens to 1974, when hundreds of homes in Meeting House Hill and Fields Corner were lost to demolition or fire in another housing downturn.
?That many subprime loans in one area is a form of redlining,? said Finfer, who still has a poster that activists designed during the 1970s to warn against the dangers of abandoned buildings. ?It?s a self-fulfilling prophecy.?
Article URL: http://www.bostonherald.com/news/regional/general/view.bg?articleid=1072491

 

[briv]

From the Globe this time:

GLOBE EDITORIAL
A foreclosure virus spreads

February 15, 2008
THE MOST powerful agencies in city government descended on Hendry Street in Dorchester yesterday hoping to contain a virus of foreclosures. But by the time the mayor, police commissioner, and housing inspectors had arrived, it appeared that urban rigor mortis had already set in.
About a dozen properties in foreclosure line Hendry, Coleman, and Clarkson streets in a low-income neighborhood that the Menino administration has targeted for public safety, recreation, and economic development improvements over the past five years. Standing outside a boarded-up three-decker at 17 Hendry St. - one in a long string of abutting properties in the same straits - Mayor Menino vowed that he would restore value to the neighborhood, even if it required the city to redevelop the properties itself. But such a strategy can work only if the city can seize a property for tax delinquency. Most of the blighted houses in the Hendry Street area, however, don't owe back taxes. Redeeming these properties requires a more aggressive approach.
Menino often saturates a high-crime area with massive resources. Sometimes, the troops withdraw not long after the departure of the TV crews. But there are signs that the mayor is deadly serious about his new "foreclosure intervention team." William Sinnott, the city's chief attorney, is investigating whether state banking officials could freeze the assets or strip the licenses of mortgage lenders who snub efforts to bring the properties up to code or resist putting them back on the market quickly. City officials also hope to work more closely with the state attorney general to uncover if investor fraud or other criminal activity might be at play.
More than 700 properties in Boston fell into foreclosure last year, mostly products of a subprime mortgage market that lured financially unstable buyers with low introductory rates. Unfortunately, the time has passed for debating whether venal mortgage brokers or gullible buyers are to blame. City officials expect about 2,000 homeowners to face sharp increases in the cost of their subprime mortgages between now and the end of next year. That creates the potential for many more Hendry Streets to come.
City officials say they are getting decent cooperation from major mortgage servicers in the area, such as Wells Fargo. But they also say they are struggling to make contact with their subsidiaries, such as the Iowa-based America's Servicing Co. It will require much persistence to peel back this smelly onion.

Sloppy mortgage programs in the 1960s also led to a rash of foreclosures in Dorchester. City government looked away. It took decades to restore the properties and redeem the neighborhoods. Menino, at least, knows this history and understands how a repeat could ruin his city and his legacy.

 

[Suffolk 83]

my friend is in construction in Dot and said he boarded up some of these houses. Says there's people sleeping and living under abandoned porches and in sheds. Said there was one cool guy that still lived there with three boats in his yard... I said wouldn't they get stolen? and my friend says its safer now that there's nobody there now. All the porch monkeys gone now...<his words not mine.He says he's boarding up houses all the time in Dot.

 

[Lrfox]

All the porch monkeys gone now...<his words not mine.

"It's cool, I'm bringing it back"

 

[statler]

^^ Damnit! I was going to make that joke!

 

[bosdevelopment]

These don't get the attention or receivership motions like the Alexandra do they Ron

 

[Ron Newman]

I don't quite understand what you mean. This street is getting a lot of press attention at the moment, which I hope will be followed by some kind of governmental action.

 

[bosdevelopment]

I don't quite understand what you mean. This street is getting a lot of press attention at the moment, which I hope will be followed by some kind of governmental action.

Court action against the Alexandra hotel owner had little to do with the actual state the hotel was in and everything to do with where the hotel was located. (read between the lines)

 

[AC]

http://www.cityofboston.gov/news/default.aspx?id=3798

Mayor Announces Foreclosure Intervention Team, Targets Hendry Street Area


2/14/2008 - Released by Mayor's Office
For more information contact press office




Mayor Announces Foreclosure Intervention Team, Targets Hendry Street Area

Alongside Cabinet members, outreach workers and clean up crews who gathered on Hendry Street in Dorchester today, Mayor Thomas M. Menino announced the creation of FIT, the City?s Foreclosure Intervention Team. With at least 12 foreclosed homes and several others boarded up, abandoned and petitioned for foreclosure, the Hendry, Coleman and Clarkson street area was the focus of the first FIT project. Along with the large clean up effort by City agencies, Mayor Menino announced future plans for saving many of the properties.



?The City will not stand by and watch this neighborhood fall into such disrepair. My new team will work here and other neighborhoods to stop problems before they reach this level,? Mayor Menino said. ?The City alone cannot solve the overwhelming problem of foreclosure, but we will continue to work to make our neighborhoods safe for residents.?

FIT is compiled of the many City agencies who deal with all issues that surround foreclosure and abandonment, including Boston Police, Inspectional Services, Department of Neighborhood Development, Public Health Commission, Corporation Counsel, Public Works and Public Property. The City has surveyed the abandoned properties on Hendry, Coleman, and Clarkson streets, and determined a number of important steps that will be made immediately in order to make this neighborhood safer and more desirable. City agencies are working to identify the owners of these properties in order to hold them accountable and to get moving on future renovations and sales. This kind of deterioration of our neighborhoods is simply unacceptable.

A number of immediate steps have been taken to deal with foreclosures and abandonment in this area:

?The City is moving rapidly to acquire at least 5 properties in this area where the owners have stopped paying taxes;

?The City has significantly increased public safety operations, making sure that each property is properly secure, posting ?No Trespassing? signs on all vacant buildings, removing gang-related graffiti, and increasing police surveillance in the neighborhood;

?The City is working on a redevelopment plan for this neighborhood putting these buildings back into Boston?s affordable housing stock.

The Bowdoin-Geneva neighborhood has benefited from more that $24 million in development in the last 5 years alone. The City will continue to invest in this neighborhood.

There are a number of immediate helpful resources available to residents, whether they are a homeowner or a renter. The City continues to prevent foreclosures through programs sponsored by the Boston Home Center and the Boston Rental Housing Resource Center. These agencies have helped hundreds of families find solutions to keep their homes. There is no shame in asking for help when it comes to your family?s largest investment.

Homeowners who are facing credit or financial problems, or need assistance with home repairs or related issues can get help by calling the Boston Home Center, at 617- 635-HOME (4663). For tenants living in a house that has already been or is in danger of being foreclosed on, the Rental Housing Resource Center can help. Please call 617-635-RENT (7368).

 

[Scott]

Ron took court action against the owner of the Alexandra?

Good for you Ron, the place is a friggin' fire trap.

 

[palindrome]

I would be more than happy to buy anyone of those houses providing the price is right. Maybe real estate prices will finally come down enough that i can afford to live in the city after college.

 

[briv]

Found this report by Carl Stevens on You Tube:

http://www.youtube.com/watch?v=OHvtl4O_Rc8&eurl=http://www.universalhub.com/?page=1

 

[Suffolk 83]

I know lots of people that owned triple deckers in dorchester and have made a fortune off them because they bought them at times like these, and sold them in late 90's. wait a little, and someone can make alot of money off of these.

 

[bosdevelopment]

Ron took court action against the owner of the Alexandra?

Good for you Ron, the place is a friggin' fire trap.

No it isn't and wasn't. All fire suppression systems were (and are) functioning as required by 527 C.M.R and G.L ch. 148. The receiver would have come in much earlier had the building been the "friggin' fire trap" you colorfully described it to be.

 

[Scott]

Dorchester Reporter Article

Multi-family prices continue to plummet

Foreclosure crisis offers bargains
March 6, 2008

By Pete Stidman
News Editor

Short-selling, foreclosure sales, a buyer's market and worse have continued downward pressure on housing sale prices in Dorchester through the fall and winter months, particularly in the multi-family market. Some are selling for a fraction of what they did just two or three years ago.

The more desirable neighborhoods - just about everything along the MBTA's Red Line are the least affected, say brokers, with other areas to the west - without subway connections in a virtual freefall.

"I wouldn't be surprised if it didn't hit bottom until the end of next year," said John Anderson, a local real estate broker and creator of The Real Estate Analyst website. "Three-families in Dorchester are down 35 percent from their peak, which is a lot."

Single families have come down 26 percent, added Anderson, while condos have been less affected.

"The west side and Mattapan has had some huge price drops," said Justin Green of Just In Boston Properties. "There's a house we listed at 30-32 Westmore Rd. for $459,000, we originally wanted to list it for $429,000 because of a house down the street that was the same 1920s-style two-family. It never sold. But the other house sold for $292,000 or $299,000, so that tells me they've had a tremendous drop."

According to MLS data obtained for the Reporter by Green, the average sale prices for multi-families in Dorchester peaked at around $531,000 in the second quarter of 2005, and have since fallen to just under $387,000 in the last quarter of 2007. So far in 2008, the average is a mere $319,895.

The reasons for the shrinking price tags are multiple. The most obvious factor is the sub-prime mortgage crisis, which made it more difficult to acquire financing for new buyers and produced scads of foreclosure auctions and short sales by owners looking for a way out of mortgages that can amount to more money than their properties are now worth.

Short selling occurs when owners facing foreclosure negotiate with their mortgage lender to sell their house for what they can get, give the proceeds to the lender and call it even.

One three-decker at 22 Lyon St. near Glover's Corner is currently listed for only $215,000, a likely example of a short sale. The current owner gutted the place with an eye toward rehabbing and perhaps selling it off as condos, according to realtors, but ran out of steam and money and is now facing foreclosure. In 2005, he paid $377,000 for the property.

A less examined reason for the sinking market could be a decrease in fraud brought about by increased media and governmental focus on the sub-prime lending crisis. Several properties previously detailed in the Reporter appear to have been sold under curious circumstances.

An example is a set of transactions that Anderson deems suspicious at 59 Armandine Street. The three-decker was purchased in November 2005 for $569,000 and converted into condos. Each of the three units sold for $270,000 by July 2006 to three separate buyers, according the Suffolk Registry of Deeds. Each buyer took out two mortgages, one for $216,000 and one for $54,000. All three units began foreclosure proceedings by February 2007 and all were foreclosed upon by October of the same year.

Anderson questions whether the three buyers actually intended to pay their mortgage, or if they existed only on paper. At the end of January, one buyer snapped up all three condos at 59 Armandine from the various banks for around $100,000 a piece. On the same day, the new owner sold the entire building to another buyer for $450,000, a rare example of a reverse condo conversion.

The latest round of predictions from local and national experts are beginning to point to the end of 2009 as a possible turnaround date in real estate prices and the sub-prime crisis, but no one seems to be holding their breath. The Federal Reserve Board estimates that well over 1,500 sub-prime adjustable rate mortgages have yet to hit their rate reset dates in Boston, with the majority hitting between now and October. As was true with last years 703 foreclosures citywide, Dorchester can expect to bear the worst of what is to come.

"The bottom line is things are going to get worse before the get better," said Department of Neighborhood Development spokesperson Lucy Warsh, who has been participating in the city's Foreclosure Intervention Team.

But according to a few of Dorchester's most prolific real estate brokers, it's all about the neighborhood. Places like Savin Hill, Jones Hill, and Ashmont are selling at lower prices, but they're still selling, and the standard condo conversion can still be found.

"Those areas have depreciated from their high, but they're still very pricey," said Eric Gould of At Home Realty. "We just sold a three-decker in Savin Hill over the bridge for $590,000 and that guy got it for a steal. Condos are still selling pretty briskly on the high end, but things are a bit worse where there is no T access. It's a little more difficult to get the high prices."

"In that location [Savin Hill over the bridge], condos go for the high twos or low threes, the numbers just work for developers over there," said Green.

Deals can be had in the hot spots, brokers said, but it's often the fruit of other's misfortunes. One condo near Ashmont - which sold for $309,000 three years ago and was foreclosed upon - is now under agreement for $210,000, said Gould.

"There has been bidding wars for this stuff," said Green. "You just got to spot it when it comes in."

 

[Scott]

The more desirable neighborhoods - just about everything along the MBTA's Red Line are the least affected, say brokers, with other areas to the west - without subway connections in a virtual freefall.

That is a very strong argument in favor of the Fairmont upgrade.

 

[briv]

From The Herald:

Blighted Hendry Street faces big $ deal
4 cos. vie for triple-decker deal
By Laura Crimaldi | Sunday, July 6, 2008

Photo by Matthew Healey


City officials plan to name a developer this month to renovate abandonded triple-deckers on Hendry Street, the epicenter of the Hub?s foreclosure crisis.

?We want to do it in July,? said Pat Canavan, housing adviser to Mayor Thomas M. Menino. ?This is an opportunity to get new people in that neighborhood who are going to care about the houses and create a new environment.?

Four developers are vying to renovate and market four Hendry Street triple-deckers that were purchased by the Boston Redevelopment Authority earlier this year from foreclosing lenders.

Menino formed a Foreclosure Intervention Team and set about bringing the Meeting House Hill neighborhood back from the brink in February after a Sunday Herald report exposed how the foreclosure crisis had ravaged the area.

In the running for the Hendry project are Dorchester Bay Economic Development Corp., Bilt-Rite Construction Inc. in Roxbury, Caledonia Construction in Milton and Fairfield Real Estate Development Corp. in Roxbury, said Lucy Warsh of the Department of Neighborhood Development.
?We have spent 30 years working with local neighborhood civic groups and community policing. We know a lot about crime fighting. Here is a serious problem and it has been for a long time,? said Jeanne DuBois, Dorchester Bay?s executive director. The agency hopes to pump $1.7 million into the neighborhood and resell the triple-deckers to owner-occupied landlords for $275,000 each.

The other developers did not return messages seeking comment. According to Warsh, their proposals all call for selling the renovated units to an owner-occupant, which is the city?s preference.

Despite the city?s intervention on Hendry Street, the months of blight are taking a toll. Recently the city had to replant and repair new trees that were damaged by vandals, Canavan said.

Street workers have been dispatched to do outreach work among unemployed people who call the neighborhood home. ?To make that street we?re going to have to focus on everthing and every person,? Canavan said.

Article URL: http://www.bostonherald.com/news/regional/general/view.bg?articleid=1105203