Boymelgreen’s bank at risk of seizure, could mark first NY bank failure since crisis began

The LibertyPointe Bank,
whose chairman is troubled developer Shaya Boymelgreen, is in danger of
being seized by regulators after failing to raise the $25 million
ordered by the Federal Deposit Insurance Corporation. After issuing the
New York-based bank a cease and desist order
in July, reports showed that the bank’s total risk-based capital ratio
was only 3.7 percent as of Sept. 30, well below the minimum threshold
of 8 percent for an “adequately capitalized” bank. On Oct. 20, the FDIC
decided to give the bank 30 days to raise additional capital. However,
the bank failed to raise the cash by the deadline and chief executive
Meron Corn said it is “unclear what will happen next.” The failure of
LibertyPointe Bank would be added to the list of difficulties recently encountered by Boymelgreen, who is also dealing with stalled downtown office building conversions and various lawsuits
from lenders and creditors. Also, if LibertyPointe Bank goes under, it
would be the first failure of a New York bank since the financial
crisis started two years ago. [Crain's]

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Times Square office buildings struggling

Times Square office buildings, which saw tremendous growth before the real estate bust, are now struggling to maintain their clientele as companies flock to take advantage of steep rent discounts in more traditional — and less congested — Midtown locations further east. Besides its crowd control problem, Times Square buildings suffer from the wrong layout for this new real estate era, said David Goldstein, a tenant broker and executive vice president and director at Studley. “The area’s biggest envelopes are raw space, where major build-outs are required. That’s a tough sell these days, with so much prebuilt space on the market at [relatively] low prices,” Goldstein said. Meanwhile, the 1.1 million square feet at speculative office tower 11 Times Square, which is slated for completion early next year, is still tenant-less. It may join the ranks of the former New York Times building at 229 West 43rd Street, whose 767,000 square feet is also currently vacant. [Crain's]

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Concerns abound over FHA overextension

As the Federal Housing Administration plays an increasingly central role in home loans — approximately half of new home loans are insured by the group — some industry experts are growing concerned that FHA is ill-equipped to handle the burden. Currently 5.5 million homes are insured under FHA, with 8.5 percent of those 90 days delinquent or in foreclosure. CBS via the Mess that Greenspan Made reported that the FHA has just 172 staff members to review applications and potential lenders. This, coupled with the massive number of loans FHA insures, has many industry experts concerned over its longevity.

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Treasury Department announces permanent mod plan

The Treasury Department and Department of Housing and Urban Development has announced a plan to help borrowers convert to permanent loan modifications. As expected, the announcement emphasized the importance of ushering borrowers currently in trial modifications into permanent modifications. Phyllis Caldwell, chief of the Treasury Department’s Homeownership Preservation Office, said in a press release that with the success of the trial modification program, agency officials will aim to augment the permanent modification plans. “We now must refocus our efforts on the conversion phase to ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones,” Caldwell said. The plan would involve applying more pressure on banks to convert trial modifications into permanent ones. It’s a task that has proved tricky — while over 650,000 borrowers have qualified for trial modifications under the Treasury’s program Making Home Affordable only 375,000 of those are expected to transition to permanent modifications by the end of 2009. The Treasury plans to disclose how many permanent modifications each bank implements, according to Michael Barr, assistant secretary for financial institutions, a move intended to call out those banks that aren’t performing adequately. “We’re going to be quite focused and direct on particular institutions that are not doing a good job,” Barr said. “Some firms ought to be embarrassed, and they will be.” TRD

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West Village rezoning proposal threatens Blaichman’s Perry Street hotel project

The City Planning Commission is planning a proposal for an area within the Greenwich Village Historic District that would limit the height of any new construction and do away with a development bonus currently offered for commercial projects there, the city said last week. Last year, developer Charles Blaichman submitted plans for a new seven-and-a-half-story hotel at the corner of Perry and Washington streets, and the Landmarks Preservation Commission gave him the go-ahead. If City Planning’s rezoning is passed before Blaichman breaks ground — via a review and hearing by Community Board 2 and final approval by the City Council — his hotel will have to be scrapped. As it stands, the six-block section, between Greenwich and Washington streets and West 10th and 12th streets, is a C6-1 zone, which means there is no height limit for new projects. The Commission’s plan to change the area to a C1-6A district will be welcomed by the Greenwich Village Society of Historic Preservation and by Community Board 2. Both groups have lobbied for stricter zoning regulations like the one proposed. [The Villager]

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China’s largest contractor tapped for $100M Manhattan subway project

A subsidiary of China’s largest contracting company has just inked a deal to complete a $100 million Manhattan subway ventilation project, according to China Daily. The project is the third U.S. infrastructure assignment that the company has been assigned this year. China State Construction Engineering has been aggressively pursuing the U.S. infrastructure market, according to Li Zhirui, an analyst with First Capital Securities, and is finding lucrative development opportunities. “The new project… signals China State Construction’s ambition to tap the American construction market,” Zhirui said.

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Dubai’s high-profile NYC properties could be sold off amid debt crisis

From left: Jumeirah Essex House, the Mandarin Oriental hotel, the Knickerbocker Hotel

The news of Dubai’s debt crisis, which has put already-teetering global commercial real estate markets on edge, stands to shake up New York City real estate as the state unloads its noncore assets in attempts to raise cash and pay off creditors. Dubai World, the government-controlled holding company, which last week announced that it would seek to delay payments on $59 billion worth of debt, owns iconic city properties like the Jumeirah Essex House, the New York W, the Mandarin Oriental hotels and the Knickerbocker Hotel. Deloitte, the accounting firm hired by Dubai World to restructure its liabilities, plans to ready a list of valuable, non-strategic assets that can be sold off quickly, the Post reported. Sources said high-profile hotels like the New York W and the Oriental would be likely to top such a list. [Post]

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Sales launch at Harlem development seeking FHA financing

The Douglass at 2110 Frederick Douglass Boulevard

New condominium the Douglass, at 2110 Frederick Douglass Boulevard at the corner of 114th Street in Harlem, has launched sales today. The 38-unit development includes one-, two- and three-bedroom apartments, ranging from 762-square-feet to 1,355-square-feet, according to a press release. While regulations mandate that new developments must be 50 percent pre-sold before qualifying for Federal Housing Administration financing, which offers qualified buyers more than 95 percent financing through mortgages insured by the federal government, the developer at the Douglass, BRP Companies, and its marketing firm, Halstead Property Development Marketing, plans to make the cut. The homes have asking prices ranging from $529,000 to $969,000. TRD

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Are the somewhat positive signs in the residential market recently a false mirage?

The Real Deal is looking for your feedback on market-related issues. Click here for a story on recent rental market figures. Please comment below and if you have questions you’d like posted, please e-mail news@therealdeal.com.

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Manhattan rental market showing signs of stability, report shows

While year-over-year rental prices have continued to lag, figures month-over-month have remained relatively stable, according to the November monthly Manhattan rental market report released today by TDG/The Real Estate Group NY (see the full report after the jump).

Rents dropped just .03 percent this November, compared to the month before. This figure is cause for some optimism, according to the report, because a more dramatic seasonal decline is typically seen during the month.

Daniel Baum, CEO of TDG/TREGNY, said that November’s strong showing was unexpected.

“We were actually somewhat surprised to see that November [prices] were [so stable],” Baum said. He attributed the unseasonally strong numbers to a delay in spring Wall Street hirings. Many Manhattan employers have actually begun taking on new hires this fall, according to Baum, which has created an uptick in demand.

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HVCC, still stymieing deals, may be sunsetted

From left: Michael Vargas, a principal with Vanderbilt Appraisal Company, Kathryn Higgins, an associate broker with DJK Residential, and Melissa Cohn, president of Manhattan Mortgage

Late last month, Rep. Gary Miller offered an amendment to the House
Financial Services Committee’s “Consumer Financial Protection Act of
2009.” Miller’s amendment — which passed the committee but has yet to
be voted on by the House — stipulated that the Home Valuation Code of
Conduct would ultimately be sunsetted. According to one of the California congressman’s aides, Miller’s
amendment to the House Financial Services Committee’s act will likely
be bundled into a larger financial regulatory reform bill, and
Democrats hope to bring the bill to a vote in Congress sometime next
month. For many New York City-based appraisers and brokers, the end of HVCC cannot come quickly enough. HVCC, which went into effect May 1, requires that a third party with no
stake in a sale select appraisers. The code was designed to promote
appraiser independence and stop appraisers from inflating the value of
a property when it comes to mortgages backed by Fannie Mae and Freddie
Mac. Loan officers, mortgage brokers and agents are not allowed to
select appraisers under HVCC. “I think there are some good elements in the code,” Michael Vargas, a
principal with Vanderbilt Appraisal Company, said. “What was important
to get out there is that applying undue influence on an appraiser is
inappropriate. Promoting appraiser independence is very important.”

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With new subway, massive eyesores

Renderings of the utility structure planned for outside the 96th Street station of the under-construction Second Avenue subway

From the December issue: Those sticky summers languishing on the platform will be obsolete for future riders of the Second Avenue subway. Unlike most city subway stations, where air is sucked through sidewalk grates by passing trains, the new stations will be chilled by a modern ventilation system.

But much to the dismay of some Upper East Siders, that ventilation system will be housed in permanent aboveground utility structures situated at each end of the stations, many as large as midsize apartment buildings, rising up to nine stories tall.

As part of its first phase of Second Avenue subway construction, the Metropolitan Transportation Authority is planning eight of these structures along a 34-block stretch of the Upper East Side.

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South Jamaica’s foreclosure crisis brings scam artists, squatters

The foreclosure crisis has nearly devastated South Jamaica, Queens. The neighborhood has seen 27 additional foreclosures since June 2008, when the Daily News counted 98 homes at some stage of the process. On the single 145th Street block between Linden Boulevard and 115th Avenue, 15 homes are currently in foreclosure. The crisis is inviting squatters and short sales, while depressing home values to, in some cases, less than half of their peak values. Speculators are running rampant there, and preying on distressed homeowners. Many have used straw buyers to drive up the price of a home before either abandoning them or reselling it, the Daily News reported. Some South Jamaica tenants, meanwhile, have stopped making rental payments and are simply biding their time before eviction. [NYDN] and [NYDN]

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Obama expected to announce plan to make more loan modifications permanent today

Obama’s loan modification plan, which has so far granted permanent mortgage payment adjustments to only a small fraction of those who received temporary relief, may soon get a boost. The administration is expected to announce a new initiative today that will help make more of that aid a long-term fix for troubled borrowers. The new additions to the $75 billion plan, which launched in April, include partnerships with organizations to offer homeowners assistance and a push for more transparency from loan servicers. In an effort to stave off rising foreclosures and to get more temporary modification recipients into permanent plans, the administration also recently loosened its requirements for documentation, which some said were hindering the process. [CNN Money]

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Obama expected to announce plan to make more loan modifications permanent today

Obama’s loan modification plan, which has so far granted permanent mortgage payment adjustments to only a small fraction of those who received temporary relief, may soon get a boost. The administration is expected to announce a new initiative today that will help make more of that aid a long-term fix for troubled borrowers. The new additions to the $75 billion plan, which launched in April, include partnerships with organizations to offer homeowners assistance and a push for more transparency from loan servicers. In an effort to stave off rising foreclosures and to get more temporary modification recipients into permanent plans, the administration also recently loosened its requirements for documentation, which some said were hindering the process. [CNN Money]

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Paterson expected to sign new foreclosure protection legislation

New York is cracking down on mortgage fraud and beefing up foreclosure protections for homeowners and renters with a set of newly passed state mortgage laws. A bill passed last month by the State Legislature, now awaiting Governor David Paterson’s expected signature, says renters in foreclosed properties can no longer be evicted before being given 90 days’ notice, or, if it is longer, until the end of their lease. Before the new legislation, renters could be forced out after just 48 hours. And, to fight back against the spate of apartment buildings left in disrepair after foreclosure, lenders will now be responsible for keeping occupied buildings in decent shape. The legislation also expands the state’s loan modification program, which previously included only subprime borrowers, and prevents “distressed property consultants” from accepting the upfront fees that have contributed to scams in the past. [NYDN]

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New state foreclosure protections passed

New York is cracking down on mortgage fraud and beefing up foreclosure protections for homeowners and renters with a set of newly passed state mortgage laws. A bill passed last month by the State Legislature, now awaiting Governor David Paterson’s expected signature, says renters in foreclosed properties can no longer be evicted before being given 90 days’ notice, or, if it is longer, until the end of their lease. Before the new legislation, renters could be forced out after just 48 hours. And, to fight back against the spate of apartment buildings left in disrepair after foreclosure, lenders will now be responsible for keeping occupied buildings in decent shape. The legislation also expands the state’s loan modification program, which previously included only subprime borrowers, and prevents “distressed property consultants” from accepting the upfront fees that have contributed to scams in the past. [NYDN]

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Charter schools fight for public school space in the Bloomberg era, Dubai debt could drive prices down for U.S. commercial properties … and more

1. Feds say state housing plan for mentally disabled is insufficient [NYDN]
2. Charter schools fight for public school space in the Bloomberg era [NYT]
3. Community Board 12 gives Queens developer more time to get financing [Post]
4. Tenants at dilapidated Bronx buildings protest at the bank holding their landlord’s mortgage [NYDN]
5. City Council debates lawsuit at Broadway Triangle hearing [Post]
6. Queens church reopens after fire [Your Nabe]
7. New York investor to take over development of Jersey Shore waterfront town [Asbury Park Press]
8. Class divide feels very real for UES doormen [NYT]
9. Pick-a-payment loan lands Brooklyn woman among NYT’s “neediest cases” [NYT]
10. Athletes on the move rethink their real estate strategies [NYT]
11. Dubai debt could drive prices down for U.S. commercial properties [Reuters]
12. Bay Ridge school tries to block online forum discussing its demise [NYDN]
13. A history of the Astoria Pool [NYDN]

14. In Queens, an epidemic of illegal, unsafe subdivisions [Queens Courier]
15. Commercial fallout will be good for renters, but not much else [Just Means]

16. Old houses clad with porches and backyards surprise passersby in brownstone Brooklyn [NYT]

17. Roy Strickland: Developing NYCHA properties is the surest way to preserve and expand public housing [City Limits]

18. Brokers take on housekeeping, other roles for listings that linger in a distressed market [NYT]
19. Waiting to foreclose on distressed commercial properties has frozen the market [The Deal]

20. Japan has second thoughts about U.S. mortgage financing model after Fannie Mae and Freddie Mac woes [Real Estate Bloggers]

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