Disappointed and shocked, he considered returning to Colombia, but he had come to America for new opportunities, and this setback wasn’t going to change his plans. He vowed to save enough money to one day buy a home of his own. In 2006, after six years of renting, Lopez had accumulated enough for a down payment and applied for a mortgage.  While he wanted to buy a co-op, the bank encouraged him to instead purchase a two-family house and take on a renter as an additional source of income. 

 Although Lopez didn’t want to be a landlord, the bank was adamant, so he bought a yellow, flat roofed duplex in College Point, Queens and looked for a renter. He remembers thinking that this was simply what you did in America. 

  “You purchase a house, a two-family house and rent one unit,” Lopez said. “That’s what middle class people do in America.”

 Eventually, Lopez started to see the house as an investment, and he took out a second mortgage so that he could move and start renting both floors of the duplex. The plan worked until both of his tenants stopped paying rent. Now, Lopez finds himself bracing for foreclosure. “It’s devastating,” said Lopez. 

  Single property owners make up only 13% of New York City landlords; according to Housing Preservation and Development data compiled in 2018, the average lessor in New York City owns 21 to 60 rental properties. When it comes to lost rental revenue, large landlords have experienced a greater total loss, but Mom-and-Pop landlords have been impacted more severely because they have less of an ability to weather a loss of rental income. “If you have a smaller portfolio, it’s probably less diversified,” said Furman Center housing policy expert Charles McNally. “There’s a much greater risk in terms of the stability of your assets.” 

 Additionally, small landlords are also more likely to rent to economically vulnerable tenants.  “Our early analysis showed that households that worked in industries likely to be shut down due to [Covid measures] were disproportionately concentrated in smaller buildings, which tend to be owned by Mom-and-Pop landlords,” said McNally. 

The average New York City landlord owns between 21-60 rental properties. Mom-and-Pop landlords are in the minority. Photo courtesy of JustFix.nyc

 Lopez’s tenants are among approximately 185,000 New York City households that are behind on rent. This estimate, which was based on a poll conducted by the Community Housing Improvement Program (CHIP), accounts for around half of the rental properties in New York City. While CHIP estimates that New York City renters owe $1 billion, the city-wide total is probably closer to two-billion. 

After Lopez’s tenant Claudia didn’t pay rent for a few months, Lopez hired a lawyer to serve her with an eviction notice.  The timing was unfortunate for him; a week after he’d filed his claim against Claudia, a city-wide shutdown brought New York City to a halt.  

 Governor Andrew Cuomo issued a 90-day statewide eviction moratorium on March 20, 2020. Suddenly, a tenant who had stopped paying rent before the pandemic was now protected from eviction indefinitely. By April, Lopez’s other tenant, Daniel, also started to withhold rent. Lopez pleaded with both tenants to pay their share. They claimed that they were unable to, but Lopez has his doubts.  “Claudia bought a new car; she has a better car than me,” Lopez said. “How can she say she doesn’t have money to pay rent?”

 The New York State legislature has extended the eviction moratorium each time it expires. The current mortarium is in place until May 1, 2021. The housing courts are technically open, but only certain emergency cases – eviction of violent tenants and hearings against landlords who lock renters out – are being heard. A huge backlog of cases is piling up. Meanwhile, landlords like Lopez are left with no income to pay a looming monthly mortgage. After more than a year of non-payment, Lopez has lost $47,600 of rental revenue. The loss comes at a difficult time. His hours as a sanitation engineer for the New York City Department of Environmental Protection were cut in April 2020. 

 He hasn’t made his $3,000-a-month mortgage payments in almost a year. While the bank gave him a six-month forbearance to delay a foreclosure, his debt is mounting.  He knows the bank will foreclose on him as soon as they are able. 

 While Lopez fights to hold onto his only rental property in Queens, a Brooklyn landlord is facing similar difficulties. 

 Clarence Hammer, 46, grew up in Brooklyn where his parents always owned a house. He witnessed first-hand the stability that comes with homeownership and wanted the same for his family, so in 2007 he bought a two-family house in Brownsville. For 12 years he lived on the bottom floor of the duplex at 618 Rockaway Ave. with his wife, son, and daughter and rented out the top floor. 

 In May 2019, keeping a promise to his wife that they would someday leave the city, they moved an hour north to Harriman, New York. Keeping the Brownsville apartment as an investment, they found a renter, Chantel, for the bottom floor of the red brick rowhouse.  Starting that summer, Chantel paid only half of her $3,250 rent. In September 2019, she paid nothing.

 Hammer filed for non-payment litigation in New York City Housing Court and had three court appearances: November 2019, December 2019, and January 2020.  By March 2020, Hammer was confident that he was nearing legal recourse. Then, the pandemic halted his litigation.

 Today, Chantel owes Hammer more than $58,500, leaving him unable to make his $5,000 monthly mortgage payments. Other financial obligations are falling to the wayside. Taxes and bills sit unpaid as he struggles to pay off what he can.  “I’m constantly getting harassing phone calls from the financial institutions that chose to lend me the money,” Hammer said. “And I don’t really even blame them, I understand. It’s really embarrassing.”  

 Hammer purchased his Brownsville apartment in an attempt to establish intergenerational wealth. “This was something that I thought I was going to pass on to my kids to establish financial stability,” Hammer said.

 In New York City, only 27% of Black households and 17% of Hispanic households own their homes, according to The Furman Center at NYU. 

 “Homeownership is a key wealth generation strategy,” McNally said. “In the wake of the foreclosure crisis [of 2008] we saw a huge destruction of Black and Hispanic wealth. That’s a real concern here as well.” 

 Black and Hispanic landlords are disproportionately affected by the Covid-19 housing crisis that is reaping havoc on their primary investment. As their eviction cases sit stagnant, these landlords are left waiting in limbo, hoping for financial relief, but dreading the inevitable. “I’m going to lose my home,” Hammer said. “That’s the reality.”

The post COVID-19 has left many Black and Hispanic landlords in serious debt appeared first on Pavement Pieces.

Facing Foreclosure from Pavement Pieces on Vimeo.

LAS VEGAS,NV – Arnold Loia’s house no longer feels like home. Pictures that once hung proudly on the wall lie en masse on the floor; the living room is a crude mosaic of drooping furniture, stacked chairs rubbing heels with end tables; and boxes with sharpie graffiti act as stunt doubles for the items within, haphazardly filling the void left behind in rooms across the house.

Instead, the space serves as a constant reminder of what Loia, 41, of Northwest Las Vegas, stands to lose: the plan for his family’s future, a place to raise his two young girls, and his dying dream of home ownership.

Arnold Loia, 41, of Northwest Las Vegas, Nevada chose to enter into a short sale after failed attempts at modifying his mortgage through Bank of America, and government programs. Photo by Eric Zerkel

Loia is one of the hundreds of thousands of Nevadans facing foreclosure, a key demographic of voters whose homes, credit, and financial stability hinge on access to key government programs targeted at alleviating the rigors of the foreclosure process, programs that could potentially hang in the balance of the upcoming election.

And within Nevada, no place was hit harder than Las Vegas. According to the federal housing finance agency, home values in the Las Vegas area are down 60% over the past 5 years, and continued to fall in the latest quarterly data.

“I know that we as homeowners are responsible, we made the choice to pay, but sometimes you need help,” said Loia.

“I didn’t qualify for any of the programs.”

Specifically, Loia didn’t qualify for programs made available under the Making Homes Affordable Act, (MHA) legislation passed under the Obama administration that aims to provide individuals with access to programs that can help restructure or modify mortgage payments to alleviate financial hardship, and in the process, save homes from going into foreclosure.

After 8 months of frustrating back and forths with Bank of America trying to get his mortgage payment modified, Loia succumbed to the process, and made the difficult decision to enter into a short sale, in which the bank agreed to sell the house for a potential loss, or deficiency, thereby releasing Loia of the mortgage.

“That was the hardest thing to do,” said Loia. “You love your home, and you don’t want to sell your home. You want your kids to grow up here,” Loia said, choking back tears.

Even though Loia didn’t qualify for any of the restructuring programs, his financial fate very much rests in the hands of the election. Under the The Mortgage Debt Relief Act of 2007, Loia can avoid paying taxes on the deficiency he accrues via the short sale by excluding the debt on his taxes.

However, the Act is set to expire on December 31st, 2012, creating even more uncertainty out of Loia’s situation.

“We’re leaving this house; we have to be out of here by December,” said Loia. “I’m hoping Obama will extend it just in case the house doesn’t sell by then.”

Despite not qualifying for the Obama administration’s programs, he still saw the programs as a step in the right direction, something he doesn’t think Mitt Romney would do should he take office.

“I don’t see it with Romney at all, said Loia. “I keep seeing that commercial where he [Romney] says, ‘let the foreclosure process go through,’ but if you’re not going through it you have no feelings for it.”

Unlike Loia, Cathy Martinez, 43, Southwest Las Vegas, was able to qualify for an older version of the Making Homes Affordable Act, and a little over a year ago lowered her mortgage payments by around $200, just enough to make ends meet.

Cathy Martinez, 43, of Southwest Las Vegas, successfully modified her mortgage through the Making Homes Affordable Act, but still thinks more needs to be done to help the middle class deal with housing issues. Photo by Eric Zerkel

“I’m still glad I went through it, because it freed a couple hundred dollars a month for something else, but it was a frustrating process for what the outcome was,” said Martinez.

Martinez said that though she qualified for the old version of the Act, the latest version has more stringent requirements that have made it impossible for everyone she knows to receive aid.

“There are these programs out there, but for the average person are they truly helpful? I don’t think so,” said Martinez. “Things get put in place, and I think the intent is to help, but maybe the people who are making these decisions aren’t looking far enough to see how these acts aren’t helping the middle class.”

Like Loia, Martinez thinks that the MHA at least showed initiative on Obama’s part to help those struggling with foreclosure.

“Obama has tried to put some plans in place for homeowners, but maybe they need to look at them further to see what’s truly helping the middle class,” said Martinez.

“In all honesty, that’s where I’m putting my faith right now.”

But not all those who have gone through the foreclosure process think Obama provides the best option for Nevada homeowners.

Josh Leavitt, 38, had his central Las Vegas home foreclosed two years ago. Leavitt was working with US Bank, his lender, to modify his mortgage, when the bank sent him a letter notifying him that they were no longer working with him, and that he and his family had to move out immediately.

“They just pulled the rug out from under us,” said Leavitt.

Though Leavitt fell on financial hardship in part due to medical issues, he attributes a large share of the housing crisis to overbuying during the housing boom, the fallout in the local economy, and personal responsibility.

Leavitt said that Obama’s take on the economy and business does not fit with his own, and that Romney would provide the better option to set the economy on the right track and in turn, fix housing.

“I don’t like the idea of the government coming in and telling the bank you need to rewrite this mortgage for less than what you lent,” said Leavitt.

“I’d like to see a political push for growing the economy, because the economy is going to fix these problems. If the economy kept going the way it was before the crash, I’d still probably be in that house right now.”

Unlike the others, Lydia Murphy, 45, of Central Las Vegas lost more than just her home to the housing collapse, she lost out on investments too.

When the housing market crashed, Murphy could no longer afford to charge rent high enough to cover the cost of her two investment properties and they were foreclosed on. And, in turn, she lost the home she lived in.

“You feel like you’ve failed,” said Murphy.

“I put a lot of thought into spending money on investment properties, trying to build a future, and all of it was wiped out. I had no control, none.”

Because they were considered investment properties, Murphy’s mortgages automatically did not qualify for assistance. And like Leavitt, Murphy believes the economy and Romney are a better option than programs like MHA.

“I’m a Republican, and I voted for Romney,” said Murphy. “I think he has a better solution for the economy.”

Still, Murphy remains skeptical about the affect either candidate will have on Nevada and housing.

“We’re not anywhere close to being better,” said Murphy. “I don’t think anything good comes out of anybody’s mouth about trying to fix housing.”

Back at Loia’s home, the faint sounds of hammers and drills echo down the sidewalk of the neighborhood of Centennial Springs. The bare frames of unfinished homes jut out in rows, a by-product of investors snatching up cheap homes to rent out for a profit.

Loia dropped his head and closed his eyes, envisioning what it would be like to rent one of those houses just down the street from his current home.

“Yes, those are available for rent, but we don’t want to live in the same place where we see our home every day,” said Loia.

“Imagine driving by every day, and seeing the house you fought for, or staying here, and dealing with the desperation of when that notice is going to go on the door.”

The post Key voter demographic: homeowners facing foreclosure appeared first on Pavement Pieces.