|723 Non-Existent Cincinnati Apartments|
"It is hereby stipulated by and between the parties through their respective counsel of record that the number of project-based housing units involved in the above foreclosure proceedings in 677 and not 1,400 as previously believed and noted in legal memoranda by both counsels."
What is not yet clear is how the error was made. Did Fannie Mae have incorrect numbers? Was there sloppy record keeping? Or poor arithmetic? Because of the error, Magistrate Bachman issued "Findings of Fact" that said the case involved 1,400 rent subsidized apartment units:
"The Magistrate finds that the Tenants are residents of three separate properties in foreclosure, that they entered into a lease with NY Group OH1 LLC ("NY Group") before the filing of this action, and that each lease is subsidized by the Secretary of Housing and Urban Development ("HUD"), and that each lease is unrecorded. The magistrate finds that 20 separate properties are involved in this foreclosure, totaling 1,400 individual residential units. The size and location of each property is different, but all of the units have subsidized leased with HUD. The subsidies are in full force and effect as of the date of this decision."
On the surface, the Cincinnati foreclosure seems to be the latest example of a legal system struggling to handle the flood of foreclosures pouring into the courts because of the real estate collapse. Across the U.S. there are robo-filings and questionable securitized loan documents. And now a Fannie Mae foreclosure that cited the existence of 723 Cincinnati-area apartments that don't exist. Fannie Mae is Congressionally chartered corporation that is financially insolvent. Along with its sister, Freddie Mac, Fannie Mae guaranteed or owned about half the nation's $12 trillion mortgage market. Fannie Mae is currently in conservatorship under the Federal Home Finance Agency, which was created in 2008 as a bail out program. In Cincinnati, Bachman has appointed a receiver to manage the apartment buildings while the foreclosure proceeds. There are allegations that the buildings were deteriorating after the owner defaulted on the $21.2 million loan.