(Wall Street Journal) — Facing a spike in the number of apartment buildings going bust in low-income neighborhoods due to heavy debt burdens, the Bloomberg administration is taking an activist approach, publicly and privately pushing lenders selling loans on the properties to take haircuts on the troubled mortgages. The aggressive role reflects a fear among city housing officials that the prices being offered to lenders for distressed properties’ debt are too high to allow for adequate repairs of run-down apartments, and will ultimately force new owners to resort to predatory tactics against tenants to make a return.
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