Advertisement

SKIP ADVERTISEMENT

The Bay Citizen

Companies Foreclose; Blight Follows

Every few weeks, Alvin Chandra cleans up the garbage that has accumulated in the vacant lot next to his granite fabrication plant on Adeline Street in West Oakland — soiled mattresses, worn-out sofa beds and piles of used fast food containers.

“We’re constantly painting over the graffiti on our wall,” said Mr. Chandra, 47, pointing to the long flat exterior of his building that abuts the vacant lot. “It’s hard to make a good impression on clients when there’s a pile of trash in front of your building.”

The trash-strewn lot is owned by Fannie Mae. The government-controlled mortgage company acquired the property after a foreclosure on the previous owner last June. With the housing bust and continued recession, Fannie Mae, and its counterpart Freddie Mac, have quietly become major residential landowners in the Bay Area’s hardest-hit neighborhoods.

According to data from Foreclosure Radar.com, Fannie Mae and Freddie Mac now own 2,323 properties in the Bay Area worth an estimated $511 million. Like the vacant lot on Adeline Street, many are blighted, covered in trash, with overgrown lawns, junk cars, chipped paint and broken windows.

In Oakland, where Fannie Mae and Freddie Mac own 371 properties with an estimated value of $70 million, city officials inspected 142 homes and apartment buildings owned by the companies last year and found that nearly half of them violated the city’s blight ordinance. The two firms were fined $123,300 after they failed to fix problems quickly at nine of the properties.

Andrew Wilson, a spokesman for Fannie Mae in Washington, said the fact that most violations were quickly resolved after being identified by city officials showed “we are absolutely committed to stabilizing neighborhoods.”

Mr. Wilson said Fannie Mae spent $2.7 million to repair 529 homes in San Francisco and East Bay last year. “If there’s a code violation or a maintenance issue, we try to address it as quickly as possible,” he said.

But local government officials and community activists say the government-backed companies could do more to maintain their properties and keep neighborhoods from falling into decline. In December, Attorney General Kamala D. Harris of California sued Fannie Mae and Freddie Mac in San Francisco Superior Court after lawyers from the Federal Housing Finance Agency, which oversees the mortgage companies, refused to provide a list of Fannie Mae- and Freddie Mac-owned properties that have allegedly been used for drug dealing and prostitution.

“The enterprises do not have systems in place to retrieve such information,” Ashim Varma, a lawyer, wrote to Ms. Harris’s office on behalf of the agency. “These properties are managed by over 500 local contractors who are brokers and property managers.”

Margaretta Lin, who oversees Oakland’s foreclosure mitigation efforts, said both Fannie Mae and Freddie Mac had been “very cooperative” in fixing violations when they were pointed out, but added that Oakland had not been able to inspect a Fannie Mae- or Freddie Mac-owned property since last November.

“We really need the banks to inspect and maintain their properties on their own,” Ms. Lin said.

Outside the vacant lot on Adeline Street, Mr. Chandra said the only way to mitigate the blight was for Fannie Mae to sell the property quickly so it could be reused.

For years, Mr. Chandra said, a Victorian house had sat on the property, but in recent years it had fallen into disrepair, set upon by squatters and burned in a series of fires. Last September, three months after Fannie Mae took ownership of the property, the city of Oakland demolished the structure and put a fence around it.

The property carried $382,000 in debt when it was foreclosed on last year. It is currently for sale for $76,000, but Mr. Chandra believes even that is too high.

“It makes me angry because if they lowered the price, I would buy it and take care of it,” Mr. Chandra said. “As it is, it just sits there.”

aglantz@baycitizen.org

A version of this article appears in print on  , Section A, Page NaN of the National edition with the headline: Companies Foreclose; Blight Follows. Order Reprints | Today’s Paper | Subscribe

Advertisement

SKIP ADVERTISEMENT