Thursday, September 20, 2012

Co-op City seen `imploding slowly'

By Michael Horowitz
BRONX, NEW YORK, September 20- Mounting debt is swallowing up Co-op City because most members of the Riverbay board don't understand that constantly increasing loans is never a good option.
That's the view of civic activist Frank Belcher, who stressed, this week, “This place is imploding slowly, but surely. The reality is that the people in management don't have a clue about how to manage Co-op City or manage the community's finances.”
Belcher stressed, in a telephone interview this week, “It's not logical that you can keep increasing the amount of money you borrow every time you need money. You might want to refinance to take advantage of lower interest rates, but that doesn't mean that every time you refinance you should borrow more money.”
The civic activist, a former homeowner, noted that unfortunately, many of the community's shareholders have never owned a home in their lives and understand little about what mortgages and homeownership are all about.
“When you own a home, your goal has to be to pay down the money you owe,” Belcher stressed. “In Co-op City, we're doing the opposite because the people in management don't seem to have a clue about the basics of real-estate management. All of us would be broke if we managed our money the way the people at Riverbay manage Co-op City's money.”
Co-op City, in recent years, has lost millions of dollars by refinancing its mortgage.
“You have to pay mortgage-origination and mortgage-filing fees each time you refinance,” Belcher stressed. “Each time you refinance, you have to pay a significant prepayment penalty for getting out of the old mortgage.”
Belcher noted that if Co-op City moved toward privatization, management officials would be forced to reveal, in significant detail, how apartments in the community are being allocated and how the shareholders' money was being spent.
“I'm really tired of all the excuses for management's expenses,” Belcher stressed. “We have some employees at Riverbay who can barely walk, and yet, management keeps these people on Co-op City's payroll. We keep hearing from just about everyone associated with Riverbay that we can't lay off any of the dead wood who work for this community.”
Belcher emphasized, “As far as I'm concerned, we don't need to refinance the mortgage. Refinancing will just allow the people at Riverbay to continue wasting our money. It will allow business to continue as usual at Riverbay even though things really need to be shaken up around here. We need major changes around here, not more of the same and not business as usual.”

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