Wednesday, November 21, 2012

Poor finances seen costing Riverbay $3.2M per year


By Michael Horowitz

BRONX, NEW YORK, November 21- Co-op City, under the terms of its projected mortgage through HUD and Wells Fargo Bank, is being required to pay $2.8 million per year for mortgage insurance to satisfy the federal agency and $350,000 for insurance to satisfy the city and state agencies that are guaranteeing a portion of the loan.

This seems to mean that if Co-op City were a better fiscal risk, Riverbay could save $3.15 million per year, or the equivalent of 26 percent per year, on its projected mortgage refinancing.

The reality is that Co-op City, unlike most private homeowners, has failed to decrease its debt since its inception in 1968.

With the mortgage refinancing that is anticipated, Co-op City will have more than doubled its debt since the day it opened.

As a result, one could reasonably assume that moneylenders would be reluctant to loan the Riverbay Corporation a large sum of money.

In 1968, Co-op City was financed with a mortgage of an estimated $292 million, which was insured by the state's Housing Finance Agency (HFA).

In 2004, Co-op City and New York Community Bank (NYCB) agreed to $480 million in refinancing. Last year, NYCB agreed to refinance Co-op City to the tune of $555 million.

Now, a little more than a year later, Co-op City is poised to agree to a mortgage of $621.5 million.

Riverbay board member Daryl Johnson has stressed that Co-op City won't be able to survive as a community for people of limited means unless management officials are forced to abandon their wasteful spending.

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