When you’re facing 28 foreclosure cases, what’s a couple more?
Infamous Manhattan landlord Steve Croman has been hit with new foreclosure cases connected to 11 properties. Loan principals for those new cases total more than $55 million, bringing Croman’s total defaulted principal tally up to $306 million. The most recent case was recorded Dec. 12.
The wave of defaults is almost entirely the work of one lender, an entity of Bellwether Asset Management, which bought a portfolio of Croman’s loans in November. In some cases, the lender is pursuing personal judgments against Croman and his family, which could spell trouble for the landlord, who spent time in prison for fraud.
“They are aggressive, they buy with the intent to default,” Croman said in a text message to The Real Deal. “We are paying them off.”
The new foreclosure cases were brought by Bellwether entity Orange Owner LLC. Most of the 11 loans are cross-collateralized and cross-defaulted. The lender has accused the Croman-connected borrowers of stopping payments, misappropriating rents and falling behind on water and insurance payments.
In some cases, the lender argues those behaviors justify a judgment on Croman personally, not just the borrowing entities he’s connected to. Croman, like many building owners, signed guaranty agreements that committed him to covering losses in the case of certain bad acts like fraud or abandonment. Kelly Schneid of Moritt Hock & Hamroff, representing Orange Owner LLC in the suits, did not immediately respond to a request for comment.
The total tally of foreclosure cases faced by Croman now totals 32, with nearly all brought by Orange Owner LLC. The properties in the cases span much of Manhattan, including the Upper East Side, Upper West Side, Chinatown, the West Village, the Lower East Side and Alphabet City.
One of the homes, at 7 East 75th Street, was used as the primary exterior shot in the 1990s sitcom “The Nanny.” It served as the Sheffield family’s mansion, the workplace of protagonist Fran Fine, played by Fran Drescher. An entity connected to Croman bought the 6-story building off Fifth Avenue for $14.5 million in 2008. The New York Post first reported the connection.
The lender alleges the borrower stopped making payments on the loan in August.
In November, the lender purchased 38 Croman-connected loans, with principals totaling $247 million, from Flagstar Bank, whose predecessor, New York Community Bank, originated the notes. Centennial Bank helped finance the loan purchase for Bellwether. Many of the properties in the portfolio include rent-stabilized units.
Seven of the foreclosure cases were brought by other lenders. Those total $42.4 million in principal.
Croman gained notoriety for widespread allegations of tenant harassment, landing him the designation of one of the city’s worst landlords. After the state brought a civil case and criminal charges against him, Croman eventually paid $8 million to a tenant restitution fund and spent eight months in prison for mortgage and tax fraud.
Elsewhere, Croman has sued another lender, this one an entity of Dalan Capital, to stop an auction of his personal home on the Upper East Side. A judge has postponed that sale as the case plays out.
Read more
Steve Croman defaulted on $231 million in principal, lenders allege
Croman sues lender to stop auction of his UES mansion
Flagstar dumps $247M in debt tied to Steve Croman
