This Is The Face Of Deutsche Bank

Tuesday, April 28, 2009
Paul Bass
New Haven Independent

David Co - the human being responsible for a German bank's millions of properties across the U.S. - flew to New Haven from California to hear a pitch not to evict families from foreclosed houses.

Co, 41, is the "manager of MBS Trust & Custody Administration" for Deutsche Bank. That means he's ultimately responsible for what happens to countless foreclosed-upon homes that Deutsche is holding after its investments in shaky mortgage-backed securities tanked - helping to spark the nationwide housing crisis and Wall Street meltdown. He works out of Santa Ana., Calif.

He flew Monday night to Bradley International Airport in Windsor Locks from Santa Ana, then took a room at New Haven's Omni hotel. Tuesday morning, he joined 30 other industry people from around the country for an unusual session in a second-floor conference room in City Hall.

"I came out in support of this effort," Co said after the two-hour session, which included a corporate-responsibility pitch from Mayor John DeStefano Jr.. "They really want to know who to talk to."

The session was part of an aggressive effort by a public-private rescue squad called ROOF (Real Options, Overcoming Foreclosures) to respond to New Haven's foreclosure crisis. The effort includes putting a face on, and securing a local contact telephone number for, distant lenders like Deutsche Bank that now control abandoned property in the city's neighborhoods.

In fact, Deutsche is the big kahuna of problem out-of-town absentee landlords. Deutsche filed the most foreclosure suits, 130 out of 945, in the city in 2008, according to ROOF Director Eva Heintzelman.

So the people invited to Tuesday's meeting included not just Co, but Deutsche's New Haven "servicers" - representatives of companies from several states who carry out the day-to-day duties of selling Deutsche's foreclosed-upon properties (or not), keeping them up (or not), and evicting tenants.

Under a law that went into effect last week, lenders who have foreclosed on New Haven homes have to register a contact person with the city or face $250-a-day fines and eventual foreclosure by the city. The idea behind the law is to force distant lenders overwhelmed by problem properties across the country to pay attention to blight here in New Haven.

Tuesday's City Hall session addressed a second issue: the fate of hundreds of families living in the houses being foreclosed on. Deutsche's servicers are said to routinely boot tenants when they seize a property, as a matter of course.

Legal-aid lawyers and ROOF organizers urged them Tuesday to reconsider that practice.

They brought in persuasive witnesses to echo the call - three officials from FannieMae. Under pressure from New Haven legal aid lawyers, FannieMae late last year changed its policy of evicting families from foreclosed-upon properties.

John F. Bauer (pictured), director of finance for Fannie's Single-Family Division in Washington, spoke to the group Tuesday about how well the new policy has worked, preserving the condition of homes and therefore the lender's investments.

"It's better for the neighborhood, better for the property, better for the families," Bauer said afterward.

The servicers left the meeting promising to consult their bosses about whether to heed the call to halt evictions, then report back to legal aid's Amy Marx. The companies tend to have national policies.

"Big banks and servicers have massive systems," noted ROOF's Henitzelman. "Changing their systems is a challenge" that requires working with a bureaucracy.

Deutsche's Co said the decision of whether to implement a FannieMae-like non-eviction policy is up to the servicers, not to Deutsche. He does support the concept, he said.

"We are certainly for keeping people in their homes," he said, if such a policy "preserves the trust assets" and "helps minimize the losses."

Co was asked how many houses across the country he's responsible for.

He paused. First he gave the number as 2,000. But that referred to securitization packages for which Deutsche serves as the trustee. Each of those deals involved hundreds or thousands of individual properties, he said.

The number of houses overall? "Millions" was his best guess.

FAIR USE NOTICE. This document may contain copyrighted material the use of which may not have been specifically authorized by the copyright owner. Tenants Together is making this article available on our website in an effort to advance the understanding of tenant rights issues in California. We believe that this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the U.S. Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond 'fair use,' you must obtain permission from the copyright owner.

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