LIVING IN LIMBO: Marisol Rivera and Roberto Cancel thought they were on the path to home ownership when they entered a rent-to-own agreement with Robert Coyle Sr. Four years later, they’re not sure if they’ll ever be made whole.
In a lot of ways, the story of Kensington’s Marisol Rivera and Roberto Cancel is typical of the victims of the devastating Landvest real-estate scam.
Like hundreds of other couples, they were lured in by the dream of home ownership peddled by Robert Coyle Sr., who offered rent-to-own agreements for those willing to fix up dilapidated shells. Like the others, they poured everything they had into rehabbing a house only to learn that Coyle had, in 2008, defaulted on $15 million in mortgages on hundreds of properties, including theirs. And like many others, they’ve spent the last few years in real-estate limbo — perpetually staring down eviction, but in too deep to bail out.
But in one way, the story of Rivera and Cancel is very different: The City of Philadelphia had an opportunity last year to take their house on Potter Street — for free, along with 50 other properties held by a debt receiver called MountainView Public Private Investment — clear the title, and let the family take ownership.
According to documents obtained by City Paper, the city declined.
“We are sympathetic to the plight of those citizens still occupying the Properties; however, as you are aware, the City cannot take title to occupied properties,” reads a letter from then-Deputy Managing Director, now-Public Property Commissioner Bridget Collins Greenwald to the office of Councilwoman Maria Quiñones-Sánchez, whose district saw the worst of the Landvest fallout.
And, it added, “at this time, the City cannot acquire additional blighted vacant property with nominal market value to its inventory.”
Instead, a few months later, the property went into the hands of a new investor: Red Brick Properties — run by Coyle’s son, Robert Coyle Jr.
That the Landvest collapse happened can be blamed, at least in part, on the unregulated, reckless way mortgages were handed out during the pre-recession housing bubble. But that it’s taking this long to resolve — and that there’s no long-term plan for doing so — “speaks to exactly why we need to have an established land bank,” according to Sánchez.
Sánchez has spent the past few years pushing legislation to create such an entity, which would have the power to acquire properties, help clear their titles and liens, and sell them for development or some other productive use. Now, there’s hope a bill could pass out of City Council this year, in time for the land bank to be funded in the next budget cycle.
As Landvest properties continue to ricochet between investors and speculators, while residents continue to hang in the balance, the land bank might finally offer the chance to clean up this mess for good.
Many things about the land bank aren’t yet known, like how it will pay for maintaining properties it holds, or what the impact of councilmanic prerogative (the near-absolute power of the district City Council member) will be on the process.
What is known is what happens without such an entity in place.
As it stands today, vacant-property disposition by the city and its agencies is notoriously slow and bureaucratic; acquisition — even in cases like Landvest where it could be a critical step to clearing the title and making victims whole — has ground nearly to a halt under the administration of Mayor Nutter.
Many Coyle properties carry extensive municipal liens that could, if the city chose, trigger tax sales — but the city doesn’t want to risk taking them into its own, tattered vacant-property portfolio.
So, instead, residents are caught in purgatory, and whole blocks are mired in the ensuing blight.
“The issue is who is going to be responsible for the portfolio,” says Sánchez. “We are. No matter what, we still have blight and we’re still dealing with it on the ground, even if it’s not directly.”
Today, many Coyle properties remain packaged in large bundles, held by banks or passed around to various investors — raising concerns, as City Paper reported last year, of a continued real-estate “shell game.”
The 50 that the city had the opportunity to buy, once mortgaged to Earthstar Bank, are still in the hands of Red Brick Properties. Coyle Jr. twice stopped by Rivera and Cancel’s house to try to collect rent once last year, though the property is still $11,000 and 10 years in arrears on taxes. The couple narrowly saved it from tax sale in 2012. Coyle Jr. also acted as a sort of broker to transfer other properties to yet another investor, Manilal Mathai.
In 2012, an additional 117 properties went into the hands of an entity called Kenpor, which quietly struck a deal with the city, buying it time to rehab or demolish the properties — while preventing L&I from enforcing code complaints against it and absolving Kenpor of responsibility for any further municipal liens and taxes, according to a copy of the settlement obtained by City Paper.
Meanwhile, other properties are in still more tenuous situations. Residents living in the group of more than 60 former Coyle properties now held by GNE Properties received letters over the summer indicating that the portfolio could go to foreclosure sale at any time, says Community Legal Services lawyer Jennifer Schultz, who represents some of the residents. So far, that hasn’t happened.
“They’ve been in a limbo state for a long time, and it’s still in limbo,” she says. “The implication is the foreclosure may be moving forward. But we don’t know that definitively.”
Schultz says the city has helped in some cases, but there are no easy answers for most of her clients or, for that matter, for the banks they’re dealing with. “It’s a complicated situation, where all the parties at the table are coming to the table aggrieved. And the person who really caused the mess isn’t there.”
Coyle Sr. was sentenced to six years in federal prison in May.
“Everyone who is sitting at the table is trying to sort out how we apportion that loss,” Schultz says, “but everyone is a loser.”
That losing proposition is apparently why Mountain View was willing to hand over its portfolio of properties to the city; the taxes and liens made the investment a liability.
For Rivera and Cancel, that could have been the tidy resolution to their four-year nightmare.
Rivera was optimistic when she bought the house; though it was little more than a shell, it would be her shell.
“There was no kitchen, no door, no window, no floor, no bathroom. Nothing,” says Rivera, whose only income is her monthly Social Security Disabi-lity payment. She says Coyle Sr. told her the house was an as-is, rent-to-own deal: She paid $2,500 up front and $450 a month in rent. Cancel estimates the couple has spent $10,000 to make it livable.
Rivera’s daughter, Jeymarie Santiago, doesn’t live there, but often brings her kids by. One has a scar from when he fell down the crumbling stairs into the basement after the railing came off in his hand. The other cut himself on a jagged edge in the kitchen.
Still, the couple continues to set aside $300 or so every month to fix something in the house. They paid their rent faithfully until they learned in 2010 of the Landvest collapse, Rivera says.
“Where’s the justice for people who got kids and put everything they can into the house?” says Santiago, translating from Spanish for Rivera, who is angry but also optimistic. “I want the house, and I’m ready for whatever comes my way. I’m not a rich person, but I do believe in God and I know God will back me up all the way.”
Rivera and Cancel have gone through a lot. But their neighbors, at least, are lucky. After all, the couple has prevented this house from sliding into ruin like some other abandoned Coyle properties.
Guillermina Santos, a resident of Clearfield Street in Kensington, has seen what can happen other-wise. She lives next to another of the properties the city had a chance to take from Mountain View.
The house, she says, was a wreck. “People used to go in there and smoke [crack]. Then it caught on fire, and it was knocked down eventually.” As a vacant lot, it attracted even more drug users and short-dumpers.
Santos has been asking for three years if she could buy the lot to use as a side yard. So far, that hasn’t gone anywhere.
Land-bank advocates figure side-yard applications (which now sometimes get waylaid for five, 10 or even 20 years) would be far simpler under a new agency.
Sánchez envisions a land bank staffed with people from various city departments who could work together to troubleshoot cases, clear titles and quickly establish values for properties.
Right now, says Sánchez, “There’s no mechanism by which we do that quickly. There’s several different departments that touch something like that. We have no one whose job it is to shepherd that through. That’s why those cases are so complicated. Nothing happens unless someone decides to be Superman and get it through.”
There’s also apparently no one whose job it is to enforce agreements like the one between the city and Kenpor. And, Sánchez admits, there’s no long-term strategy in place for most of the ex-Landvest properties.
“[That plan] will happen eventually, but it won’t happen as a matter of practice. It will happen, God forbid, when we have some sort of incident on the properties, you’ll see us acting on that.”
The land bank, she says, could engage residents, nonprofits or community-development corporations to take on blighted properties and get the city to forgive debt. And, maybe, it could even create a legitimate process for people like Rivera, who value homeownership and are willing to put in sweat equity on low-value properties — much like Coyle’s rent-to-own dream.
After all, those nearly worthless Coyle properties are, to people like Rivera and Cancel, a place to call home.
“If we had a quick mechanism for those Coyle properties,” says Sánchez, a way for low-income people to take them, fix them up and move in, “I bet people would say, ‘Give me a shot at it. I’m in.’”
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