Satan's Mortgage

Peller was flying, still half asleep, not thinking about heading into La Guardia on the eight o'clock shuttle. He roused himself reluctantly for the descent. Peering out through the small, scratched porthole, he managed to get an airborne glimpse of the "Big Apple" in all its glory before fully waking up to the truth of New York City in July, 1993: a tired-out shell of a city sheltering a buzzing mass of humanity in the shadow of falling prosperity. New York today was more like a Third World capital than the hub of the world's greatest nation. Peller pictured Rome's slow burn as Nero fiddled; the ancient urb could not have fallen hotter or into greater decay than this megalopolis. Louis Peller was tired. He had been up since the marbled gray-pink dawn of five ante-meridian. Make that ante-aurora. To make the eight o'clock out of Washington National Airport from his home in suburban Maryland, he reluctantly emerged from the shadowy intimacy of the bed where his wife Lana slumbered on serenely, her inviting warmth encouraging him to snuggle just a little longer against her languorous, sensuous body. He dressed hurriedly and fumbled through the dark house, children stirring briefly as he tendered silent kisses and Manny-dog leaping against him in a sad-eyed farewell for the day, until he pulled out of the driveway of their comfortable four-bedroom home to re-emerge a brief plane-ride later in a hard, unforgiving world. It was Peller's job to settle defaulted mortgage loans: play the good guy to humanity's tired, poor and humble masses, teeming in crumbling post-depression high rise apartment buildings now passing for "habitable housing," owned by slumlords who could no longer make payment on their mortgage loans. At least, that's how he liked to view the job. Every week, he flew up to New York to hammer away at yet another borrower who had defaulted on his loan from Amie Mae, the quasi-government, billion dollar lending institution. The American National Mortgage Association Company -- whose acronym Amie Mae, like that of its competitors Fannie Mae and Freddie Mac, conjured up freckle-faced playground pals -- employed him to negotiate, mediate and arbitrate with borrowers not paying on apartment buildings and cooperatives in this God-forsaken city. 9:45 a.m. In the front of the cabin, Louis barely registered the flight attendants preparing for landing. Flying, to Peller, was a grind, like commuting on the Washington Beltway; a monumental waste of time. Now, he could see the heat rising in waves from the runway as the USAir jet touched down. He imagined the smell of burning rubber as the wheels gripped the pavement to drag the unwieldy silver bird to a stop. He thought ahead to his "to do" list for the day: Tommy, his driver/bodyguard, to meet him at the airport to escort him into the New York office of Amie Mae. There, he was to meet with a borrower, a Hasidic Jew who hadn't paid the bank for ten months and claimed he had no capital and no way to raise any to pay on his "measly, little 32-unit apartment building that no one else would want" in the Bronx. "Of course. I understand your position, Mr. Pollock," Louis had harrumphed. The company had hired him, Peller knew, in part because he was Jewish; none of the gentiles in the office could speak the language of New York's peculiar Jewish apartment owners who had purchased so many of these buildings in the seventies and eighties. "Tell me, Mr. Peller," Alvin Pollock would say, "will you come to synagogue with me this morning to make our minion? After, I take you to Ratner's on Orchard Street. Maybe a blintz, a little lox, some onion rolls...we talk business." Oh yes, Louis understood that language well; had grown up with it, in fact. Certainly, he could relate far better than any Texas-boy with a wild hair, or the pale Hoosier whose worldly exposure omitted Jews, Italians, blacks or any of the other ethnic Americans who made up New York's fastest-growing populations. Talk about "white bread!" Peller got a kick out of the fact that he was one of a few token Jews at Amie Mae headquarters in the suburbs outside Washington, D.C. He didn't mind the role as long as they also understood he was professional, strong-minded, and able to negotiate with the toughest of them. That his bosses back at the Home Office couldn't appreciate those ethnic traits in the office (he had a strong streak of independence), was a constant source of friction between them. They expected a good bureaucrat in the office and a renegade when negotiating deals with borrowers for The Company. Fortunately for Peller, he wasn't right out of Central Casting. His brown wavy hair, dark complexion and strong nose could as easily be Greek or Italian as Jewish. He could move adroitly between the ethnic and corporate worlds, thanks to an upbringing that stressed a healthy respect for the Almighty and pragmatism above all else. He was schooled in the customs of the Jewish community and the rules of the secular one. Accustomed to straddling the line, Louis felt comfortable dancing between both worlds. For his finesse, Peller had been given Amie Mae's worst loans in New York's toughest neighborhoods. There were many of these high-risk loans in the mortgage lender's portfolio. Amie had gotten caught in the fast-paced, high-risk lending environment of the 1980s. Property values plummeted in the late '80s, leaving most real estate in New York City seriously over-leveraged. Appraisers, banks and Amie Mae miscalculated the market: they overestimated the value of properties, failed to predict the impact of the recession on real estate, and simply lent too much money to unscrupulous slumlords. Landlords in Brooklyn, Harlem, and the Bronx were losing money by the barrel-full today. Monthly rents in these low-income buildings never came close to covering expenses. The heavy debt service left landlords strapped: they stopped repairing properties and started milking the buildings for whatever cash and profit they could eke out of them. Profit -- the major impetus for guys buying these properties (they were, typically, men) to take on such crime-ridden, headache-inducing, decrepit properties -- was virtually impossible, so these landlords abandoned any pretense of making them livable or safe. And the prognostications were gloomy -- the burgeoning number of mortgage defaults by borrowers was driving properties into foreclosure and real estate investors into bankruptcy. During the boom times, only three years before Louis joined up with Amie Mae, many New York landlords had paid out two- and three-times what a building was worth today. Since the 1987 stock market crash, rents had declined by as much as 30 percent. The New York City real estate market was decimated, left in a state of economic depression to a degree unmatched by any other major city in the United States. The high rate of defaulting loans on rental apartment buildings was shaking the foundations of the city's real estate and banking industries. Amie Mae needed people to work out its huge backlog of loan defaults on rental apartments and cooperatives in New York City. As a result, workouts were the only decent real estate jobs available these days, and Louis felt fortunate to be bringing home a paycheck. He'd been out of work for almost a year before the job with Amie Mae came up and even though he thought his bosses to be small-minded technocrats at a company that was, at best, unenlightened, some income was better than living off the wife's salary. Enter Louis Peller: real estate workout maven and negotiator par excellence.