A Swindled Immigrant Community in Brooklyn Gets a Housing Reprieve

One man wanted to find a home for his aging parents to retire. One young woman’s mother wanted to raise her family there. Three families wanted their children to go to good schools.

The five-story building in Bay Ridge, Brooklyn, erected on the site of a former Lutheran church, seemed to be the right fit for Asian families with modest incomes — they watched the construction with anticipation in the tight-knit neighborhood with a thriving Asian community. The developer, Xi Hui Wu, was a local whom neighbors recognized from the bank and the grocery store, and his then-wife, Xiao Rong Yang, was known as a prominent real estate agent in the area.

For the next several years, tenants moved in and paid hundreds of thousands of dollars to buy their apartments. Then in 2018, each unit received a thick envelope in the mail. Inside was a foreclosure notice, and the tenants came to a horrifying realization: It was all a sham.

Promissory notes and handshakes were never going to turn into deeds. For years, Mr. Wu had failed to make payments to a lender. He owed millions of dollars to the bank. And he had never received authorization from the city to turn the building into condos.

That could have been the end — 20 different households, $5 million lost between them, evicted by a bank. Mr. Wu’s whereabouts have been hard to pin down, with conflicting information among tenants and government officials as to whether he fled to China or remains in Brooklyn. (Neither Mr. Wu, nor his lawyer listed in court records, could be reached for comment.)

But the tenants now stand to become homeowners when the building is eventually converted to co-ops, under a deal that will be announced at a news conference on Wednesday.