‘Stolen’ Brooklyn homes to be returned after judge slams city housing program

Judge Partnow: ‘Unconscionable and shocking to the conscience of the court’

March 29, 2019 By Mary Frost and Rob Abruzzese

Supreme Court Justice Mark Partnow. Eagle file photo

BP Adams renews call for moratorium on questionable foreclosures

In November, Adams and Councilmember Robert Cornegy called for a “full-scale forensic audit and investigation” of the city’s TPT program as well as the broader issue of deed fraud.

Adams reiterated that demand on Thursday.

“My call remains for a temporary moratorium on TPT seizures and other foreclosures in Brooklyn,” Adams told the Brooklyn Eagle.

He added, “We need a full-scale forensic audit and investigation on the federal, state, and city levels into the issue of deed fraud in the borough of Brooklyn, including the role that the TPT program may be unintentionally playing in defrauding homeowners of their property.”

State Sen. Montgomery, co-sponsor of the March 15 Borough Hall hearing, told the Eagle, “First and foremost, I am so happy for the owners and shareholders of the six properties that were returned. This court ruling is extremely encouraging and validates the concerns that so many of us have had about the Third Party Transfer (TPT) program.”

She added, “I am preparing a letter to request an audit of the program and will ask my state colleagues to join me. As a follow-up to our March 15 legislative hearing on the homeowner crisis in Brooklyn, my colleagues and I will be issuing a report with policy and legislative recommendations to address TPT, municipal liens, deed and equity theft and predatory foreclosure practices.”

‘A grave injustice to defendant owners’

Justice Partnow ruled in his decision that although the six properties each had a unique set of circumstances, he was vacating the judgement against each one. Partnow explained that the TPT program was, “intended to be a beneficial program,” but its “overly broad and improper” use had unfairly taken property from its owners.

“To permit such transfers, in light of the facts, would work a grave injustice to the defendant owners for no reason and result in an unjustified windfall to the city,” Partnow wrote.

“The court also determined that the judgment was unconscionable and shocking to the conscience of the court based on the amount of the lien versus the value of some of the properties,” he went on to say. “Lastly, in some instances, the city’s misleading nonfeasance would result in a manifest injustice.”

In the 69-page decision written by Justice Partnow, he explained his reasoning for each individual property. In each instance, he wrote, “By foreclosing in rem and transferring title to Neighborhood Restore pursuant to the TPT program…the owners are completely stripped of all of their equity in their properties.”

In the case of one of the properties, 23 MacDonough St., Justice Partnow wrote that the city conceded that the property was not distressed, according to the administrative code, and that there were no repair charges more than $1,000.

Justice Partnow ruled that the foreclosures and the transfer of the property to Neighborhood Restore are vacated, and restored the property titles to their original owners.

The judge went on to shoot down statute of limitation claims by HPD and stated, “Due regard for property ownership is a fundamental tenet of the U.S. Constitution and the NY Constitution. Since the right to property is a fundamental right in New York, all subsequent grants of power…are limited as to how they adversely affect it.”

Story updated on April 1, 2019 with a statement by Nick Paolucci, spokesperson for the New York City Law Department.