In effort to stem deed theft, shady practices banned
A slew of reforms to ban behaviors connected to deed theft were signed into law last week, alongside a streamlined way for fraud victims to win back possession of their property.
Gov. Andrew Cuomo last Wednesday signed the “Deed Theft Bill,” increasing protections for homeowners whose properties are in default or foreclosure. The bill prohibits practices including the harassment of financially distressed homeowners from unscrupulous “consultants” claiming to lend a hand, and also makes it easier for victims of fraud to regain their lost property.
The bill’s sponsors — State Sen. Velmanette Montgomery (D-Bedford-Stuyvesant-Red Hook) and Assemblymember Helene Weinstein (D-Flatlands-Sheepshead Bay) — first introduced the bill back in February. It passed in the state legislature in April.
“A district attorney can bring an action and find fraud, but there’s not been a way to get the homeowner’s home back. This allows the DA to get into court and have the illegal deed thrown out, and have the house restored to the owner,” said Weinstein in a public statement. “While it’s clearly good to lock somebody up, this voids the illegal transfer and allows the owner to get their home back.”
The new law would allow the district attorney to file a legal motion to void any property transfer or agreement if the buyer is convicted of fraud.
New York State Attorney General Letitia James said her office receives more deed theft complaints from Brooklyn than all the other boroughs combined.
According to James’s office, deed theft and fraud cases are highly concentrated in the areas of Bedford-Stuyvesant, Crown Heights, Flatbush and Brownsville. These Central Brooklyn neighborhoods are majority black, with an estimated 80 percent of individuals identifying as such in the 2000 Census, according to data from the Department of City Planning.
The neighborhoods are the frontlines of gentrification, with rising property values fueled by new, and often more affluent, residents. The changing marketplace makes vulnerable homeowners — particularly those facing financial pressures in retirement, or foreclosure — targets for fraud.
The new legislation will take effect immediately and expands upon the Home Equity Act of 2006. The measure strengthens laws regulating distressed property “consultants” who provide services — such as foreclosure modifications, property value assessment, financial planning, and loan consulting — to prevent property loss.
Fraudulent companies tend to target seniors, as well as homeowners struggling financially and property owners for whom English is not their first language, according to Montgomery’s office. Homeowners believe these companies will represent them honestly — but they often inadvertently sign away the deeds to their own homes, sometimes not realizing their mistake until years later.
Prior to the law, would-be scammers could approach embattled homeowners at all hours, insinuating affiliation with government agencies and threatening to disclose financial troubles. They might use this pressure to take “temporary” possession of a deed to negotiate their debts or help in a quick property sale. All of these practices will now be illegal under the new law.
In January, James sentenced a 49-year old woman for deed theft of two residential properties in Brownsville and East Flatbush, respectively. The same month, Brooklyn District Attorney Eric Gonzalez charged a man with stealing his elderly neighbor’s home and later trying to sell it off in East New York.
Just last month, longtime Bed-Stuy homeowner Darius Griffiths was allegedly targeted by a shady real estate company, August West Development. He claims to have been approached late at night, and talked into signing away his property while he was under the influence of alcohol. Griffiths at the time was facing financial hardship and had hoped the real estate company would be able to keep him afloat.
Griffiths had owned his three-story Brownstone for 30 years before supposedly losing it to a man named Eli Mashieh from August West. He signed away his home — worth more than $1 million, according to Griffiths’ daughter — for just $630,000.
The bill Cuomo signed into law last Wednesday would also prohibit would-be dealmakers from communicating with property owners “with such frequency or at unusual hours” that could constitute harassment.
“Thieves target our most vulnerable homeowners and snatch generations of wealth from our families,” said Montgomery after the bill signing. “For every one that thinks to call their elected officials or speak out, a dozen more do not know where to turn.”
Cuomo signed the bill as part of a larger package of homeowner protection legislation.
“These measures enact sweeping protections for homeowners and close loopholes in order to level the playing field and preserve the American Dream for New Yorkers in every part of this great state,” said the governor.
The bill also includes the following other protections against scams:
- Prohibiting abusive and deceptive behaviors such as impersonating law enforcement or government representatives, taking temporary ownership of a deed, or engaging in harassment of the homeowner or the homeowner’s family
- Eliminating the requirement that a homeowner post a bond in order to file a lawsuit to stop a deed transfer
- Prohibiting loan modification consultants from requiring upfront fees for services
- Extending the amount of time a homeowner has to rescind transactions with distressed property consultants from 5 days to 14 days
- Providing a clear legal path to restore the title of a property when there has been a criminal conviction based on fraudulent actions concerning a property transfer
Leave a Comment
Leave a Comment