Officials pushing new bills, policies, awareness for Victims of City’s Rampant Deed Fraud Abuse
City deed rooms – and policies — may match the streets as the sites of some of the nation’s most heinous “bait and switch” crimes of theft
African-American and Latino former and current property owners living in some of the “coolest” areas of Brooklyn, New York, for instance, have been the primary victims of “deed fraud”. They have been maneuvered by white-collar mobsters into parting with their properties, or straight out robbed by the finagling’s of fraudsters – coming in from all around the world – who replace the property owners’ name with their criminal-own.
But community leaders like Councilman Robert Cornegy are saying “enough is enough” of this deed fraud rampage that’s crippling the very foundations of the American Dream. Next week, Our Time Press covers Cornegy’s work on this and other issues.
This week, the City Council Finance Committee held a hearing with the Commissioner of the
Department of Finance, the City Registrar and the Sheriff “to learn more about how real property deed fraud affects New York City property owners and the efforts being made to combat it”.
It was an open hearing where members of the public and government agencies were invited to testify on the issue.
A report issued by the City Council and available on the Internet, offers some detailed background on the rise in “the occurrence of real property scams such as real property deed fraud”.
They also shared the DOF’s view that, “The results of these scams can be devastating to homeowners who may already be struggling under the weight of an impending foreclosure or a death in the family, both financially and emotionally as they realize that the home they thought they owned may now belong to someone else”.
The report cited the rise in New York’s property values as a cause for such criminal acts “which makes schemes to obtain real property even more lucrative for fraudsters and criminals”.
It reveals that most “deed fraud” and property scam incidents are occurring amongst African-Americans and Latinos in the New York City metropolitan area, primarily Brooklyn, Queens and The Bronx. And they “have suffered greater financial losses per scam than their white homeowner counterparts, further stating that “despite owning 80 percent of the homes in New York State, white owners comprised only 39 percent of reported scam victims. By contrast, African-American homeowners comprised 30 percent of mortgage rescue scam victims in New York State (while only representing eight percent of total homeowners) and Latino homeowners comprised 20 percent of scam victims (constituting six percent of total homeowners).1
“According to the data collected by the Lawyers’ Committee, the older the homeowner in New York State, the greater the average loss.”
The report further admits that these scams can be difficult to “investigate and prosecute” particularly when it may be difficult to find the proper owner of the property once the scam has rolled on for years.
While the report on the deed fraud is extensive, clear, detailed and well-supported by footnotes, it makes clear a problem the affected homeowners have known for decades: The powers of the Department of Finance to help them, especially in the past, have been “limited”.
The report notes that the DOF’s two offices “that have authority over deeds and combatting deed fraud are the City Registrar, the recorder and maintainer of a database of all property records including deeds, and the City Sheriff, the entity that “investigates cases of alleged deed fraud and, when appropriate, makes arrests”.
It further states that there’s a catch-22 for the affected property owner. “Pursuant to State statute, every conveyance presented to the City Registrar must be recorded, so long as the written instrument being recorded has the appropriate signatures and is notarized or otherwise appropriately witnessed and that all fees have been paid.
“The New York State Court of Appeals has found that, so long as these requirements are satisfied, the City Registrar has no discretion in whether to record a written instrument – doing so is merely a ‘ministerial duty’. This is true even where the City Registrar may identify that the deed may be fraudulent.”
The Department of Finance’s recent efforts to combat real property deed fraud includes the implementation of a free Notice of Recorded Document Program which “alerts registered property owners when documents are recorded without their knowledge”. It also “will allow them to take steps to limit the harm caused by the recording of a fraudulent document”.
“Deed holders or newly recorded deeds are automatically enrolled in the program, while deed holders who already held recorded deeds at the time of the program’s implementation may elect to register for the program.”
In other measures, the DOF “is sponsoring three pieces of state legislation intended to prevent deed fraud. The first is a bill that would require that all real property conveyances requiring a deed be recorded. The second bill would require that notaries public be fingerprinted. The third bill would allow DOF to remove a deed from the record where the sheriff’s investigation reveals it to be fraudulently filed because, currently, the sheriff can investigate and even make arrests but the City Registrar cannot legally remove a deed from the record”.
Ultimately, it is up to the affected homeowners to speak up and continue to fight for their rights. According to Rozario and Associates (Attorneys at Law), in the accompanying article, they have some justice on their side. The statute of limitations does not run out for forgery of a name on a deed: yesterday, five years ago or 50 years ago. And if you’ve been in foreclosure for six years, the statute of limitations says the case can be dropped.
But it’s good to have an ombudsman to step in, particularly one who grew up in the neighborhood and has witnessed neighbors losing their properties and thus their lives. Such a one is Councilman Robert Cornegy. An interview with Cornegy on the issue of deed fraud and other housing issues appears next week. (Bernice Elizabeth Green)