Brooklyn Deed Fraud Crisis Sparks Public Attention, State Action
by Sofia Colosimo November 5, 2019
A recent article published in the New York Times highlighted the story of Broadies Byas, a Brooklyn homeowner fighting to reclaim her family home from a deed fraud scheme. The property, which had been in her family since 1957, is now worth nearly $1.2 million. After increasing pressure from a man who approached her claiming to work for a foreclosure assistance company, she signed away the deed for just 10% of its value. Now more than five years later, Ms. Byas is still working to resolve the cloud of uncertainty from the title of the property and to restore her name to the deed. As it turns out, Ms. Byas was just one of over 60 Brooklyn homeowners who were targeted by this particular scheme. Ms. Byas’s story is not unlike that of many clients who work with the City Bar Justice Center’s Homeowner Stability Project (HSP). Of the many predatory practices HSP encounters, deed fraud has become an imminent concern, affecting an ever-growing number of our clients.
Over 2500 reports of fraudulent deed activity have been recorded in New York City since 2014. A majority of the reports come from low-to-moderate homeowners in Brooklyn like the clients HSP serves. Neighborhoods like Bedford-Stuyvesant, Crown Heights, and Ridgewood are rapidly gentrifying, raising the cost of living and pushing long-time residents deeper into Brooklyn or out of the city entirely. Predatory real estate developers have fueled this widespread displacement, targeting homeowners in possession of valuable properties to satisfy the growing demand for housing.
Communities of color are disproportionately affected by gentrification and the predatory practices that fuel it. The legacy of redlining beginning in the mid-1930s and racially biased federal lending programs throughout the 1960s forced Black and Latinx homeowners into risky mortgages, leading to loan defaults and potential foreclosure. Today, homeowners in historically Black and Brown neighborhoods continue to feel the effects of these practices as predatory investors use the threat of foreclosure as a way to pressure homeowners into imprudent foreclosure rescue schemes and other scams. A 2018 Report from the Grand Jury of the New York State Supreme Court noted that homeowners with “distressed mortgages” who are dealing with foreclosure and estate issues are particularly vulnerable to deed fraud schemes.
Often times, homeowners do not realize that they have been a target of a deed fraud scheme. Many elderly or otherwise vulnerable homeowners facing foreclosure are regularly bombarded with calls and flyers from real estate and lending agencies offering to alleviate their financial burdens. Seemingly well-intentioned people may approach homeowners with contracts claiming to offer repair grants or other much needed services. With so much outreach, it can be difficult to differentiate the real offers from the fraudulent ones.
Here are some ways to protect your home from deed fraud and other scams:
- Register for the Notice of Recorded Document Program: Enroll in this program to receive alerts from the city if a document is recorded against your property.
- Check the public record online: You can access New York City’s Automated City Register Information System (ACRIS) for free online to check for any red flags – primarily deeds, mortgages or other documents recorded without your knowledge.
- Take a look at your property tax records: If you stop receiving or misplace your property tax bills, you can search for your property through the Department of Finance’s online portal to double check owner registration. Additionally, make sure you are up to date with your property taxes — this information is open to the public and can be used to target your property if you have unpaid property tax bills or may be at risk of a tax lien sale.
- Consult a legal professional: If an individual or organization approaches you with an offer regarding your home, review all documents with a trusted lawyer before signing anything.
- Look out for your family members and neighbors: Talk to the aging homeowners in your life and make sure they are aware of potential scammers who may target them. Volunteer to look over any documents they are given, assist in any important financial decisions and connect them with legal services if you suspect they have been the victim of a scam.
If you’re worried your property has been targeted or stolen through deed fraud or other scams, here are some steps you can take to begin to resolve the situation:
- Contact the Sheriff’s Department: You should report any instance of deed theft to the Sheriff’s Department for investigation. The Sheriff’s Bureau of Criminal Investigation is special unit dedicated to investigating financial crimes including deed fraud.
- Get a copy of the document: The Department of Finance recommends getting certified copy of the fraudulent document from the City Register’s Office but a copy from ACRIS is sufficient to start an investigation.
- Report to the District Attorney: Contact the District Attorney’s Office for the borough your property is located to report the crime.
- Reach out to the Department of Financial Services (DFS): Governor Cuomo recently announced that the New York State DFS will investigate deed fraud schemes in New York City, particularly in Brooklyn. The Governor recommends that homeowners victimized by deed fraud utilize the DFS foreclosure relief hotline for assistance by calling 1-800-342-3736.
Sofia Colosimo is the Project Coordinator for the City Bar Justice Center’s Homeowner Stability Project.
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