Protesters fight the eviction of longtime Bed Stuy homeowner Mary Ward in 2011
Con artists hiding behind untraceable LLCs are swindling longtime homeowners in Bed Stuy, Crown Heights and elsewhere out of their homes. In some cases, fraudsters lie to get homeowners to sign over the deed. In other cases, they simply forge signatures without the homeowner knowing a deed transfer has taken place — until it’s too late.
The thieves comb through public records to find homeowners who are behind on their mortgage payments and headed into foreclosure. These financially distressed homeowners may be more easily duped and less able to fight back against the fraud than others.
Frequently they are elderly or disabled, found an extensive report in The New York Times that looked at four cases, all of which turned out to be related.
Exhibit No. 1: Ozella Campbell, 75 years old, partially paralyzed and the owner of a home at 679 Jefferson Avenue in Bed Stuy that had been in her family for generations, signed over the deed to her house in exchange for two years of housing, an agreement that the new owner would pay off her delinquent mortgage, and $43,800. The lawyer legally required to oversee the transaction was provided by the buyer.
Now Campbell is essentially homeless — the “housing” is an unheated garage in Canarsie that is not legally habitable — and her mortgage was never paid off.
Four properties whose longtime owners were allegedly victims of deed theft. Photos by PropertyShark
The Times’ story recounts three other cases, including two in Bed Stuy and one in Crown Heights, at 1547 Fulton Street, 851 Lincoln Place and 689 Greene Avenue (the properties are pictured above). The alleged swindlers were the same in all four cases, although the LLCs they hid behind were different.
None of this will be news to those living in central Brooklyn or to longtime Brownstoner readers. The solicitations from shady companies arrive in the mailbox almost daily. Most promise quick, all-cash closings.
Some pretend to be agencies authorized by President Obama to help out homeowners in danger of losing their homes to foreclosure. Emissaries knock on doors asking homeowners if they want to sell or if they know of anyone who does.
Longtime readers may recall protests in 2011, pictured above, over the eviction of longtime Bed Stuy homeowner 82-year-old Mary Ward from her house at 320 Tompkins Avenue. The owner attempted to refinance with a cash out but never received the money. Instead, the predatory subprime lender — who was convicted in court on other charges in other cases — allegedly took title to the house without compensating Ward or paying off her mortgage. It resold the house, and the new buyer attempted to evict Ward.
Community groups such as Brownstoners of Bed Stuy hold outreach to educate homeowners about how to avoid fraudulent deed transfers. Brooklyn Borough President Eric Adams and Attorney General Schneiderman held a Brooklyn homeowners forum last month to educate communities on deed theft and mortgage scams, as Brownstoner reported.
In these times of high valuations and rapidly escalating prices, the best way to sell a house — for the owner to get the most money from the transaction, that is — is to put it on the market with a well-known retail real estate company.
There are hundreds of such fraudulent cases, and they are overwhelming the system, according to the Times. But the labyrinth of LLCs makes it extremely difficult to find and prosecute the fraudsters.
The Department of Finance is currently looking into 120 such cases. Black and Hispanic homeowners are disproportionately affected, according to a 2014 study by the Lawyers’ Committee for Civil Rights Under Law and the Center for NYC Neighborhoods cited by the Times.
While the City has claimed to be counteracting problems created by LLCs, it is not doing enough, according to the Times report. The city dropped a plan to register true owners in real estate transactions. A new plan will require notaries be fingerprinted, but how that would stem deed fraud is not clear.
As for Mary Ward, she received a stay from eviction and local politicians were looking into her case. But things may have turned out badly for her. A look at the deed history shows an LLC sold the house to another LLC for $900,000 in August of this year.
[Source: NYT | Top photo: Brownstoner]