Consumer Alert: Avoid the latest real estate scam
May 2017 | By Beth Moretti, Esq.In an effort to provide transparency in local real estate markets, New York City made it possible to view deeds, mortgages and other transfer documents online. This has resulted in the latest scam where thieves use this information for their own gains.
The thieves use the details they get from these documents to then obtain additional information such as the homeowner’s birth date, Social Security number and whether the property has any liens against it; they can then use that information to impersonate the homeowner and create a new fake deed transferring the property to a new buyer.
In most cases, the scammers will take several down payments from several different buyers but only “sell” the property once. It is suspected that the deed thieves have a ring of insiders – fraudulent notaries, title companies and even attorneys – who all share a piece of the pie once they have duped the unsuspecting rightful homeowners out of their most prized possession.
Take the case of Ozella Campbell, who was recently featured in a major New York Times article that helped shed light on the scam. Ms. Campbell is a Bedford-Styvesant brownstone homeowner who was tricked into signing over the deed to her house.
Like many other victims, Ms. Campbell was behind in her mortgage payments when she saw an ad for a company that promised to hire an attorney for her, pay off her delinquent mortgage, provide a place for her to live for two years, pay her $43,800 and close in seven days.
In return, Ms. Campbell would just need to sign over the deed to her house. The scammers never delivered on their promises and in fact pad locked Ms. Campbell’s home.
That wonderful “place” where she would live for two years turned out to be an unheated illegal garage apartment, deemed “too dangerous to inhabit” by the New York City Buildings Department. As a result of the scam, Ms. Campbell was left with nothing but a delinquent mortgage of over $500,000 and no place to live.
There are a variety of schemes used by these white collar criminals to steal properties from innocent homeowners. They take advantage of the secrecy afforded to Limited Liability Companies (LLCs) to carry out their scams.
By using shell companies to purchase prized real estate, the scammers conceal the ownership of the real estate – making it very difficult for authorities to prosecute the crime.
Deed thieves prey on vulnerable homeowners – senior citizens, disabled adults and those on the brink of foreclosure (information they obtain by scanning legal notices for delinquent mortgages). They then trick desperate homeowners into signing over their property while the homeowners believe they are getting financial relief.
In many up and coming areas, a hot real estate market makes the crime even easier. To entice buyers, the scammers usually price the properties below market value, which puts pressure on them to make hasty decisions.
This was the plight of Ms. Campbell when she fell into financial hardship and out of desperation signed away her deed with the hope of having her heavy financial burdens lifted. Instead, she was put into a far worse position – being displaced from her long-time home and still owing a hefty mortgage.
These scams have been ravaging many New York City neighborhoods where real estate prices have been increasing dramatically. Huge jumps in real estate values and lax standards for property transfers help aid the scammers.
As the Wall Street Journal reported, the Manhattan District Attorney’s Office points the finger at the online availability of real estate records, calling the scam an “epidemic” in New York City – a noble purpose (transparency) turned into one-stop shopping for fraud by the scammers.
The news isn’t all bad though. As a result of this rampant scam, the New York City Department of Finance has begun notifying property owners automatically whenever a new deed is recorded for their property.
Appalled by the findings contained in the New York Times article mentioned above, the New York City Finance Commissioner instituted a requirement that all members of LLCs be disclosed to the city for tax auditing purposes when deeds are transferred. The Mayor’s office also sponsored state legislation geared toward the prevention of deed theft.
As a homeowner, the main thing to remember is due diligence. Always hire your own attorney and use a reputable title company. Check your deed status regularly, and remember to use online resources to check out any company you’re considering.
If someone is forcing you to make a decision under pressure or out of financial desperation – STOP! That should immediately raise a red flag. Take the time to think it over and discuss it with someone you trust. If you’re being offered something that sounds too good to be true, it usually is. Don’t fall prey to empty promises that could cost you your home.
To find out more about how you can protect yourself from falling victim to this scam or report a suspected deed fraud, contact the New York State Attorney General’s Homeowner Protection Program Hotline by calling toll-free 855-HOME-456 (855-466-3456) or visit AGScamHelp.com.
The thieves use the details they get from these documents to then obtain additional information such as the homeowner’s birth date, Social Security number and whether the property has any liens against it; they can then use that information to impersonate the homeowner and create a new fake deed transferring the property to a new buyer.
In most cases, the scammers will take several down payments from several different buyers but only “sell” the property once. It is suspected that the deed thieves have a ring of insiders – fraudulent notaries, title companies and even attorneys – who all share a piece of the pie once they have duped the unsuspecting rightful homeowners out of their most prized possession.
Take the case of Ozella Campbell, who was recently featured in a major New York Times article that helped shed light on the scam. Ms. Campbell is a Bedford-Styvesant brownstone homeowner who was tricked into signing over the deed to her house.
Like many other victims, Ms. Campbell was behind in her mortgage payments when she saw an ad for a company that promised to hire an attorney for her, pay off her delinquent mortgage, provide a place for her to live for two years, pay her $43,800 and close in seven days.
In return, Ms. Campbell would just need to sign over the deed to her house. The scammers never delivered on their promises and in fact pad locked Ms. Campbell’s home.
That wonderful “place” where she would live for two years turned out to be an unheated illegal garage apartment, deemed “too dangerous to inhabit” by the New York City Buildings Department. As a result of the scam, Ms. Campbell was left with nothing but a delinquent mortgage of over $500,000 and no place to live.
There are a variety of schemes used by these white collar criminals to steal properties from innocent homeowners. They take advantage of the secrecy afforded to Limited Liability Companies (LLCs) to carry out their scams.
By using shell companies to purchase prized real estate, the scammers conceal the ownership of the real estate – making it very difficult for authorities to prosecute the crime.
Deed thieves prey on vulnerable homeowners – senior citizens, disabled adults and those on the brink of foreclosure (information they obtain by scanning legal notices for delinquent mortgages). They then trick desperate homeowners into signing over their property while the homeowners believe they are getting financial relief.
In many up and coming areas, a hot real estate market makes the crime even easier. To entice buyers, the scammers usually price the properties below market value, which puts pressure on them to make hasty decisions.
This was the plight of Ms. Campbell when she fell into financial hardship and out of desperation signed away her deed with the hope of having her heavy financial burdens lifted. Instead, she was put into a far worse position – being displaced from her long-time home and still owing a hefty mortgage.
These scams have been ravaging many New York City neighborhoods where real estate prices have been increasing dramatically. Huge jumps in real estate values and lax standards for property transfers help aid the scammers.
As the Wall Street Journal reported, the Manhattan District Attorney’s Office points the finger at the online availability of real estate records, calling the scam an “epidemic” in New York City – a noble purpose (transparency) turned into one-stop shopping for fraud by the scammers.
The news isn’t all bad though. As a result of this rampant scam, the New York City Department of Finance has begun notifying property owners automatically whenever a new deed is recorded for their property.
Appalled by the findings contained in the New York Times article mentioned above, the New York City Finance Commissioner instituted a requirement that all members of LLCs be disclosed to the city for tax auditing purposes when deeds are transferred. The Mayor’s office also sponsored state legislation geared toward the prevention of deed theft.
As a homeowner, the main thing to remember is due diligence. Always hire your own attorney and use a reputable title company. Check your deed status regularly, and remember to use online resources to check out any company you’re considering.
If someone is forcing you to make a decision under pressure or out of financial desperation – STOP! That should immediately raise a red flag. Take the time to think it over and discuss it with someone you trust. If you’re being offered something that sounds too good to be true, it usually is. Don’t fall prey to empty promises that could cost you your home.
To find out more about how you can protect yourself from falling victim to this scam or report a suspected deed fraud, contact the New York State Attorney General’s Homeowner Protection Program Hotline by calling toll-free 855-HOME-456 (855-466-3456) or visit AGScamHelp.com.