Wednesday, April 26, 2017

NY AG Official On Growing Deed Theft, Home Equity Ripoff Proliferation: "[Real Estate] Scammers Are No Longer Content w/ Stealing $5,000. Now They Want The Whole House!"

The Associated Press reports:
  • [A]round the U.S., deed theft has emerged as one of the most sophisticated and devastating frauds ever to menace homeowners. Foreclosure "rescue" scams that have stolen thousands of dollars from individual homeowners in the years since the housing collapse have been pushed by savvy perpetrators to their limit. They use lies to convince the desperate to sign over their title, then force them into homelessness or a years-long legal battle.

    "The scammers are no longer content with stealing $5,000. Now they want the whole house," said Dina Levy, who heads the Homeowner Protection Program in the New York attorney general's office, which has spread word about deed theft and prosecuted culprits.

    Although there are no firm numbers on how many cases of deed theft have occurred, they have been reported around the U.S., particularly in markets that have rebounded from the housing crisis or in neighborhoods that are gentrifying.

    "It's growing, absolutely," said Kristen Clarke, who heads the Lawyers' Committee for Civil Rights Under Law, a nonprofit that has researched foreclosure-related fraud. "We're beginning to see these scammers operate in a far more bold way."

    — In San Diego, federal prosecutors netted a guilty plea and a six-year prison sentence last year for a man who forged deeds on at least 15 homes, then quickly sold them to the surprise of unwitting owners. The ringleader of what investigators called a "tangled web of deceit" netted about $2.2 million in the scheme. Buyers coaxed into purchasing the homes were left with worthless claims to titles.

    — In Detroit, the Wayne County Register of Deeds is looking to expand its mortgage and deed fraud unit to deal with a crush of cases. The problem is so severe the office runs a round-the-clock property fraud hotline and has a marked deed-theft patrol car used by investigators following up on tips. Investors in Kuwait, Australia and the United Kingdom looking to capitalize on Detroit's resurgence are among those who have been caught up in scams.

    — In Indianapolis, Crystal Francis, an attorney with Indiana Legal Services, tells of deed theft cases sprinkled throughout the area in recent years, with elderly people the preferred targets. One woman victimized by a scam while in the throes of a liver problem and dialysis treatment was overcome with shame. She couldn't muster the strength for a protracted legal fight, choosing to simply walk away from her longtime home and move in with a friend. "She was so discouraged," Francis said. "She just concluded it was too much."

    The problem has been gravest in New York, particularly the ever-pricier neighborhoods of Brooklyn. The New York sheriff's office has taken a lead on the cases and since 2014, the office has amassed more than 1,700 complaints, with hundreds under investigation, and some 32 arrests already tallied.

    The cases can take investigators years to solve. Sheriff Joseph Fucito points to a graphic of a single case, a snare of lines representing the three partners at the center of the probe, and their ties to 110 different companies and 189 properties. In this case, like many others, Fucito said the perpetrators did a mix of above-board and fraudulent business through a series of limited-liability companies, leaving it to detectives to pinpoint victims.

    "Some of it's legitimate, some of it's not legitimate, and we have to pick through it," Fucito said. "But all of it smells funny."

    The sheriff ticks off the ways the thefts happen, from opportunists cobbling together documents on vacant properties to those transferring the home of an unwitting family member into their name, to fake housing assistance businesses that prey on those in financial crisis.

    Cases in that final category are the hardest to prove, and the toughest to undo. Companies use misrepresentations to get a home signed over to them and often use licensed professionals to notarize and file legal documents.

For more, see Foreclosure scams are stealing victims' homes (Around the U.S., deed theft has emerged as one of the most sophisticated and devastating frauds ever to menace homeowners).

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