Saturday, November 29, 2014

Death Knell For Bankruptcy Strip-Offs Of Completely Underwater 2nd Mortgages?

Professor Bob Lawless writes on Credit Slips:

Probably No Strip-Offs After Supremes Rule
  • The headline for this post will be mysterious and perhaps slightly salacious in a general newsfeed, but bankruptcy experts will know it means the time is nigh in the 11th Circuit for lien strip-offs. The Supreme Court agreed to hear Bank of America v. Caulkett and Bank of America v. Toledo-Cardona, where the 11th Circuit allowed lien strip-offs of wholly underwater junior mortgages in a chapter 7. The Supreme Court case of Dewsnup v. Timm would seem to hold otherwise, but the 11th Circuit ruled Dewsnup applied only to partially underwater mortgages. Hence, the 11th Circuit believe it was bound by its own pre-Dewsnup precedent allowing strip-offs for wholly underwater junior mortgages.

    I like the 11th Circuit rule as a matter of policy, but I have to believe that as a matter of precedent, the Supreme Court is almost certain to reverse.

Friday, November 28, 2014

Landlord/Operator Of Gov't-Approved Supportive Housing Program For Homeless & Disabled Vets Tagged With Fair Housing Complaints; Management Allegedly "Segregated The Blacks From The Hispanics From The Whites" Until Catching Wind Of HUD Grievances; Then Began "Shuffling" Whites, Blacks Throughout Bldg., Says Renters' Advocate

In Denver, Colorado, The Denver Post reports:
  • For Anthony Mitchell, the Fourth Quarter Residences were a godsend, a low-rent haven for homeless and disabled veterans at a time when he and his wife were living in their car.

    Now, more than three years after residents began moving into the 36-unit complex, he and others describe a building where security is so lax that neighborhood drug addicts and prostitutes move freely through the halls, and strangers sleep in the stairwells.

    Handicapped bathrooms on the first floor are often locked, and tenants don't have access to stairs that lead between floors. Mitchell and others whose medications cause incontinence sometimes soil themselves before they can get back to their apartments.

    "In the beginning, it was lovely. It has turned into a huge crack house," said Mitchell, a veteran of the first Gulf War.

    Mitchell is among 11 tenants of the complex in Five Points who have filed Fair Housing complaints with the U.S. Department of Housing and Urban Development against Fourth Quarter Partners LLLP, the owner, and Burgwyn Residential Management Services.

    The building is part of a supportive housing program for chronically homeless veterans that combines HUD rental assistance and Veterans Affairs' long-term case-management services to help homeless veterans.

    Among the complaints: Only African-American tenants were relegated to the fourth floor, and a property manager allegedly referred to the floor as "the black four."

    Mitchell was among them. When he first moved into the building, he and his wife lived in an apartment on the second floor, he said. Not long after their move, management asked him to move to the fourth floor, giving him only one day to vacate. When he objected, he was told he could move or be evicted.

    "The 4th floor was full (all Black) when Anthony Mitchell moved in. He was placed on the second floor. When a room opened up on the 4th floor he was ordered to move up to that floor. They segregated the Blacks from the Hispanics, from the Whites," Gary Lacefield of Lacefield & Coleman Fair Housing Advocates, the firm handling the complaint, said in an e-mail.

    Once word got out that tenants were filing complaints, the landlord began "shuffling" white and black residents to different apartments, Lacefield said.
  • VA spokesman Daniel W. Warvi said Fourth Quarter is among the many community providers it works with as part of its goal to end veteran homelessness by 2015.

    "While VA has a duty to review the care provided to our veterans by these community providers," he said, "the day-to-day operations of these facilities must be the responsibility of the providers themselves."

Thursday, November 27, 2014

Court OKs Gov't Use Of Eminent Domain To Snatch Elderly Man's Atlantic City Home Of 45 Years, Even Without Any Specified Purpose For The Property; Victim, Counsel Say Appeal Will Follow

In Atlantic City, New Jersey, The New York Times reports:
  • Charlie Birnbaum will have to go to a higher court to defend his parents’ home in Atlantic City, which he wanted to keep as something of a shrine.

    Superior Court Judge Julio L. Mendez ruled on Monday that New Jersey’s Casino Reinvestment Development Authority, charged with developing the gambling and tourism industries in Atlantic City, had broad leeway to exercise eminent domain and could take the property if it felt there would be a better use that would enhance the city.

    In a telephone interview, Mr. Birnbaum described the decision as “gut-wrenching.”

    “I’m disappointed that a chapter of our lives may be over,” he said.

    But he said that the Institute for Justice, a nonprofit, libertarian-leaning law firm that has challenged other eminent domain proceedings, wanted to appeal to an appellate court and then to the state’s Supreme Court and that he would go along with the firm’s decision. The judge said he would not allow the development authority to take the property for 45 days, effectively giving Mr. Birnbaum’s lawyers time to appeal.

    Mr. Birnbaum, 67, a piano tuner who has done work for Frank Sinatra and Tony Bennett as well as almost every casino in Atlantic City, uses the ground-floor apartment once occupied by his parents at 311 Oriental Avenue as his workshop. But to him it is more important as a reservoir of memories. His parents, Holocaust survivors who lived in the building for 30 years, found comfort in the house, the ocean and the beach, Mr. Birnbaum said.

    The casino development authority included the building two years ago in a plan to create a tourism district to invigorate Atlantic City’s fortunes as a gambling resort. Almost every owner of the 62 low-rise buildings and empty parcels accepted the prices offered. But Mr. Birnbaum turned down an offer of $237,000, saying he would not give up the house for any amount.

    He said the authority had no right to take property without identifying a specific intended purpose. But Judge Mendez ruled that the authority needed only a general rationale of turning the area into a tourism district, so broad were the powers the State Legislature had given it.
Source: Setback in Atlantic City for Man Hoping to Save Parents’ Home.

For the trial court's ruling, see Casino Reinvestment Development Authority v. Birnbaum, (N.J. Super, Ct. Law Division, November 17, 2014).
See also:

Wednesday, November 26, 2014

Expiring Statute Of Limitations Leaves New Jersey Homeowner With Free & Clear Home While Foreclosing Lender Left Holding The Bag

In Newark, New Jersey, reports:
  • In what may be a first in New Jersey, a Morris County man who defaulted on his $520,000 mortgage in 2007 has instead won the right to retain ownership of his house, according to court records.

    Earlier this month, Gordon A. Washington of Madison won a challenge against creditors Specialized Loan Servicing LLC and Bank of New York Mellon to collect the debt, saying they failed to file a viable foreclosure complaint within a six-year statute of limitations.

    In his written opinion, Judge Michael B. Kaplan repeatedly expressed his reluctance to nullify the mortgage agreement — stating he did so with a "figurative hand holding the nose" — but, nonetheless, he ruled in favor of Washington by voiding the mortgage lien.

    "The debtor retains the property, free of any claim of the defendants," Kaplan wrote in his Nov. 5 decision. "The court will proceed to gargle in an effort to remove the lingering bad taste."(1)

    Earlier this year, the percentage of New Jersey homes in foreclosure rose to the highest rate in the nation.

    Montclair lawyer Margaret Jurow told The Record, which first reported the court's decision early Saturday morning, that this was the first case she was aware of in which the court applied the statute of limitations to the correction of a mortgage loan, and that borrowers can generally only hope for a modification of the loan to get a lower down payment.

    The newspaper reported that it wasn't able to determine Friday if Washington's creditors intended to appeal the decision.

    Washington's attorney, Walter Nealy, told NJ Advance Media Saturday afternoon the decision spoke for itself and that Washington's bankruptcy proceedings were ongoing.
Source: Morris County man facing foreclosure beats creditors, takes ownership of house.

Thanks to Deontos for the heads-up on the story.

(1) "The maxim has long been recognized that equity aids the vigilant, not those who sleep on their rights." Brick Plaza, Inc. v. Humble Oil & Refining Co., 218 N.J. Super. 101, 526 A.2d 1139 (App. Div.1987) (citing Stout v. Seabrook's Executors, 30 N.J. Eq. 187, 190-191 (Ch. 1878), aff'd o.b. 32 N.J. Eq. 826 (E. & A. 1880)). The lender, and its assignors (if any) had six years to successfully enforce their rights, What does this judge not get? A judge who sympathizes with plaintiff/financial institutions who slept on their rights for six years in a foreclosure case is a judge having no business presiding over foreclosure cases. I extend my sympathy to those homeowner/defendants who regrettably get stuck with Judge Kaplan presiding over their foreclosure cases. Hopefully, they'll have counsel versed in the appellate process because prevailing in such a foreclosure action may require a trip to an appellate court to reverse an unfavorable trial court ruling.

Tuesday, November 25, 2014

WV Supremes OK Foreclosed Homeowner's Use Of 'Fair Market Value Defense' When Determining Deficiency Judgment; Court Overrules Its Prior Precedent That Mandated Automatic Use Of Auction Sale Price In Calculation; Ruling Will Lead To Less Lender Windfalls, Lower Post-Foreclosure Liability For Property Owner

From an Opinion Summary from Justia US Law:
  • Defendants defaulted on their obligation to Plaintiff, who had loaned them $200,000 secured by a first deed of trust on real property they owned. Plaintiff subsequently purchased the subject property at a trustee’s sale and then filed the instant lawsuit seeking a deficiency judgment for the unpaid balance of Defendants’ promissory note.

    The circuit court entered summary judgment in favor of Plaintiff and awarded Plaintiff post-judgment interest on this award. Defendants appealed, arguing that the deficiency judgment was too high and should have been adjusted to reflect the fair market value of their property when it was sold at the trust deed sale.

    The Supreme Court reversed, holding that a trust deed grantor may assert, as a defense in a lawsuit seeking a deficiency judgment, that the property was sold for less than its fair market value at the trust deed foreclosure sale.
Source: Justia Opinion Summary - Sostaric v. Marshall (Signed Opinion).

For the court ruling, see Sostaric v. Marshall, No.14-0143 (W.V. November 12, 2014)

Editor's Note: This court ruling provides a handy primer on the statutes and case law governing the calculation of deficiency judgments in foreclosure actions in that the West Virginia Supreme Court examines and considers:
  1. the majority view of other jurisdictions that permit the sale price of foreclosed property to be challenged in a deficiency judgment lawsuit;(1) and
  2. West Virginia's statutory law on trust deed foreclosure sales, as well as its earlier binding precedent in Fayette County. National Bank v. Lilly, 199 W.Va. 349, 484 S.E.2d 232 (1997) which it now overrules.
For stare decisis fans, the opinion also sets forth the basis used by the majority for deviating from its prior precedent, and includes a vigorous dissenting opinion by Chief Justice Robin Jean Davis, who argued against violating prior precedent, explaining why:
  • the case was absent of any compelling justification for doing so, and
  • any change of the prevailing law requires legislative, not judicial, action.


(1) Buried in footnotes 11 and 12 of the ruling is the following collection of statutes that the court describes as the majority rule governing the calculation of post-foreclosure deficiency judgments in other states:
  • Footnote 11:

    Statutes that define the deficiency as the difference between the mortgage obligation and the "fair value" of the foreclosed real estate include the following: Ariz. Rev. Stat. § 33-814 ("fair market value" as of the date of sale); West's Ann. Cal. Code Civ. Proc. §§ 580a ("fair market value" as of date of sale in power of sale foreclosure), 726(b) ("fair value" as of sale date in judicial foreclosure); Colo. Rev. Stat. Ann. § 38-38-106 ("fair market value"); Conn. Gen. Stat. Ann. § 49-14(a) ("actual value" as of date title vested in mortgagee in strict foreclosure); Ga. Code Ann. § 44-14-161 ("true market value" as of sale date); Idaho Code § 6-108 ("reasonable value"); Kan. Stat. Ann. § 60-2415 ("fair value"); Me. Rev. Stat. Ann. tit. 14, § 6324 ("fair market value" at time of sale); Mich. Comp. Laws Ann. § 600.3280 ("true value" at time of sale); Minn. Stat. Ann. § 582.30, subd. 5(a) ("fair market value"); Neb. Rev. Stat. § 76-1013 ("fair market value" as of sale date); Nev. Rev. Stat. §§ 40.455-40.457 ("fair market value" as of sale date); N.J. Rev. Stat. § 2A:50-3 ("fair market value"); N.Y. Real Prop. Acts. § 1371 ("fair and reasonable market value" as of sale date); N.C. Gen. Stat. § 45-21.36 ("true value" as of sale date); N.D. Cent. Code §§ 32-19-06, 32-19-06.1 ("fair value"); Okla. Stat. Ann. tit. 12, § 686 ("fair and reasonable market value" as of sale date); Pa. Stat. Ann. tit. 42, § 8103 ("fair market value"); S.C. Code Ann. § 29-3-700 et seq. ("true value"); S.D. Codified Laws Ann. § 21-47-16 ("fair and reasonable value"); Tex. Prop. Code Ann. § 51.003 ("fair market value" as of sale date); Utah Code Ann. § 57-1-32 ("fair market value"); Wash. Rev. Code Ann. § 61.12.060 ("fair value"); Wis. Stat. Ann. § 846.165 ("fair value").

    Footnote 12:

    In many jurisdictions, the court must conduct a hearing as to value and apply the "fair value" amount in computing a deficiency even though the deficiency defendant fails to request it. See, e.g., Idaho Code Ann. § 6-108; Neb. Rev. Stat. § 76-1013; Nev. Rev. Stat. § 40.457; Okla. Stat. Ann. tit. 12, § 686; Pa. Stat. Ann. tit. 42, § 8103.

    Other states place the burden on the deficiency defendant to raise the "fair value" defense. See, e.g., Kan. Stat. Ann. § 60-2415; Me. Rev. Stat. Ann. tit. 14, § 6324; Mich. Comp. Laws Ann. § 600.3280; N.C. Gen. Stat. § 45-21.36; N.J. Rev. Stat. § 2A:50-3; and Tex. Prop. Code Ann. § 51.003.
Buried in Footnotes 16 and 17 of the ruling, the court finds support for allowing a foreclosure defendant to assert a fair market value defense by including excerpts of a dissenting opinion in a Missouri case (a state which does not permit the fair market value defense), in which the dissenting judge makes a compelling (albeit unsuccessful) argument in favor of a foreclosed property owner getting credit for the full fair market value of the property foreclosed as an offset to the loan obligation when calculating the deficiency:
  • Footnote 16:

    The Missouri Supreme Court considered this issue and, like Lilly, followed the minority rule that does not permit a deficiency defendant to assert a fair market value challenge following a foreclosure sale. Missouri Chief Justice Richard B. Teitelman dissented to the court's ruling and discussed why denying a deficiency defendant the opportunity to present a fair market value challenge is inconsistent with the general purpose underlying a damage award:

    The purpose of a damage award is to make the injured party whole without creating a windfall. Accordingly, in nearly every context in which a party sustains damage to or the loss of a property or business interest, Missouri law measures damages by reference to fair market value. Yet in the foreclosure context, Missouri law ignores the fair market value of the foreclosed property and, instead, measures the lender's damages with reference to the foreclosure sale price. Rather than making the injured party whole, this anomaly in the law of damages, in many cases, will require the defaulting party to subsidize a substantial windfall to the lender. Aside from the fact that this anomaly long has been a part of Missouri law, there is no other compelling reason for continued adherence to a measure of damages that too often enriches one party at the expense of another. Consequently, I would hold that damages in a deficiency action should be measured by reference to the fair market value of the foreclosed property.

    First Bank v. Fischer & Frichtel, Inc., 364 S.W.3d 216, 224-25 (Mo., 2012) (C.J. Teitelman, dissenting).

    Footnote 17:

    In response to a bank's argument that allowing a defendant to present a fair market value challenge in a deficiency judgment proceeding could negatively affect banking institutions, one court noted:

    First Bank argues that changing to the fair market value approach will place all the risk in the foreclosure process onto the lender. This argument is not persuasive. By focusing only on the foreclosure process, First Bank deflects consideration of the risk management techniques available to lenders when the loan is made. A lender compensates for risk by charging an interest rate that is set both by the financial markets and by the lender's assessment of the borrower's creditworthiness. The lender also manages risk by appraising the fair market value of the property to ensure that the loan is adequately secured. Changing to a fair market value approach certainly would lessen the lender's chance of a large windfall and would mean only that First Bank, like the borrower, is losing or gaining money based on fair market value of property. The risk of loss is part of the risk of lending. That risk of loss should not be borne solely by the borrower and then amplified by measuring the deficiency by reference to the foreclosure sale price.
First Bank v. Fischer & Frichtel, Inc., 364 S.W.3d 216, at 228 fn. 5 (Mo., 2012) (C.J. Teitelman, dissenting).

Contained in the footnotes of the ruling in First Bank v. Fischer & Frichtel, Inc., is a useful collection of statutes and case law of other states on the issue of post-foreclosure deficiency judgments.

Monday, November 24, 2014

NYS High Court To Rogue Bankruptcy Trustees, Greedy Creditors: Hands Off 80-Year Old Widow's Rent Regulated Home Of 50 Years; Declares Those Leases To Be "Public Assistance Benefit" Exempt From Creditors' Claims Under State Law

In New York City, The New York Times reports:
  • In a decision with implications for millions of tenants, New York State’s highest court ruled Thursday that a lease for a rent-regulated apartment is a public benefit and cannot be seized as an asset in a personal bankruptcy.

    In a 5-to-2 vote, the Court of Appeals said that a rent-stabilized lease was exempted from a bankruptcy estate as a public assistance benefit, just like disability or unemployment benefits. Bankruptcy lawyers in New York who were closely monitoring the case said that not keeping the lease off limits would have made it easier for landlords to evict rent-stabilized tenants if they file for bankruptcy, even when they pay their rent.

    The case involved Mary Veronica Santiago, an 80-year-old widow in the East Village of Manhattan whose landlord, who was not one of her creditors, offered to buy her rent-stabilized lease and produce the money to pay off her debt of about $23,000. The bankruptcy trustee in charge of marshaling her assets, John S. Pereira, accepted the offer but Mrs. Santiago’s lawyers, fearing her eventual eviction despite an agreement to let her stay in the unit, challenged that decision.

    After both a bankruptcy court and a Federal District Court sided with the bankruptcy trustee, Mrs. Santiago appealed to the United States Court of Appeals for the Second Circuit. The federal court deferred to the state court as the final authority on the question of whether the lease should be exempt under New York law.(1)

    Mrs. Santiago’s case was the first time an appellate court in New York had ruled on whether the leases should be exempt.

    “When the rent-stabilization regulatory scheme is considered against the backdrop of the crucial role that it plays in the lives of New York residents, and the purpose and effect of the program,” Judge Sheila Abdus-Salam wrote for the majority, “it is evident that a tenant’s rights under a rent-stabilized lease are a local public assistance benefit.”

    “Affordable housing,” the majority said, “is an essential need.”

    Also voting with the majority were Chief Judge Jonathan Lippman and Judges Eugene F. Pigott Jr., Victoria A. Graffeo and Jenny Rivera.

    Both the state and New York City regarded the case as posing a major risk to New Yorkers who seek bankruptcy protection and happen to live in rent-stabilized apartments, and threw their weight behind Mrs. Santiago. In a brief filed jointly in September, the New York attorney general’s office and the city’s Law Department argued that treating a lease like property that could be sold, like a car or a piece of land, would undermine the safeguards that both bankruptcy and rent laws are supposed to provide.

    The case also drew the interest of lawyers who saw it as a threat to the housing stability of many low-income New Yorkers. Mrs. Santiago’s case was argued before the state court by Ronald J. Mann, a law professor at Columbia University and experienced bankruptcy specialist.

    “The decision finally restores the status quo that held for decades, protecting these tenants in bankruptcy so long as they pay their rent,” Mr. Mann said.

    John P. Campo, a lawyer for the bankruptcy trustee, said “the general consensus” before the state court ruled on the matter Thursday was that a lease was not a public benefit.

    “The trustee all along was simply following the law,” he said.

    In a dissenting opinion, Judge Robert S. Smith argued that the majority “grossly misreads” the law by treating rent regulation as public assistance. He was joined by Judge Susan Phillips Read.

    “I would like to try asking every rent-controlled or rent-stabilized tenant in New York: ’Do you receive public assistance?’ ” Judge Smith wrote. “I would be surprised to find even one (apart from those receiving government subsidies from other programs) who answered yes.”

    But Linda B. Rosenthal, a member of the State Assembly who introduced a bill two years ago to prohibit the use of rent-regulated leases as assets in bankruptcy proceedings, said she had heard from tenants who needed bankruptcy protection but were afraid to seek it.

    “I’m just delighted that the court got it right,” said Ms. Rosenthal, a Manhattan Democrat who also submitted a brief in the case along with 17 other state legislators on behalf of Mrs. Santiago. “People who are in the unfortunate circumstances of having to file for bankruptcy will no longer put it off for fear of losing their home.”

    Mrs. Santiago’s lawyers said they expected her bankruptcy case to close quickly after the federal court adopts the state court’s ruling and issues its opinion in a few months.

    In the two-bedroom, $703-a-month apartment where she has lived for more than 50 years, Mrs. Santiago burst into tears when she heard about the decision from her bankruptcy lawyer, Kathleen G. Cully.

    “It’s such a big relief,” she said in a phone interview. “I don’t have to worry about my landlord anymore.”
Source: Rent-Stabilized Leases Shielded in Bankruptcy.

For the ruling, see In re Santiago-Monteverde (Santiago-Monteverde v. Pereira) (uncorrected), No. 180 (N.Y. November 20, 2014).

For an earlier story, pre-dating this court ruling, see Widow’s Bankruptcy Case Poses Risk to Rent-Stabilized Tenants.

(1) The U.S. Supreme Court has stated that, in cases when the Federal courts are asked to rule on issues involving the interpretation and application of substantive (as opposed to procedural) state law, "the State's highest court is the best authority on its own law." Commissioner v. Estate of Bosch, 387 U.S. 456 (1967).

In deciding to ask the New York Court of Appeal (the state's highest court) to weigh in as to the nature of a rent-stabilized lease, the 2nd Circuit Court of Appeals (In re Santiago-Monteverde, 747 F. 3d 153 (2nd Cir. March 31, 2014)) gave the following analysis of the applicable law and its reasoning:
  • Given the significance of these issues to landlords and tenants, as well as the complete absence of authority concerning the impact of DCL § 282(2) on rent stabilized leases, we hesitate to attempt to resolve these issues without first obtaining the views of the New York Court of Appeals.


    Pursuant to Rule 27.2 of our Local Rules and New York State law, we may certify "determinative questions of New York law [that] are involved in a case pending before [us] for which no controlling precedent of the Court of Appeals exists." N.Y. Comp.Codes R. & Regs. tit. 22, § 500.27(a); Local R. 27.2; see also N.Y. Const. art. VI, § 3(b)(9) (directing the New York Court of Appeals to adopt a rule permitting it to answer questions of New York law certified to it by, among other courts, "a court of appeals of the United States").

    "Before certifying such a question, we must answer three others: (1) whether the New York Court of Appeals has addressed the issue and, if not, whether the decisions of other New York courts permit us to predict how the Court of Appeals would resolve it; (2) whether the question is of importance to the state and may require value judgments and public policy choices; and (3) whether the certified question is determinative of a claim before us." In re Thelen LLP, 736 F.3d at 224 (internal quotation marks omitted). In this case, we answer all three questions in favor of certification.

    First, neither the Court of Appeals nor lower New York courts have addressed (1) the meaning of "local public assistance benefit" in the context of DCL § 282(2), (2) whether the protections provided by the RSC are personal or property rights, or (3) the effect of the assignment of a tenant's lease during bankruptcy on her rights under the RSC. This prevents us from making any confident prediction of how the New York Court of Appeals would resolve this issue. [Editor's note: an "Erie guess"].

    Second, the issue of the proper interpretation' and interaction of the DCL and RSC is "of importance to the state" and will in fact involve "value judgments and public policy choices" concerning the existence and scope of property rights, as well as the application of emergency housing legislation that was carefully designed to balance the rights and interests of renters and building owners. Manocherian, 84 N.Y.2d at 389-90, 618 N.Y.S.2d 857, 643 N.E.2d 479.

    Finally, the resolution of this question will determine the outcome of this appeal, as it is the only question presented to this Court.


    The following question is hereby certified to the Court of Appeals of the State of New York pursuant to 2d Cir. Local R. 27.2 and N.Y. Comp.Codes R. & Regs. tit. 22, § 500.27(a), as ordered by the United States Court of Appeals for the Second Circuit.

    Whether a debtor-tenant possesses a property interest in the protected value of her rent-stabilized lease that may be exempted from her bankruptcy estate pursuant to New York State Debtor and Creditor Law Section 282(2) as a "local public assistance benefit"?

    In certifying this question, we understand that the New York Court of Appeals, if it accepts the case, may reformulate or expand the certified question as it deems appropriate. We do not intend this articulation of the above specified question to limit the scope of the analysis by the Court of Appeals

Sunday, November 23, 2014

Harlem Brownstone Targeted In Stolen Identity/Deed Theft Scam; True Owners Get Roped Into Lawsuit By Would-Be Buyer Who Made $90K Downpayment In Deal To Buy Property From Two House-Heisting Scammers

In New York City, the New York Post reports:
  • Con artists have tried to sell a $2.2 million Harlem brownstone they don’t own four times since September, the building’s fed-up owners told The Post.

    And now the owners are fighting a lawsuit from a would-be buyer who made a $90,000 down payment to a lawyer representing the scammers — who used forged drivers’ licenses to impersonate the couple.

    “This was a nightmare. The audacity was just amazing,” said Pamela Page, 58, who owns the landmarked Astor Row brownstone at 57 West 130th St. with her husband, Igor Jozsa.

    The ordeal began in September when Jozsa, 69, visited the property — which the couple plans to renovate and live in — and found surveyors inside, who said they were doing work for “the new owners,” who planned to close in a few days.

    Page said they contacted a lawyer for the “buyers” and learned that they had agreed to purchase the property from two impostors. The crooks tried three more times to sell the property, even changing the locks at one point.

    A law-enforcement source said that such “deed theft” crimes are largely the work of a Russian organized-crime outfit based in Seagate, Brooklyn.