The Center is constantly on the lookout for emerging threats to homeowners – and combating foreclosure rescue scams continues to be a top priority. Recently we have seen an alarming increase in deed theft scams.
Several individuals associated with Homeowner Assistance Services of New York and Launch Development LLC were recently charged in federal court with conspiracy to commit wire fraud as part of a series of deed theft scams targeted at New York City homeowners.
We applaud US Attorney Preet Bharara, the FBI, and SIGTARP for pursuing this case, and hope to see many more prosecutions in the future. In helping to get out the word out about just what these scams look like, we turned to our long-term colleague and partner Jen Sinton, Director of the Foreclosure Prevention Program at South Brooklyn Legal Services, a Network Partner and a member of New York Attorney General Eric Schneiderman’s statewide Homeowner Protection Program. Sinton is currently representing several victims of deed theft scams, and believes deed theft has reached crisis levels in New York.
As home values rapidly rise throughout New York City, deed theft scammers are targeting homeowners at risk of foreclosure. Like many scammers, they present themselves as offering home-saving solutions to families desperate for a way out of foreclosure, but end up taking their homes out from under them. The combination of rising property values with tens of thousands of homeowners seeking to avoid foreclosure presents a “perfect storm” for deed theft scammers, according to Sinton, who notes that neighborhoods slated for upzoning are particularly targeted. “It’s definitely on the rise and we’re going to be seeing more and more of it,” Sinton said.
How Deed Theft Scams Work
Deed theft scams take on a variety of forms, though they all involve the fraudulent transfer of ownership of a home to a third party. Sometimes homeowners are tricked into signing over their deed, believing they are signing some other type of legal document. For example, according to the FBI, defendants in the Launch Development LLC case misled homeowners into signing blank documents that they were told were mortgage modifications, when in fact, the documents were used to transfer the title to their homes.
In other varieties of the scam, the homeowner may be aware that they are signing over title to their home, but are led to believe that the transfer will be temporary as they seek a refinancing, modification, or second mortgage. After signing over title to the home, the homeowner will typically make “lease” payments to the scammer until the scammer moves to evict them in housing court and takes possession of the home, usually to sell at a profit.
Combating Deed Theft Scams
In addition to more law enforcement actions taken against deed theft scammers, Sinton would like to see more resources available to assist victims keep their homes. Sinton also calls for increased awareness among victims and their attorneys of the Home Equity Theft Prevention Act, a New York State law that provides an important legal tool for deed theft scam victims. To help increase awareness of available homeowner resources, the Center has partnered with the New York State Attorney General’s Office to create a powerful new online tool to help track and stop scams: AGScamHelp. Homeowners can use AGScamHelp to determine whether a party with whom they are dealing is government-vetted, and to report suspected scams. Homeowners can also use AGScamHelp to get connected to a partner in the Attorney General’s Homeowner Protection Program — a network of nearly 90 housing counseling and legal services organizations across the state that are well-equipped to help homeowners struggling with scams and looking to get back on track and keep their homes.
Signs of a Scam
How can homeowners avoid scams? Here are four common signs of a deed theft scam according to South Brooklyn Legal Services:
- You are asked to sign over your property to a third party in order to repair your credit.
- You are behind on your mortgage and receive numerous high-pressure solicitations.
- A person claiming to be a foreclosure rescue specialist promises to save your home from foreclosure (keep in mind, no one offering legitimate help would “guarantee” a result).
- You are steered away from seeking independent advice during negotiations about your home.
To find out whether a company you are dealing with is government-vetted, or to report a suspected mortgage scam, visit AGScamHelp.com.
To find high-quality help with your mortgage, call the New York State Attorney General’s Homeowner Protection Program hotline today at 1-855-HOME-456 (855-466-3456). Get connected to trusted help – at no cost to you.