UPDATE: Gov. Andrew Cuomo signed the legislation Aug. 14, 2019, expanding protections for deed theft victims, as well as other measures that further safeguard homeowners. “These measures enact sweeping protections for homeowners and close loopholes in order to level the playing field and preserve the American Dream for New Yorkers in every part of this great state,” Governor Cuomo said.
Homeowners who have been the victims of deed theft could soon have an easier fight restoring their rights to their property’s title under new legislation passed by state lawmakers. It’s one of several bills aimed at enhancing consumer protections for homeowners that the Governor is expected to sign into law.
Other legislation would prohibit deceptive advertising for reverse mortgages, banning terms such as “public service announcement” or”government-insured,” and establish procedures to deter partition scams where one heir sells their property rights to a home, causing the entire family to suffer and lose out on equity they’ve built up. That’s because the heir’s action typically forces the sale of the home at a much lower price than if it had been sold on the market.
Legislation would also prohibit certain types of troubling conduct by so-called “distressed property consultants,” such as threatening to disclose false information about a homeowner’s creditworthiness or harassing homeowners and family members.
“Homeowners should feel empowered to fight back against scammers who try to steal their houses.”
The Center for NYC Neighborhoods, working with its partners in the Coalition for Affordable Homes, strongly advocated for the measures.
Caroline Nagy, the Center’s Director of Policy and Research, said the deed theft protections would go a long way toward helping victims restore ownership of their homes.
“Given the limited legal services resources available to victims of deed theft scams, these new protections will offer substantial benefits to the low-income communities we serve,” she said. “Homeowners should feel empowered to fight back against scammers who try to steal their houses.”
In the typical deed theft scheme, scammers transfer the title to a home, sometimes without the knowledge of the homeowner, to themselves or to a third party. For homeowners who have been defrauded out of their deed, restoring ownership can be both legally laborious and costly, despite how unfair it is to put the onus on the legitimate homeowner to justify their claim to their property.
The bill amends the criminal procedure law to provide a post-trial motion procedure after there has been a criminal conviction involving fraudulent real property transfers, which will afford a mechanism for title to be restored to those victimized by deed theft schemes.
The new legislation comes on the heels of the success of the Communities First campaign, which the Center helped lead, that secured $20 million in funding in the State Budget for homeowner services and makes homeownership part of the social safety net. The funding will go toward supporting a network of housing counselors and legal service providers who work on the front lines helping families struggling to keep their homes.
The State Legislature also passed bills that would give defendants more protections in foreclosure proceedings, and allows municipalities to require lenders to either complete a foreclosure or discharge the mortgage for vacant and abandoned buildings — and thus helping communities to avoid blight that can bring down property values.
Seniors who take out reverse mortgages would also receive additional safeguards under separate legislation; reverse mortgage foreclosures have been rising, and these legislative measures may help to slow that trend in New York.
Through the Coalition for Affordable Homes, the Center continues to advocate for expanded consumer protections for homeowners to further deter scams and curb aggressive speculation and harassment. This includes cease and desist zones in rapidly gentrifying neighborhoods of the city where rising property values attract scammers and unwanted advances by speculators. Cease and desist zones allow homeowners to opt-in to a list that would prohibit brokers and other real estate professionals from soliciting them to sell their homes. Another bill that the Coalition has long advocated for would increase the real estate transfer tax on properties that are flipped, which would help curb displacement and speculation in hot neighborhoods.
These protections are intended to allow homeowners throughout New York to continue to live and thrive in the neighborhoods they call home.