PN Lawyers was featured in the latest Newsmax Finance article to outline 5 ways to protect yourself from real estate fraud.
Richard Flateau narrowly avoided being defrauded when he was alerted that a false power of attorney was filed in the Offices of the City Register on his 1424 Fulton Street property in Brooklyn. The criminal had forged Flateau’s signature.
“Even if the mortgage is paid off, you still have to be vigilant because property values have risen so much and buildings in Brooklyn are now worth millions of dollars,” said Flateau, chair of Community Board 3 for Bedford Stuyvesant, Brooklyn. “The criminal element is more sophisticated than ever. They are looking to steal whatever they can.”
Had the fraudster, who is originally from Nigeria and is currently incarcerated, not been caught, Flateau would have likely faced an expensive nightmare.
“He could have gotten a mortgage on the property, obtained a fraudulent deed and I would have had to spend hundreds of thousands of dollars on legal fees to get it reversed,” said Flateau, a real-estate broker.
After hearing multiple stories of homeowners falling victim to various predatory schemes like the one that Flateau avoided, Brooklyn Borough President Eric L. Adams hosted a hearing calling for a full forensic audit and investigation into deed fraud in Brooklyn on federal, state and city levels.
“As our borough has become a more attractive place to live, work and raise a family, unfortunately the incentives for defrauding long-time homeowners – largely people of color living in Central Brooklyn – have only grown,” Adams told Newsmax Finance. “Unfortunately, the TPT program may unintentionally be playing a role in exacerbating this crisis.”
Adams is referring to the New York City Housing and Preservation Development (HPD) Third Party Transfer (TPT) program, which designates qualified sponsors to purchase and rehabilitate distressed vacant and occupied multi-family properties in order to improve and preserve housing affordable to low-to-moderate income households.
But Adams alleges that the TPT program allows the city to foreclose on “distressed” properties and hand them over to third-party developers.
“I believe the TPT program is deeply flawed,” said Adams. “I have called for a moratorium on the Third Party Transfer program while we figure out how to strengthen oversight and make the necessary reforms.”
According to Diane Struzzi, director of communications for New York City’s Department of Investigations (DOI), an independent City enforcement agency, is aware of concerns involving HPD’s Third Party Transfer Program, is in touch with HPD and declined further comment.
An HPD spokesperson, who requested anonymity, said the city’s TPT program helps protect tenants.
“Property owners, deemed eligible by statute, are treated fairly and are given multiple opportunities for assistance and collaboration before the city takes action,” she said. “There is always room for improvement and we are committed to making the process as transparent and effective as possible. We look forward to exploring updates and changes to the program through our working group.”
In the past 15 years, real estate values in Crown Heights, Bed-Stuy and East New York have skyrocketed. Julie Howe, senior staff attorney for the Foreclosure Prevention Project at the New York Legal Assistance Group, said foreclosures in Brooklyn are at their highest levels since 2009, which is why multiple non-profit organizations are requesting additional funds to push back against allegedly fraudulent foreclosures.
Here are five lessons learned from the Brooklyn case and ways to protect yourself from real-estate fraud:
- Sign up for automatic notifications to be alerted when and if an unknown document is filed against your property, says Flateau.
- If monthly electricity, water and other utility statements are delayed or missing, double check that the bills are addressed to the right person and address, says the Pardalis Nohavicka law firm in Manhattan.
- Participate in neighborhood watchdog organizations to be connected to local officials who can help if and when an incident occurs, says Flateau.
- Contact your local District Attorney’s office if an incident of potential fraud has already occurred, says the Brooklyn Borough President’s Office.
- Sign up for identity theft monitoring, says the Pardalis Nohavicka law firm in Manhattan.
Read Newsmax: 5 Ways to Protect Yourself From Real-Estate Fraud