City Council targets deed fraud with two bills

Car theft, once rampant in the city, has been reduced to a trickle. But thieves have become adept at stealing something even more valuable: homes.

While auto larcenies have plunged to about 5,000 a year from nearly 150,000 in 1990, some 3,152 deed theft complaints were filed with the Department of Finance over the past six years. Now the City Council is considering legislation to curb the problem.

A pair of bills would ramp up reporting of deed fraud while also calling on the state to increase protections for homeowners.

From those deed theft complaints, between July 2014 and June 2020, the finance agency referred 110 to prosecutors, leading to 48 arrests, a City Council committee report found.

There are two main types of deed fraud, the report noted. One involves someone filing a fake deed, pretending to have purchased the property in order to borrow against it, sell it or occupy it. The second occurs when an owner is tricked into signing over the title to a property — a crime that can begin with an unexpected knock on the door.

One of the bills would require the sheriff’s office to annually report details of complaints and investigations related to “recorded document fraud.” The report would be organized by borough and individual Council districts to better identify problem areas, such as central Brooklyn.

The other bill would better warn property owners by beefing up the city’s Notice of Recorded Document program. The program notifies owners when deeds, mortgages and related documents affecting ownership in a property have been recorded with the city’s Department of Finance. The bill would require the city to include information on how to file a complaint or seek assistance if a property owner suspects being a target of fraud.

On Tuesday, members of the City Council’s housing and finance committees held a hearing on the bills, as well as on resolutions urging the state legislature to approve other reforms.

One resolution calls for state legislation barring distressed property consultants and related businesses from using corporation names that mimic that of government agencies. Another urges the state to designate all of Brooklyn as a “cease and desist zone,” which means residents can get on a list of homeowners who do not want to be solicited by real estate agents or prospective buyers.

During the hearing, testimony repeatedly returned to the city’s tax lien sale. Officials have repeatedly postponed the sale this year, with Gov. Andrew Cuomo most recently putting it off until Nov. 3. Several individuals on Tuesday called for the sale to be abolished, saying that the public list of properties subject to the sale essentially serves as a deed-theft roadmap to vulnerable homeowners.

At the start of the hearing, Council member Adrienne Adams, who sponsored the bill requiring annual fraud reports, referred to the tax lien sale as deed theft’s “evil fraternal twin.”