In city ripe for deed theft, lawyer pitches protection service

One problem: Vulnerable homeowners not likely to hear about it

New York /
Apr.April 04, 2022 08:00 AM
Toby Cohen (Google Maps, LinkedIn, iStock)

Toby Cohen (Google Maps, LinkedIn, iStock)

As Brooklyn’s housing market has surged, so have reports of deed theft. Duplicitous buyers looking to cash in on appreciating prices typically target Black and elderly homeowners.

The city has struggled to stop it. From 2014 to 2020, some 3,152 complaints of deed theft poured into the Department of Finance. The city referred just 110 cases to prosecutors, resulting in a mere 48 arrests.

Real estate attorney Toby Cohen is trying another approach. He has launched a service that protects owners against fraudulent transfers and offers legal recourse to victims.

One obstacle to preventing deed theft is most owners don’t realize what happened until it’s too late.

Often, homeowners facing foreclosure will believe they are refinancing when they unwittingly sign over their home. Not until they try to settle utility bills or liens do they realize the home has a new owner.

By then, it has already been sold to a second or third buyer. Those transfers, Cohen said, make deed theft hard to unwind.

In 2015, Cohen represented Reinaldo Suriel, who was facing foreclosure after falling behind on mortgage payments. Suriel was introduced to Jean Millien, the principal of American Foreclosure Network Systems, who allegedly told the Brooklyn homeowner if he transferred his title to AFNS, Millien would work with the bank to reduce or cancel Suriel’s mortgage, court documents show.

In 2012 Suriel signed over the deed to Millien, who then sold the property to Yitzchok Tyner of YYSB Trust. Suriel claims he never heard from Millien again about the help he promised.

Had Millien kept the deed, Cohen could have sued him for theft. But once Tyner’s entity acquired the property, Tyner became a bona fide purchaser, and his ownership is protected unless there’s evidence that he knew about the previous fraud.

For that reason, secondary transfers are common in deed theft, said Adam Birnbaum, a lawyer at Abrams Fensterman. Birnbaum is representing Ida Robinson in an alleged deed theft case where her house was sold twice after she unknowingly transferred it.

Documents shed new light on Crown Heights eviction saga

“I tried to come up with a way to keep the secondary buyer on the hook,” Cohen said.

The attorney’s service, Terzero, offers third-party authorization on deed transfers. The homeowner pays a one-time fee, and Terzero requires the owner to approve any property transfers online — which shows up on the chain of title.

If the homeowner does not okay a sale and it happens anyway — which is possible because outdated systems allow anyone to record documents if they are signed, dated and notarized — Terzero will show that the authorization is still pending.

Once a sale is recorded, the rightful owner must prove it was fraudulent. The lack of authorization from Terzero is evidence of that. A secondary buyer would see it on the title and could not plausibly claim ignorance of the initial fraud.

If Suriel had Terzero, Cohen said, “I would have been able to say to YYSB, ‘You are not a bona fide purchaser. You should have known something was up.’”

Ultimately, Suriel’s lawsuit was dismissed and he lost his home.

One shortcoming of Terzero is that owners vulnerable to deed theft are unlikely to know about services to prevent it. Fraudsters often get to delinquent homeowners first. Until the government begins systematically warning owners who are behind on their mortgage payments, the first knock on their door is likely to be by a deed thief.

Still, the service builds on efforts by the city or state, most of which have concentrated on spreading awareness. Two years ago, Attorney General Letitia James launched a one-day door-knocking drive to educate homeowners in Bedford-Stuyvesant, Prospect-Lefferts Gardens and Flatbush about deed theft. James also created a task force and dedicated an office to fielding complaints.

The city advises owners to sign up for an alert system that notifies them if the City Register detects legal changes in a property’s ownership. But most potential victims have not signed up, and those who have would likely find out too late about a property transfer.

The City Council did introduce two bills in 2020 to crack down on deed theft. But both would strengthen existing protections, not add tools for enforcement.

One bill would require the sheriff’s office to annually report details of complaints and investigations related to deed fraud. Another would compel the city to educate homeowners notified of property transfers on how to file a complaint.





    Related Articles

    arrow_forward_ios
    CHIP executive director Jay Martin (LinkedIn, iStock / Photo illustration by Priyanka Modi)
    Landlords called it: Vacancy rate jumps, rent-stabilization stays
    Landlords called it: Vacancy rate jumps, rent-stabilization stays
    331 Elmora Avenue and 103 Ryan Street (Kislak Realty)
    Tri-state deal roundup: Multifamily, industrial still hot
    Tri-state deal roundup: Multifamily, industrial still hot
    From left: Vice Media CEO Nancy Dubuc, Rudin’s CEO and co-chairman Bill Rudin, and Dock 72 (Getty Images, S9 Architecture, Rudin Management, iStock)
    Vice scraps move to Rudin’s Dock 72
    Vice scraps move to Rudin’s Dock 72
    From left: Metro Loft Management founder Nathan Berman, Silverstein Properties chairman Larry Silverstein, and 55 Broad Street (Metro Loft, Silverstein Properties, LoopNet)
    Silverstein, Metro Loft pick up Rudin’s 55 Broad Street for $180M
    Silverstein, Metro Loft pick up Rudin’s 55 Broad Street for $180M
    1552-1560 Broadway and Wharton Properties’ Jeff Sutton (Google Maps)
    Investor claims Jeff Sutton cheated him out of millions on Times Square deal
    Investor claims Jeff Sutton cheated him out of millions on Times Square deal
    Burberry's Jonathan Akeroyd with 11 West 42nd Street (Getty, Google Maps, iStock)
    Burberry sews up deal at Tishman Speyer building
    Burberry sews up deal at Tishman Speyer building
    Adam Leitman Bailey, Y. David Scharf, and Miki Naftali with 215 West 84th Street (Adam Leitman Bailey, Morrison Cohen, Getty)
    Naftali lays out project as holdout tenant plays new card
    Naftali lays out project as holdout tenant plays new card
    Taconic Partners' Matthew Weir and Hudson Research Center 61 at 9 West 54th Street (iStock, Taconic Partners, Hudson Research Center)
    RPI signs at Taconic and Silverstein’s life sciences hub
    RPI signs at Taconic and Silverstein’s life sciences hub
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...