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Foreclosure Challenges, From Fraud to Deed Theft

In a hearing at Brooklyn Borough Hall, residents and housing experts testified on deed theft, liens for minor unpaid bills, fraudulent documents, and other foreclosure-related challenges, as reported by the Brooklyn Daily Eagle.

The hearing was sponsored by Brooklyn Borough President Eric Adams, State Senator Velmanette Montgomery and Assemblymember Tremaine Wright, and attended by officials including State Senator Brian Kavanagh.

According to Catherine Isobe, Senior Staff Attorney at Brooklyn Legal Services, funding for services such as the Communities First Network was “absolutely crucial.”

“We cannot meet the need of affected homeowners,” said Isobe. “I checked yesterday and we had about 6,000, if not more, foreclosures pending in Kings County and more are on the way… We have a huge number of pre-foreclosure notices filed. We can’t help everyone with the resources we have.”

Isobe noted that in order to address the property theft and foreclosure issues, amendments to the real property law concerning deed theft needed to be dealt with.

According to Sarah Ludwig, Founder and Co-Director of the New Economy Project, the New York State Senate had cut funding for foreclosure prevention services.

“We cannot cut back funding. It would be devastating to go beyond $20 million, which is not in itself enough,” she said.

In recent years New York has continued to struggle with lingering foreclosure issues and urban blight related to abandoned properties. Foreclosures across New York have dropped by 46 percent since 2013, and the number of pending foreclosure cases in the state is down by half since 2014. However, New York State Comptroller Thomas P. DiNapoli warned earlier this month that “the foreclosure crisis is far from over,” adding, “New York must continue to support the programs and reforms that have helped homeowners avoid foreclosure and communities reduce blight caused by zombie properties.”

In a white paper published by the National Mortgage Servicing Association (NMSA), the NMSA discussed some “common sense, practical, and affordable remedies,” aimed at reducing the costs of foreclosure practices and community blight.

According to the white paper, titled “Understanding the True Costs of Abandoned Properties: How Maintenance Can Make a Difference,” the typical foreclosed home can impose costs of around $170,000, $85,000 of which is attributable to vacant property requirements and condition.

“It’s time to rethink how we deal with vacant and abandoned properties,” the white paper states. You can read the full white paper here.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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