Deed Theft Explained

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Over the past few years, homeowners have been increasingly targeted by con artists in a scheme known as deed theft. Though such scams take on a variety of forms, they all involve the fraudulent transfer of ownership of a home to a third party through deception, forgery or other means. In the past five years, New York City received about 3,000 deed theft complaints. Forty-five percent of those have been in Brooklyn, primarily in communities of color.  

A deed is a written, signed legal document that identifies the owner/s of a home. It can be used to transfer ownership from the seller (the grantor) to a new buyer (the grantee). Savvy con artists know that if they can obtain a deed through fraud, they can basically take ownership of a home. 

Scammers seek out financially vulnerable homeowners who are in foreclosure or behind on their mortgage, property tax, or water bills. They also target seniors, who tend to have equity in their homes but live on a fixed income, making them especially ripe targets for fraud. The legal process for restoring the deed to a property is often long, difficult, and expensive. 

Sometimes homeowners are misled into thinking they are signing some other type of legal document. For example, according to the FBI, defendants in the Launch Development LLC case tricked homeowners into signing blank documents that they were told would lead to mortgage modifications; instead, the documents were used to transfer the title to their homes.

In other varieties of the scam, the homeowner may be aware that they are signing over title to their home, but are misled into thinking the transfer will be temporary as they seek to refinance their home, modify their mortgage, or take out a second mortgage. After signing over title to the home, the scammer will often require the homeowner to make “lease” payments until the scammer moves to evict them in housing court and takes possession of the home, usually to sell at a profit.

Con artists can also use the city’s online Automated City Register Information System (ACRIS) to file a fraudulent deed. Sometimes this involves transferring ownership to a Limited Liability Corporation (LLC) to help shield their identity.

“Too often scammers turn the American Dream of homeownership into a nightmare,” said New York State Attorney General Letitia James. “No one should have to worry about their property being stolen by scammers.”

Four Common Signs of a Deed Theft Scam

Here are four common signs of a deed theft scam according to South Brooklyn Legal Services:

  • You are asked to sign over your property to a third party in order to repair your credit.

  • You are behind on your mortgage and receive numerous high-pressure solicitations.

  • A person claiming to be a foreclosure rescue specialist promises to save your home from foreclosure (keep in mind, no one offering legitimate help would “guarantee” a result).

  • You are steered away from seeking independent advice during negotiations about your home. 

 
 

How to Report Deed Theft 

Those who believe they have experienced deed theft are encouraged to call the Office of the Attorney General’s helpline at 1-800-771-7755, email deedtheft@ag.ny.gov, or fill out the online complaint form. Constituent services staff are trained to take down the details of your complaint, do initial research, and make referrals as needed.

What else you can do to protect yourself from deed theft 

Sign up for the Department of Finance’s Recorded Document Notification Program to be informed when a new document is filed for your property in ACRIS. Then, make sure to review any new documents and verify that the information is correct.

To see if you qualify for free legal assistance, contact HomeownerHelpNY at 855-HOME-3456 or fill out our online form.