Deed thieves leaving victims homeless

Hard-up U.S. homeowners tricked into signing over titles in foreclosure ‘rescues’

In this Feb. 1, 2017, photo, Raymond Murray gets a visit from his lawyer, Robert Seewald, right, at his home in New York. Murray is the victim of deed theft, a foreclosure fraud where older people are mostly the target.
In this Feb. 1, 2017, photo, Raymond Murray gets a visit from his lawyer, Robert Seewald, right, at his home in New York. Murray is the victim of deed theft, a foreclosure fraud where older people are mostly the target.

NEW YORK -- Around the U.S., deed theft has emerged as one of the most sophisticated and devastating frauds ever to menace homeowners.

Foreclosure "rescue" scams that have stolen thousands of dollars from individual homeowners in the years since the housing collapse have been pushed by savvy perpetrators to their limit. They use lies to persuade the desperate to sign over their title, then force them into homelessness or a legal battle that can last for years.

"The scammers are no longer content with stealing $5,000. Now they want the whole house," said Dina Levy, who heads the Homeowner Protection Program in the New York attorney general's office, which has spread word about deed theft and prosecuted culprits.

Deed theft has been reported around the United States, from San Diego, where prosecutors recently netted a guilty plea and six-year prison sentence for a man involved in deed thefts of at least 15 homes, to Detroit, where the register of deeds hopes to expand his fraud unit to keep up with a crush of cases.

The problem has been most severe in gentrifying neighborhoods quickest to rebound from the housing crisis, especially ever-pricier blocks of New York.

The New York City sheriff's office has taken a lead on the cases. Since 2014, the office has amassed more than 1,700 complaints, with hundreds under investigation, and some 32 arrests already tallied.

Raymond Murray moved to New York in 1989 from his native Guyana, working as a telephone technician and then a police traffic control agent. He and his wife, Desrie, a teacher, lived in a relative's basement, then rented a home before saving enough to buy. It wasn't much -- a two-story brick house with a white metal gate, on a quiet, tree-lined Brooklyn street -- but he felt like he finally could see what he'd been working for.

"It was an American dream," the 67-year-old says.

After two on-the-job accidents, Murray was forced to retire. Money became tighter, but after his wife died suddenly of ovarian cancer in early 2009, Murray's real financial pinch set in. He cut back on food, kept the house darkened and found other ways to scrimp.

His savings disappeared, he fell behind on the mortgage and a default notice alerted him that he was being referred for foreclosure. He had already spent $5,000 on an attorney to try to restructure his debt when that chance call came in January 2014, from a man named Mario Alvarenga.

Murray said Alvarenga told him his mortgage could be modified, and the fix wouldn't even cost anything, so long as he fired his attorney. Because of his poor credit, Murray said he was told, his home would need to go in the name of another company Alvarenga was tied to, Launch Development, for 90 days; then the loan modification would be finalized and the property could be put in the name of one of his children or, as he'd remarried, his new wife.

But, soon after Murray signed the papers, Alvarenga phoned to tell him the loan modification wasn't approved, pleading for patience. Murray grew worried and suspicious, and Alvarenga became impossible to reach. It all climaxed with Murray finding a man on his property taking pictures and informing him the house now belonged to him. Later, an eviction notice on his door ordered him to vacate.

The chilling realization dawned: "They stole my home from me."

What Murray believed was a mortgage restructuring was actually a sale, meticulously documented in paperwork. There is no resolution yet, but Murray has been allowed to remain in the house even as, on paper, he is no longer the owner.

In court papers, Alvarenga's attorneys dismissed Murray's story, saying he had "simply conspired a plan to live for free, for as long as possible." But Alvarenga later pleaded guilty to conspiracy. He awaits sentencing. Six others also face federal charges in the case, including two who have pleaded guilty.

As Murray's lawyers fight for the return of his home's title, he now sees why he was targeted.

"They see that I was desperate, that I was in need," he said. "But I can see justice coming."

A Section on 04/24/2017

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