Deed theft remains a growing threat for seniors, Black homeowners

Jonathan Delozier: Is deed theft getting worse or is public awareness finally catching up to the full extent of the problem?

Scott Kohanowski: I think this has always existed, and I think real estate empires have been built on deed theft, scam and predation that’s been targeting distressed communities, especially. I don’t know if it’s increasing, but I think we’re probably noticing it a lot more because there’s been so much attention brought to it. Also, especially in a place like New York, we have a lot [of] public resources and a lot [of] support from the state attorney general’s office. Because there are a lot resources, there are a lot of people working in this area, and they’re identifying the scams that are happening and generally raising that awareness.

Delozier: Your work has shown that older adults and Black homeowners are disproportionately targeted. What makes those demographics particularly vulnerable and what systemic factors allow these scams to keep happening?

Kohanowski: Well, generally, for seniors, it’s diminishing capacity, and it’s also that there’s so much wealth that a lot of the seniors are sitting on, especially in a place like New York City, where we have through-the-roof market values. Seniors are generally seen as an easy target, especially if they don’t have the resources or they don’t have somebody who’s helping them manage their affairs. As they get older, it just becomes harder and harder to keep on top of things and know who to trust.

For historically Black communities, Black Americans, Black homeowners and new Americans, immigrants — a lot of those demographics don’t have access to information and legal resources and the things that help folks protect their homes and protect their assets. You can trace a direct line back to post-Civil War Reconstruction, then Jim Crow, then the Great Migration north, and then before the Fair Housing Act, we had these discriminatory lending laws and ownership laws and restrictive covenants that disproportionately affected African Americans and excluded them from a lot of the protections that we now have.

Those families or individuals who were able to acquire properties at that time had artificially depressed property values because of these restrictive covenants and redlining practices. But then once we had the Fair Housing Act, a lot of these areas that were historically artificially depressed in value — in places like New York — those areas have rapidly gentrified. It’s not uncommon to have a Harlem brownstone that’s now worth $5 million and there may not be any mortgage on that property at all because a great grandmother wasn’t able to get a mortgage. Fast forward 30 or 40 years, and you have a very high value property with a ton of equity. A lot of the scammers and predators see that as an opportunity to mine wealth out of those communities and to strip that equity and appropriate that equity.

Delozier: For real estate agents and title agents who are often the last line of defense before property changes hands, what are some under-the-radar warning signs they should be looking out for?

Kohanowski: For that side of the industry, it’s making sure that they’re not rubber stamping a lot of these sketchy transactions. You’ll see it where you’ll be in a closing room and you have what we call “potted plant lawyers” — the ones that are supposedly representing the victim but they’re really in cahoots with the perpetrators. You see that with the foreclosure rescue scams all over the place.

Even the title companies and the real estate agents — if they’re not communicating directly with the principal, the main person, the homeowner or the home purchaser — they should double verify everything because you see deeds being forged. You see the foreclosure rescue scams where people are being told one thing, a bait and switch type thing, and they’re being told to sign documents that they don’t understand. Just make sure that whoever is giving up their rights or selling something or signing something actually knows what it is that they’re signing.

Delozier: With the New York City Deed Theft Prevention Office and the Homeowner Protection Program, what elements have been most effective and what could realistically be replicated in other states or areas?

Kohanowski: New York and New York City have developed, over time, some robust protections for homeowners — not just in terms of foreclosure or inherited property — but what we’re talking about right now with deed theft and real property fraud and schemes, scams and predation. There hasn’t been, in New York City, a centralized agency or office that addresses all the various forms of deed theft. So that’s really a great development; that there is a single office now that coordinates efforts across different law enforcement agencies and civil legal service organizations.

The New York State Office of Attorney General has been active in this area. We’ve partnered with Letitia James and people in her office. They started convening, maybe five years ago, a deed theft task force that brought together different law enforcement agents and agencies in the city and civil legal service organizations to share resources and information about what they’re seeing on the ground. But it was not so much public facing. Having an office now that is public facing, that is in the communities, that people can go to directly, is great.

Delozier: How is deed theft affecting heirs’ property transactions?

Kohanowski: Heirs’ property is a really hot topic right now nationally in the home preservation circles because I think it accounts for a large part of wealth that’s held in homes, especially in Black communities. It’s something that I think has been happening for a long time. We originally saw it happening in places like the Gullah Geechee Islands and the South Carolina coast, but we saw the same practices transplanted into New York City. You’d have Grandma’s house up in Harlem, a brownstone worth $5 million, and she passed away 20 or 30 years ago and nobody’s handled the estate. You might have three or four family members living in that house and 20 heirs who own a part of that property automatically, by operation of law.

We’ve done some research, and we’ve seen how much wealth has been lost due to those practices. A lot of the work we’re doing now is getting that information out to homeowners and to heirs, and getting people to take estate planning seriously, and just to be aware of what their rights are and the values that we’re talking about. There’s so much wealth there to be mined.

Delozier: Data fragmentation seems to be a big enabler of deed theft and all forms of real estate fraud. Could there be a realistic expectation in the next 10 years to have some sort of national deed database, or does that seem unlikely given how low-tech some jurisdictions are?

Kohanowski: New York City is great because all of our land records are public, online and freely searchable, and that helps us as advocates working in this area. But all that information is local, and every municipality or every local clerk might have a different system. New York has 50-plus counties and every county has a slightly different variation on how to look at land records and how to trace title. I don’t know if that’s something that can even happen at a national level because it’s so local. But maybe AI could help.

Part of the problem too is that we see the predation happening largely to homeowners who are already in distress — they might be in foreclosure, behind on their property taxes or need home repairs. New York City for the longest time, and every municipality does this — if somebody’s behind on their property taxes, they can foreclose on that home, but they also release that information publicly. It’s basically giving a target list for the predators and scammers. The same for foreclosure filings — you see people pouring through the foreclosure records because those are the targets for foreclosure rescue scams.