NYC Creates Program to Prevent Mortgage Fraud and House Theft

In a move designed to protect homeowners, the New York City Department of Finance on July 13th 2010 announced a new program that will become the first line of defense in preventing Mortgage Fraud and House Theft.

The Notice of Recorded Document program was created to provide notification via mail, email or SMS text message to property owners, lien holders and/or their designees each time a property deed, deed related, mortgage or mortgage related document is filed that affects ownership in a property.

Any party that has an interest in a property can register to receive notifications by either method they prefer.  That means the following parties can register to receive notifications:

• Property Owners
• Estate Executors/Administrators
• Banks and other lending institutions
• IRS and any other tax revenue collection municipality
• Collection agencies
• and more

The object is to reduce the opportunities that New York City’s deed recording process affords individuals interested in committing mortgage fraud by recording documents.

It will also allow property owners who are easy prey to receive notification when someone is recording a deed and stealing their home through fraudulent conveyance.

While we applaud the steps taken by NYC, we do believe the new system has severe shortcomings in the prevention of mortgage fraud and house theft.

After a thorough review of the plan’s practical application, we’ll report back to let you know how effective it will be in notifying you.

And more importantly, we’ll also share how this new approach will also make individual property owners more vulnerable to predators looking to identify their next victim.

Michael A. Corley is a licensed Real Estate Broker and Exec. Vice President at Corley Realty Group.  Born and raised in Bedford Stuyvesant, he now resides in Crown Heights with his wife and children