Renters Unwittingly Caught in Foreclosure Crisis

SENATOR WANTS BANKS TO GIVE 90 DAYS TO VACATE

By Conor Greene

Among the victims of the nation’s foreclosure crisis are renters who lose their home because the property owner fell behind on the mortgage payments.

Under the current law, these tenants are often given just ten days to move out, despite having paid the rent each month – something that State Senator Jeff Klein is hoping to change through a tenant notification bill. The law, which would require banks to give tenants 90 days to move out, was approved in the Senate by a vote of 37-25, and is pending in the Assembly.

“Tenants who pay their rent on time deserve better than to find themselves on the other end of a notice to evict in 10 days without any prior knowledge that their homes have been foreclosed on, through no fault of their own” said Klein (D-Bronx). “If we don’t stem the tide and protect the innocent victims of this crisis – the renters – they will be the new face of homelessness in New York City.”

Across the five boroughs, an average of 581 renters are evicted each month, and the Center for Housing Policy estimates that almost 20% of all foreclosures are rental properties. Due to fallout from the housing crisis, states including Ohio, Illinois, Minnesota, Maryland, Rhode Island, Michigan and California have also instigated stronger notification requirements to protect unwitting renters from becoming evicted without sufficient notice.

The numbers are particularly stark in Queens, which has been hit especially hard by the foreclosure crisis. There were 311 tenant eviction cases in the borough in April, compared to 101 in Brooklyn, 49 in the Bronx, 69 in Staten Island and 4 in Manhattan. Since December, there have been 1,789 tenants evicted due to foreclosures in Queens, accounting for more than half of the 2,907 total cases of tenants evicted citywide.

The new legislation stipulates that after taking possession of a home, the bank must notify tenants that they have no less than 90 days to vacate the foreclosed home. The bank or new property owner would also have to file proof that it provided the tenant of its intent to evict them. Currently, many renters are unaware that their homes have fallen into foreclosure until the bank assumes ownership after auction and provides the tenant a Notice to Petition for Holdover. Tenants must then move within 10 days under threat of a lawsuit.

“With much of the attention and focus on saving homeowners from losing their homes, thousands of renters have fallen through the cracks in the foreclosure crisis and are facing eviction with little or no notice, as well as bad marks on their credit histories which can prevent them from securing adequate housing for their families. This city’s hard working families deserve adequate notice and time to make life altering decisions.”

As part of his study, Klein also released a snapshot showing the top five banks responsible for evictions in New York City. Deutsche Bank, which received $11.8 billion in federal bailout funds, evicted residents 689 between December 2008 and April 2009.

“It is unconscionable for a financial institution accessing federal bailout money to be so unrelenting in evicting people from their homes,” said Lionel Ouellette, executive director of CHANGER, a non-profit housing group based in the city. “In order to avoid an even greater public health epidemic, foreclosure related evictions and foreclosure cases must come to a halt and financial institutions must engage in more aggressive loan modifications that include principal write downs.”

Klein speaks in support of legislation to protect renters who are immediately evicted once the property owner defaults on the loan. He is joined by City Councilman Thomas White (D-Jamaica), whose district has been hit particularly hard by the foreclosure crisis, and renter Lisa Brown, who was forced out of her Long Island rental home when the bank foreclosed on the property.

The Forum Newsgroup/photo courtesy of WILLIAM ALATRISTE

Nine Charged in Mortgage Fraud Scheme

VICTIMS INCLUDE 74-YEAR-OLD WIDOW

Nine people, including a high-level court employee, have been charged in a $1.4 million mortgage fraud scheme which used stolen identities to buy and sell properties - and cheat a 74-year-old widow out of the home she owned outright.

An investigation by Queens District Attorney Richard Brown’s Elder Fraud Unit uncovered a group of individuals who allegedly took out mortgages on houses located on 107th Avenue in Richmond Hill, Union Hall Street in Jamaica, and Schaeffer Street in Brooklyn. All nine are accused of conspiring to defraud the lending banks – J.P Morgan Chase and Wells Fargo – and falsifying mortgage records.

The probe began when 74-year-old Dorothy Thomas reported that her home had been sold two months earlier without her knowledge and that she was now facing foreclosure. She learned of the sale after receiving mail in the name of “Tolessi Enyonam” regarding both the recent purchase of the home and the pending foreclosure.

In that case, the defendants are accused of recruiting someone to pose at the closing as her deceased husband, Eugene Thomas, who died in 1986 and in whose name the house remained. The house was allegedly sold to a straw buyer with a $490,500 mortgage issued by Wells Fargo. In the other two cases it is alleged the homes were sold by legitimate owners, but were purchased by straw buyers using the stolen identity of a New Jersey woman and a resident alien who no longer lives in the country.

Those properties included a $533,850 mortgage on the Richmond Hill home and a $417,000 mortgage on the Brooklyn home. The defendants were expected to be arraigned earlier this week in Queens Criminal Court. They are variously charged with grand larceny, possession of stolen property, falsifying business records, conspiracy, scheme to defraud and money laundering.

“This complicated and devious scheme allegedly involved defendants who were so greedy that they bought and sold three properties – totaling more than $1.4 million in fraudulent transactions – over just eight days,” said Brown. “Their alleged actions left a Jamaica woman – whose house was owned free and clear – facing foreclosure and a New Jersey woman – whose identity was stolen – fighting off banks seeking payment of mortgages fraudulently taken out in her name.”

Among the defendants is John D’Emic, 59, of 72nd Street in Brooklyn, who was an attorney in private practice at the time of the alleged crime. In January, he was appointed Chief Deputy County Clerk in Kings County. He allegedly acted as an attorney for the “buyer” or “seller” on each transaction, received money from the closing, gave a portion back to another defendant and prepared false letters providing instructions for disbursement of the mortgage proceeds.

Also charged in the scheme was: Norma Barabash, 63, of Bellerose, a certified public accountant who allegedly was paid for issuing a letter in the name of a straw buyer regarding his tax returns; Shamim Choudhury, 35, of Jamaica, who allegedly recruited the straw buyer who posed as Dorothy Thomas’ late husband; Gulam Choudhury, 22, of Laurence, who is accused of being involved in the Richmond Hill sale; Daisy Guzman- Saavedra, 38, of Yorktown Heights, who allegedly served as a fake employment and residence reference for the straw buyers; Nazrul Islam, 23, of Jamaica, who provided false references for the loan applications; Alan Morris, 58, of New Hyde Park, who was disbarred as an attorney in 1992 and allegedly handled all of the closings; Boris Nektalov, 23, of Flushing, who prepared and submitted false loan applications through the Rego Park mortgage company he worked at; and Rajendar Persaud, 35, of Verbank, who is accused of providing stolen identification information and laundered proceeds.