Brooklyn State Senator Velmanette Montgomery’s “Deed Theft Bill,” a new law aimed to provide greater protections for homeowners whose properties are either in default or foreclosure, passed on Wednesday the New York State Senate and now awaits Governor Andrew Cuomo’s signature.
Montgomery’s bill expands upon the 2006 Home Equity Theft Act, a law that provides homeowners with information to make informed decisions when approached by persons seeking a sale or transfer of the homeowner’s property. The Deed Theft Bill will also strengthen laws regulating distressed property “consultants” who provide services to prevent property loss.
“Passing the Deed Theft Bill is a major step forward in addressing one of the most pressing issues among homeowners, “said Montgomery. who represents the 25th State Senate District including Fort Greene and Bedford Stuyvesant. “These thieves target our most vulnerable homeowners and snatch generations of wealth from our families.”
The passage of the bill comes less than a month after Senator Montgomery, Brooklyn Borough President Eric Adams and Assemblymember Tremaine Wright hosted a legislative hearing to examine Brooklyn’s homeownership crisis, responding to the many homeowners who lost their property and equity and have been left without support.
The Deed Theft Bill aims to protect property owners from fraudulent companies who often target seniors, homeowners who struggle financially or for whom English is not their first language, Montgomery explained in a statement. These bad actors often offer unsolicited assistance with foreclosure or modifications, sometimes claiming that the victim’s home is already up for auction.
Homeowners, who believe these companies will represent them honestly, often inadvertently sign away the deeds to their homes, sometimes not realizing the mistake until years later, added Montgomery.
The “Deed Theft Bill” prohibits abusive and deceptive behaviors such as pretending to be law enforcement or government representatives, taking temporary ownership of a deed, or engaging in harassment of the homeowner. Additionally, it prohibits loan modification consultants from requiring upfront fees for services.
The bill further eliminates the requirement that a homeowner must post a bond for filing a lawsuit to stop a deed transfer. Instead, the Deed Theft Bill extends the time period a homeowner has to rescind transactions with distressed property consultants from five days to 14 days, and provides a legal path to restore the title of a property when there has been a criminal conviction based on fraudulent actions concerning a property transfer.
“Fraudulent companies have targeted our homeowners for far too long,” said Assemblymember Tremaine Wright. “By passing the Deed Theft Bill, we are moving forward to strengthen protections for homeowners, families and communities.”