The alleged scam primarily targeted predominately non-white populated neighborhoods
A recent investigation has determined that minority and immigrant communities in Brooklyn are high targets for housing scams in New York, reports WNYC. The nonprofit Center for Public Integrity has found that several groups who were allegedly helping those at risk of foreclosure (through government-backed loan modification and foreclosure prevention programs) were actually conning them out of ten of thousands of dollars and, in some cases, fraudulently acquiring their homes.
Investigative reporter Fred Schulte spoke with WNYC and gave a synopsis on how the scams were, and continue to be, executed. "They’ll send a mailer out to people that are in financial trouble or facing foreclosure and then, maybe follow up with a telemarketing call to try to talk you into coming into their offices and exploring ways that you can avoid being foreclosed on," he explained. Once they lure people in, the firms present an appearance of legitimacy, even having lawyers present who were in on the scheme.
In some cases, the homeowners were charged fees upfront for loan modification services that were never delivered. But other cases were far worse: According to Schute, owners were convinced into short selling their homes and transferring the deed to a company that was also owned by the crooked firms. Later, the owners would experience harassment, eviction, and outrageous rent charges from the new owners they inadvertently sold their property to.
According to the investigation, at least six companies in New York tricked homeowners into signing over their deeds. The majority of the 289 targeted homes were in neighborhoods that was about 70 percent non-white. Though the scam happened across the five boroughs, it was particularly rampant in Brooklyn. But why? According to Schulte, the rapidly increasing property values in the borough made it easier for the scam to work.
Three of the men behind Homeowner Assistance Services of New York (HASNY) and Launch Development LLC, bogus companies responsible for pulling off several scams, have been charged in federal court. Nonetheless, despite the ongoing criminal cases, the victim owners remain uncertain about the fate of their properties.