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  1. #1
    Join Date
    May 2012
    Posts
    2

    Question Scammed Out of Our House

    My question involves real estate located in the State of: NY

    Hello All - stumbled upon this forum and thought it might be a good place to see if anyone would be able to offer advice or has been in a similar situation.

    Back in 2010 we were having trouble paying for our mortgage, we missed a few months and were trying to work out a loan modification with the lenders. The two-family house is under my brothers name, and he was not living on the property, we had a hard time with the loan modification because they said it was listed as an investment property.

    A family friend introduced us to a friend of his saying that he could help. The help offered was that he would take over the property, pay the current mortgage and also pay the back mortgage - this was all so that it would save my brothers credit. At this point, all we cared about was saving my brothers credit and were willing to let the house go.

    My brother met with this "friend" and signed some documents. I'm not sure what was signed and we were not given any copies (yes I know, not smart at all), it might have been power of attorney or some sort of transfer. This happened in August 2010.

    I stayed in the basement of the house paying rent ($800) to the new "owner." After a series of events between me and him, I decided to leave and move out in February 2011.

    My brother has been receiving statements and collections for the mortgage up till now. So needless to say, this "friend" did nothing to fix his credit, and I don't believe he paid any of the mortgage at all. There are tenants in the 1st floor and 2nd floor - the total rent back in 2010 was $3,000

    I'm not sure what to do at this point as my brother doesn't either. It seems like he's been pocketing the rent money and not paying anything to the lenders, further ruining my brothers credit. If my calculations are right ($3,800 for 20 months) he has pocketed $76,000.

    So my question is ... what legal action can we take with this? And, who owns the property if we're still receiving statements in my brothers name?

    Is it safe to assume that we still own the property and he just scammed us for the past year and a half, and we can just walk in and take the property back??

    Any help would be much appreciated!

  2. #2
    Join Date
    Jan 2006
    Posts
    25,741

    Default Re: Scammed Out of Our House

    First, are you even a borrower on the mortgage loan? If not, you cannot do anything. It will be up to your brotheer.

    so, since the contracts were signed by brother and you do not even know what he signed, brother needs to take all pertinent paperwork to an attorney who can read everything and see what is going on.
    I am not an attorney and any advice is not to be construed as legal advice. You might even want to ignore my advice. Actually, there are plenty of real attorneys that you might want to ignore as well.

  3. #3
    Join Date
    May 2012
    Posts
    2

    Default Re: Scammed Out of Our House

    I am not a borrower on the mortgage, that's part of the reason this has been going on for this length of time. I spoke to my brother and he can't remember what documents he signed with this guy but he just keeps receiving the statements and collections for the mortgage.

    He didn't get any copies of what he signed with him either. So the only paperwork my brother has is what he has with the lenders.

    I just wanted to know if the house is legally my brothers (since he's still receiving statements) or does it belong to the "friend" who offered his help?

  4. #4
    Join Date
    Jan 2006
    Posts
    25,741

    Default Re: Scammed Out of Our House

    owing the mortgage does not mean he does or doesn't own the house. Holding title to a house and owing for mortgage on the house are two very different things. Without knowing what was signed, there is no way to know if he still owns the house or not.
    I am not an attorney and any advice is not to be construed as legal advice. You might even want to ignore my advice. Actually, there are plenty of real attorneys that you might want to ignore as well.

  5. #5
    Join Date
    Mar 2008
    Posts
    1,995

    Default Re: Scammed Out of Our House

    There's a few issues here.

    First, you stated the house is under the name of your brother, but you live there and paid the mortgage. Under normal circumstances, the home owner living in the home is protected under the "NY State Home Equity THEFT Prevention Act". Unfortunately, it appears that the home is not technically stolen from the actual home owner living there himself, so it MIGHT not apply. See:

    http://en.wikipedia.org/wiki/The_Hom...Prevention_Act

    Even so, I would have your brother check with attornies to see if it can still apply to him since family is living there, were making the mortgage payments for him, and the owner is scammed out of a home. What is act does is require additional elements included in a P&S contract, i.e. papers that your brother signed, requirements that scammers often cannot meet, and if not met, invalidates the whole contract. It does not make it a crime, however.

    Second, many "home rescue" scams involved using a "Sub 2" transaction, short for "subject to", meaning "subject to the mortgage". Typically the home is "quit claimed" to the scammer with the scammer agreeing to make the mortgage payments. Normally there is no down payment, but sometimes a payment is made. However, if the mortgage payments are NOT made, then the scammer (buyer) is technically in default of the "sub 2" contract, and the seller can sue to have it reversed. See:

    http://www.parhamlawfirm.com/2011/09...-transactions/

    Third, if the scammer collected the rents, and FAILED to make the mortgage payments, as it appears here, then it is considered "equity skimming (or stripping)", and depending on the type of mortgage, many are federally insured, is considered a Federal crime: See:

    http://jpdefense.com/new-york-crimin...uity-skimming/

    You may want to use the lever of approaching the authorities to report the crime if the scammer does not quit claim the deed back to the original owner. There is a phone number in the above article you can call for further info.

    Just to add there's been cases where such scams are reported to the local district attornies in NY State, I read of a case in Weschester County, is considered a crime, prosecuted, so the scammer often gives up on his claim when this occurs.

    As JK mentioned, your brother is the owner, so he'll need to take action.

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