NEW YORK (AP) — The phone call came as Raymond Murray neared the bottom of his luck. His wife had died, his career had been ended by injuries, and struggling to get by on his disability check, he had scraped together just enough to pay a lawyer to avoid imminent foreclosure on his modest Brooklyn home.
The voice on the line offered a godsend: No more attorney fees, no more foreclosure, a lower monthly mortgage, and all this help for free.
Murray was soon picked up by a black Mercedes-Benz, off to meet the man on the phone. Not long after, he was back at the office again, property deed in hand and a ring of people around a conference room table, finalizing the supposed fix to keep him in the home he hoped to die in.
Eventually, the blessing Murray thought he had found was revealed as a curse. Amid unfulfilled promises, unreturned calls and unwelcome visitors at his door, the truth became clear: This aging immigrant, who thought he'd realized an American dream, was scammed out of his home.
Around the U.S., deed theft has emerged as one of the most sophisticated and devastating frauds ever to menace homeowners. Foreclosure "rescue" scams that have stolen thousands of dollars from individual homeowners in the years since the housing collapse have been pushed by savvy perpetrators to their limit. They use lies to convince the desperate to sign over their title, then force them into homelessness or a years-long legal battle.
"The scammers are no longer content with stealing $5,000. Now they want the whole house," said Dina Levy, who heads the Homeowner Protection Program in the New York attorney general's office, which has spread word about deed theft and prosecuted culprits.
Although there are no firm numbers on how many cases of deed theft have occurred, they have been reported around the U.S., particularly in markets that have rebounded from the housing crisis or in neighborhoods that are gentrifying.
"It's growing, absolutely," said Kristen Clarke, who heads the Lawyers' Committee for Civil Rights Under Law, a nonprofit that has researched foreclosure-related fraud. "We're beginning to see these scammers operate in a far more bold way."
— In San Diego, federal prosecutors netted a guilty plea and a six-year prison sentence last year for a man who forged deeds on at least 15 homes, and then quickly sold them to the surprise of unwitting owners. The ringleader of what investigators called a "tangled web of deceit" netted about $2.2 million in the scheme. Buyers coaxed into purchasing the homes were left with worthless claims to titles.
— In Detroit, the Wayne County Register of Deeds is looking to expand its mortgage and deed fraud unit to deal with a crush of cases. The problem is so severe the office runs a round-the-clock property fraud hotline and has a marked deed-theft patrol car used by investigators following up on tips. Investors in Kuwait, Australia and the United Kingdom looking to capitalize on Detroit's resurgence are among those who have been caught up in scams.
— In Indianapolis, Crystal Francis, an attorney with Indiana Legal Services, tells of deed theft cases sprinkled throughout the area in recent years, with elderly people the preferred targets. One woman victimized by a scam while in the throes of a liver problem and dialysis treatment was overcome with shame. She couldn't muster the strength for a protracted legal fight, choosing to simply walk away from her longtime home and move in with a friend. "She was so discouraged," Francis said. "She just concluded it was too much."
The problem has been gravest in New York, particularly the ever-pricier neighborhoods of Brooklyn. The New York sheriff's office has taken a lead on the cases and since 2014, the office has amassed more than 1,700 complaints, with hundreds under investigation, and some 32 arrests already tallied.
The cases can take investigators years to solve. Sheriff Joseph Fucito points to a graphic of a single case, a snare of lines representing the three partners at the center of the probe, and their ties to 110 different companies and 189 properties. In this case, like many others, Fucito said the perpetrators did a mix of above-board and fraudulent business through a series of limited-liability companies, leaving it to detectives to pinpoint victims.
"Some of it's legitimate, some of it's not legitimate, and we have to pick through it," Fucito said. "But all of it smells funny."
The sheriff ticks off the ways the thefts happen, from opportunists cobbling together documents on vacant properties to those transferring the home of an unwitting family member into their name, to fake housing assistance businesses that prey on those in financial crisis.
Cases in that final category are the hardest to prove, and the toughest to undo. Companies use misrepresentations to get a home signed over to them and often use licensed professionals to notarize and file legal documents.
"You can just wake up," Fucito said, "and it happened on a piece of paper."
Murray came to New York in 1989 from his native Guyana, and dove into long days at work — as a telephone technician sometimes chased by dogs, and later as a police traffic control agent dodging irate motorists. He and his wife Desrie, a teacher, lived in a relative's basement, then rented a home before saving enough to buy. It wasn't much — a two-story brick house with a white metal gate, on a quiet, tree-lined Brooklyn street — but he felt like he finally could see what he'd been working for.
"It was an American dream," the 67-year-old says.
After two on-the-job accidents, Murray was forced into retirement. Money became tighter, and the couple refinanced their mortgage for $388,000 in 2006 and took out another $21,800 loan a year later to stay afloat. After Murray's wife died suddenly of ovarian cancer in early 2009, the real financial pinch set in. He cut back on food, kept the house darkened and found other ways to scrimp.
"I tried and I tried and I tried and I tried with my little savings," Murray said.
Before long, his savings were nearly gone and he was falling short on the mortgage, and in time, a default notice alerted him that he was being referred for foreclosure. Turning to an attorney to try to restructure his debt, he spent $5,000.
Then came that chance call in January 2014, from a man named Mario Alvarenga whose promises, Murray said, were exactly what he needed to hear. He was impressed by the black Mercedes that picked him up, by the politeness of the woman at the Homeowner Assistance Services office, and by the Alvarenga's professionalism.
"These people have class," he thought.
Murray left the office that day with a sense of hope he hadn't felt in years. He said Alvarenga told him his mortgage could be restructured to fit his income. It wouldn't even cost anything, so long as Murray fired his attorney.
Because of his poor credit, Murray said he was told, his home would need to go in the name of another company Alvarenga was tied to, Launch Development, for 90 days; then the loan modification would be finalized and the property could be put in the name of one of his children or, as he'd remarried, his new wife.
When Murray returned to Alvarenga's conference room, it was full of people — a man he was told was his new attorney, a real estate agent, a notary public and others. Murray, whose vision was blurred by cataracts, struggled to read stacks of documents presented for his signature — papers he said he was assured would keep him in his home.
After signing, Murray left that day awash in relief. That feeling was short-lived. Alvarenga phoned to tell him the loan modification wasn't approved, but pleaded for him to be patient. As Murray grew worried and suspicious, he tried several times to reach Alvarenga, each time turned away by a receptionist, he said.
"Well, what do I have to do, call the FBI?" he remembered saying. "Something is funny."
It all climaxed with Murray finding a man on his property taking pictures and informing him the house now belonged to him. An eviction notice was soon posted on the door, ordering him to vacate.
The chilling realization dawned: "They stole my home from me."
In many cases, a deed theft does not become evident to the homeowner until months or even years after it happened.
Francis, the Indiana lawyer, said some of her elderly clients became aware when strange mail started arriving in their box or when receiving an eviction notice. Deed theft victims are often older, or have some other perceived vulnerability, such as difficulty with English or a limited grasp of finances.
"People will say things like, 'I'm really stupid.' They're embarrassed," Francis said. "Having your trust broken is so harsh."
Sometimes, the fraud takes place entirely on paper. Bernard Youngblood, the register of deeds in Wayne County, Michigan, tells of a case in his office, when a man came to file a quitclaim deed transferring ownership on a property. A clerk recognized the address and went to a co-worker with a question.
"Are you selling your house to that guy?" she asked.
She wasn't. Youngblood said he faked a computer outage, leaving the would-be fraudster waiting at the counter. It bought enough time to get deputies to respond and make an arrest.
Today, Youngblood's office has an eight-person "war room" dedicated to fighting deed theft, with representatives of his office working alongside prosecutors and deputies. They've raised awareness for police more used to dealing with stolen purses or cars. "They had never heard of stolen houses," he said.
Undoing deed theft damage can take herculean efforts. Linda Fisher, a law professor at Seton Hall University who runs a legal clinic that frequently litigates mortgage fraud cases, says deed theft typically takes two to three years to resolve. Her first case, she said, took eight years.
While cases are often complicated, they are winnable, said Amy Mix, an attorney with Legal Counsel for the Elderly, a Washington-based affiliate of AARP. Homes are frequently returned to their rightful owners. And since it's often "the only asset of any real value that they have," it's a worthy fight, she said.
After finding the eviction notice on his door, Murray got help from attorneys at JASA Legal Services for the Elderly in Queens, who found a vast paper trail they believe was part of the ruse to make the transaction look legitimate. A real estate agent had even posted Murray's home on the multiple-listing service. ("Property sold 'as is,'" it said, in a listing detailing the brick construction, steam heat and $170,000 asking price.)
What Murray believed was a mortgage restructuring was actually a sale, meticulously documented in the paperwork, making the fight to undo it a legal challenge. A judge initially ruled against Murray on his eviction, but his attorneys got a stay of that order.
There is no resolution yet, but Murray has been allowed to remain in the house even as, on paper, he is no longer the owner.
Murray sees the whole ordeal as a battle between good and evil. When he received the call from one of his lawyers, Robert Seewald, telling him Alvarenga and others had been arrested and faced federal charges in the scheme, he says he felt as if he had seen an angel.
"These defendants manipulated and took advantage of vulnerable people," then-U.S. attorney Preet Bharara said in announcing the charges.
In court papers, Alvarenga's attorneys dismissed Murray's story, saying he had "simply conspired a plan to live for free, for as long as possible." But Alvarenga later pleaded guilty to conspiracy. He awaits sentencing. Six others also face federal charges in the case, two of whom have pleaded guilty.
Jim Druker, one of Alvarenga's attorneys, said, "Mario is just a nice guy who got caught up in something," and that it went "from overzealous salesmanship into the criminal arena."
Murray's lawyers are still fighting in court for the return of the title to his home. Meantime, he worries his neighbors will learn he was scammed and he says it's hard to trust people now, after his bitter experience with those who targeted him.
"They see that I was desperate, that I was in need," he said. "But I can see justice coming."