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NEW YORK – 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 man on the phone offered a godsend: The foreclosure could be averted, the legal fees could be eliminated and the monthly mortgage payment he could no longer afford could be trimmed.
Soon, Murray was sitting at a conference room table in the man's office, finalizing the fix he believed would keep him in his home. It didn't take long for the sad truth to become clear: This aging immigrant 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.
Deed theft has been reported around the U.S., from San Diego, where prosecutors recently netted a guilty plea and six-year prison sentence for a man involved in deed thefts of at least 15 homes, to Detroit, where the register of deeds hopes to expand his fraud unit to keep up with a crush of cases.
It has been most severe in gentrifying neighborhoods quickest to rebound from the housing crisis, nowhere more so than ever-pricier blocks of New York.
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. Sheriff Joseph Fucito 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.
"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, working as a telephone technician and then a police traffic control agent. 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 to retire. Money became tighter, but after his wife died suddenly of ovarian cancer in early 2009, Murray's real financial pinch set in. He cut back on food, kept the house darkened and found other ways to scrimp.
His savings disappeared, he fell behind on the mortgage and a default notice alerted him that he was being referred for foreclosure. He had already spent $5,000 on an attorney to try to restructure his debt when that chance call came in January 2014, from a man named Mario Alvarenga.
Murray said Alvarenga told him his mortgage could be modified, and the fix wouldn't even cost anything, so long as he 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.
After signing a stack of papers at Alvarenga's office, Murray left awash in relief. But, soon after, Alvarenga phoned to tell him the loan modification wasn't approved, pleading for patience. Murray grew worried and suspicious, and Alvarenga became impossible to reach. It all climaxed with Murray finding a man on his property taking pictures and informing him the house now belonged to him. Later, an eviction notice on his door ordered him to vacate.
The chilling realization dawned: "They stole my home from me."
Murray got help from attorneys at JASA Legal Services for the Elderly in Queens, who found a vast paper trail they say was part of the ruse to make the transaction look legitimate. What Murray believed was a mortgage restructuring was actually a sale, meticulously documented in paperwork. 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.
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, including two who 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." As Murray's lawyers fight for the return of his home's title, he now sees why he was targeted.
"They see that I was desperate, that I was in need," he said. "But I can see justice coming."
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