Provides for a notice of conveyance of real property to be sent to the owners of record of residential real property

Title of bill

An act to amend the real property law, in relation to notice of sale or transfer of ownership of residential property

Purpose

To require the county clerk or city register to provide notice to the owner of record when recording a conveyance of residential real property.

Summary of provisions

Section 1 of this bill amends section 291 of the Real Property Law to require the county clerk or city registrar, where applicable, to provide written notice to the title owner of record of the conveyance to a new owner. The person seeking to record such conveyance shall submit with the filing of the document of conveyance, a pre-stamped envelope with sufficient postage to mail a large envelope by first class mail.

Section 2 of this bill provides the effective date.

Justification

According to the Federal Bureau of Investigations ("FBI"), real estate and mortgage fraud is vastly on the rise. In 2007 the FBI received 46,717 Suspicious Activity Reports related to real estate and mortgage fraud compared to 35,617 in 2006 and just 6,936 in 2003. Only 7% of these reports documented an exact dollar amount in terms of losses, but even so, the total loss from this 7% was $813 million. The FBI's caseload has also escalated. By the end of fiscal year 2007, the FBI experienced a 47% increase in real estate cases from 2006 and a whopping 176% increase from 2003.

One of the more common means to defraud is through the fraudulent transfer of land title to obtain home equity lines of credit.Criminals also target residential vacant properties or houses put up for sale. In fact, the FBI reports that at least twenty percent (20%) of all title transfers are the result of some fraud. To facilitate these schemes, perpetrators often pose as new owners of a home in order to transfer the title. Once the title transfer is complete, the perpetrator can use the new title to obtain a home equity line of credit.

Among those affected by this egregious crime, the elderly are the most vulnerable victims. Senior citizens, often owners of homes that are fully paid for, without a mortgage, and therefore with no bank or institution having a vested interest in their property, are especially vulnerable to fraudulent transfers. Data from law enforcement and industry sources were compared and mapped to determine which areas of the country were most affected by mortgage fraud during 2007. Information from the FBI, Mortgage Asset Research Institute ("MARI"), Fannie Mae, RealtyTrac Inc., Interthinx, and Radian Guaranty Inc. indicate that New York State was among the top 10 mortgage fraud states for 2007.

Legislative history

2013-2014 A.4813 2011-2012 A.4748 2009-2010 A.3518-A 2007-2008 A.11801

Fiscal implications

None to the State.

Effective date

This act shall take effect the ninetieth day after it shall become law.