BP Adams, Cornegy Call On Feds To Investigate City’s TPT Program


Brooklyn Borough President Eric L. Adams and City Council Member Robert Cornegy, Jr. (D-Bedford-Stuyvesant, Northern Crown Heights), the chair of the council’s Committee on Housing and Buildings, today called for a full-scale forensic audit and investigation on the federal, state, and city levels into the issue of deed fraud in the borough of Brooklyn, including the role that the New York City Department of Housing Preservation and Development’s Third Party Transfer (TPT) program.

The TPT program has been the subject of an evolving series of KCP stories documenting how the program has taken a number of black and brown properties that are fully owned and paid for with no mortgage. The series has also questioned the state judiciary system, and how only three judges oversee almost all of the foreclosure cases.

Brooklyn Borough President Eric L. Adams
City Councilman Robert Cornegy Jr

In letters Adams and Cornegy sent last week to United States Attorney for the Eastern District of New York Richard P. Donoghue, United States Attorney for the Southern District of New York Geoffrey S. Berman, New York State Attorney General Barbara Underwood, Brooklyn District Attorney Eric Gonzalez, and Public Advocate Letitia James, the lawmakers additionally asked for partnership with the City Council to enact a temporary moratorium on TPT seizures and other foreclosures in Brooklyn such as to ensure no illegal activity is occurring.

“We can no longer ignore this. We have an obligation and responsibility to protect these homeowners. I cannot reiterate this enough,” said Adams. “Home ownership is one of the most powerful ways of New Yorkers in all ethnic groups and particularly black and brown New Yorkers to translate generational wealth.  When a home is seized either illegally or through governmental means that is traumatizing of the family.”

Adams noted that some of the properties taken through TPT foreclosures have been in the family 30 and 40 years, and were fully paid off, and are now being taken for a relatively minor amount of property and water taxes for properties now worth over $1 million.

Cornegy noted while the TPT program aims to keep housing affordable it shouldn’t be done at the expense of taking all the equity of longtime homeowners in black and brown communities.

Under the program, the city gives ownership to properties behind on property taxes, water bills and in some cases building violations to favored non- and for-profit developers for $1 plus $8,750 per unit minus the supers unit. At the same time, the former owner loses all their equity in the property.

These favored developers are also given good incentives to renovate the properties as HPD gives them renovation loans with often 1 percent or no percent interest, and in which the developer gets a 10 percent development fee.

Attorney Yolande I. Nicholson, president of the New York State Foreclosure Defense Bar, who works with several of the property owners who have lost their property, alleged that the city is also playing fast and loose with property values lowering them so the fines can fit a certain threshold to take the property, and then adjusting them back up when the non- and for-profit developers take ownership.

Nicholson also questioned the state office of court administration, which has overseen a large number of quick foreclosure proceedings in the last few years in what has become “a commodity market run every Thursday out of 360 Adams Street” [the state courthouse building in Downtown Brooklyn].

“Ten years ago, New York State declared that it was critical that we protect and save homeownership across the city following the 2008 financial and sub-prime mortgage crises. Yet today, we’re facing the largest number of African-American children sleeping in homeless shelters since World War II and the Great Depression,” said Nicholson.

While the lawmakers called for an investigation of the TPT program, and brought homeowners affecting by the program to the news conference, they also brought homeowners affected by private deed fraud to tell their story as well.

“Borough President Adams is someone who cares about homeowners and is hearing our voices,” said homeowner Ralph Parker. “Presenting a deed to the courts can take some time, and what happens is you get phone calls asking whether there’s an interest to sell the home. People know the system and create fictitious names and that’s how they get defrauded. Even if the fraudster is found, the homeowner still needs a lawyer to file papers and get the property back in their name. It is not fair that criminals can do this, and we the victims must pay thousands of dollars to rectify it with nobody being punished.”

“My house was not only taken from me, but I’m also about to be taken into custody by the New York City Sheriff’s Office,” said homeowner Van Walker. “They came to my house on August 2nd, threw me out — as well as my five-year-old daughter and 20-year-old son — and told us to pack up and leave the house under the threat they would incarcerate me. This was an order from the [Kings County] Supreme Court foreclosure division. I refused to sign my deed in lieu of foreclosure, so I was held in contempt of court and sentenced to jail time. The deed, bills, and taxes are still under my name.”