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James J. Quail & Associates, P.C. James J. Quail & Associates, P.C.
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Case Study #1: Eviction After a Fraudulent Sale

Fraudulent Sale

We received two new cases last month that required immediate legal intervention to prevent a foreclosure auction, as well as to stop an eviction after a fraudulent sale.

A homeowner contacted us that they were being evicted from their family home when it was sold to a third party using a forged power of attorney. We learned that there was a ten-year history of mortgage fraud, straw buyers and short sales regarding this Queens property by a corrupt loan officer/real estate agent.

Ten years ago, the client was added to the deed on his parent’s property to take out a small $20,000 loan. The loan officer/real estate agent borrowed more than $400,000 on the property, and it is not yet clear where the additional loan money went.

That loan was not paid, and four years later, the same loan officer/real estate agent sold the property to a straw buyer in a short sale using a forged deed, and by using the straw buyer’s credit to pay off that loan. The deed was signed by a New York attorney allegedly acting on behalf of the owner using a forged Power of Attorney. A straw buyer is a person that does not intend to reside at the premises but allows their credit to obtain a loan - usually for a fee of $5,000-$10,000 -, and for a short period of time.

After six years, that straw buyer became fed up that the mortgage in her name was not being paid and affecting her credit. The straw buyer tried to exact an additional $20,000 from the loan officer/real estate agent, who refused to pay. As a result, she decided to sell the property to a real estate investment company. That entity purchased the property and commenced eviction proceedings against our client.

We commenced an action in Queens Supreme Court to rescind the deed for fraud, and for a temporary restraining order (TRO) and injunction preventing the eviction case in housing court from proceeding. We were successful in obtaining the TRO and injunction while we prosecute the action for rescission based on fraud.

The title company insuring the third party real estate investment company took over the defense, and it will be most likely that they will compensate their insured and the property will go back to our client free and clear of the mortgage loan.

We handle any type of real estate involving a transfer of real estate using a forged deed or fraudulently procured deed. Call us today to set up a consultation!