Legally Blind 89-Year Old WW II Vet Faces Boot From NYC Residence Of 40+ Years After Being Victimized In Home Equity Refinancing Ripoff

In Springfield Gardens, Queens, the New York Daily News reports:

• World War II veteran Lucius Dorsey thought he'd seen the worst in people after being stationed in the Pacific in 1942. Now, more than 40 years after leaving the Navy, the legally blind 89-year-old vet is fighting a nasty battle on the home front.

• Dorsey is the victim of a deed theft scam and is battling eviction from the Springfield Gardens, Queens, home he bought in 1969. "Someone is trying to steal from us," said Dorsey, who lives with his wife and two sons. "I'm blind. I can't understand it."

• The scammer accused of preying on the Dorseys in 2007 is Allen Robinson - a person Dorsey's wife, Wanda, 52, thought was a "friend with good credit." But instead of helping them refinance, Robinson had the deed transferred into his name. "They did not know that they were actually signing away their title to the property," said Wendy Dolce, a lawyer from the City Bar Justice Center. Robinson is now in an upstate prison - not for scamming the Dorseys, but for drug possession, records show.

• Most deed theft scammers zero in on their victims by checking foreclosure listings, which are a matter of public record. "If the person is crafty enough, they shove 100 papers in front of your face and say, 'Sign here to get rid of your problem.' Somewhere in that pile of papers they sign away their deed," said Daniel George, a counselor at Neighborhood Housing Services of Jamaica.

• Robinson paid off the Dorseys' mortgage and took out a larger one, property records show. Then he "pocketed the cash and disappeared," Dolce said. The Dorseys are appealing the sale of their foreclosed home in hope of negotiating a mortgage rate they can afford. The trouble is Robinson took out the last mortgage, so the Dorseys aren't customers of EMC Mortgage Corp., which initiated the foreclosure. "My husband spent half of his life here," Wanda Dorsey said. "He did nothing wrong. He doesn't deserve this."(1)

Source: Battle on the home front: WWII vet fights eviction after falling victim to deed theft scam.

(1) Support in New York case law for the proposition that a title transfer as described in this story where the homeowner is tricked into signing over a deed is subject to being voided and set aside can be found in Marden v. Dorthy, 160 N.Y. 39; 54 N.E. 726 (N.Y. 1899), in which the New York Court of Appeals, the state's highest court, set aside a similarly obtained title to real estate, and ruled that a subsequent mortgage placed on the property to be unenforceable. The court held that the instruments were void because the property owner never intended to convey her property and because the false instruments were not converted into genuine instruments by the act of recording.

Marden v. Dorthy has recently been cited in:

• First Natl. Bank of Nev. v Williams, 2010 NY Slip Op 04737 (App. Div. 2nd Dept. June 1, 2010),
• Ameriquest Mtge. Co. v Gaffney, 839 N.Y.S.2d 203, 41 A.D.3d 750 (App. Div. 2d Dept., 2007),
• Euba v Euba, 40 A.D.3d 689; 835 N.Y.S.2d 688, 2007 NY Slip Op 04069 (App. Div. 2d Dept., 2007),
• Karan v Hoskins, 22 AD3d 638; 2005 NY Slip Op 07663 (App. Div. 2d Dept., 2005),
• Hazim v Dross, 2 A.D.3d 268; 768 N.Y.S.2d 331, 2003 NY Slip Op 19570 (App. Div. 1st Dept., 2003),
• Lido Realty LLC v 67-79 LLC, 27 Misc 3d 1238; 2010 NY Slip Op 51096 (NY Sup. Ct. Bronx County, June 21, 2010),
• Wells Fargo Bank, NA v Edsall, 22 Misc 3d 1113; 2009 NY Slip Op 50112 (NY Sup. Ct. Suffolk County, 2009),
• Johnson v Melnikoff, 20 Misc 3d 1142; 2008 NY Slip Op 51832 (NY Sup. Ct. Kings County, 2008), aff'd Johnson v Melnikoff, 65 AD3d 519; 2009 NY Slip Op 06119 (App.Div. 2nd Dept. 2009),
• Lopez v Bisono, 2008 NY Slip Op 30342 (NY. Sup. Ct. Queens County, 2008),
• Olympus Servicing, L.P. v Lee, 15 Misc 3d 1124; 2007 NY Slip Op 50833 (NY Sup. Ct. Kings County, 2007),
• Scott v Doyle, 12 Misc 3d 1163; 2006 NY Slip Op 51012 (NY. Sup. Ct. Queens County, 2006).

Further, whether the deed transfer described in the New York Daily News report is absolutely void (ie. void ab initio), or merely voidable should be of no consequence in also voiding the subsequent mortgage placed upon the property at the time of the ripoff.

If the transfer is found to be void ab initio, the mortgage will automatically be absolutely void as well.

Should the conveyance be found to be merely voidable (as opposed to being absolutely void), the lender who unwittingly financed the ripoff could avoid having its lien voided and set aside if, and only if, it can establish that it was a bona fide purchaser / encumbrancer at the time of making the loan. In this case, because the victimized homeowner never relinquished possession of the home, the lender had the duty to inquire of those in possession as to any unrecorded rights or equities they may have in the property. The lender's failure to make any inquiry into the rights of the victimized family, who were in possession at the time the mortgage was made, leaves its mortgage susecptible to being voided. See Phelan v. Brady, 119 N.Y. 587; 23 N.E. 1109 (NY 1890):

• "Actual possession of real estate is sufficient notice to a person proposing to take a mortgage on the property, and to all the world of the existence of any right which the person in possession is able to establish."

Phelan v. Brady has recently been cited in:

• Maiorano v Garson, 65 A.D.3d 1300; 886 N.Y.S.2d 190; 2009 NY Slip Op 06812 (App. Div. 2nd Dept. 2009),
• 1426 46 St., LLC v Klein, 60 A.D.3d 740; 876 N.Y.S.2d 425; 2009 NY Slip Op 1784 (App. Div. 2nd Dept. 2009),
• Ward v. Ward, 52 A.D.3d 919; 859 N.Y.S.2d 774; 2008 NY Slip Op 4984 (App. Div. 3d Dept. 2008),
• Doyle v. Siddo, 31 A.D.3d 697, 818 N.Y.S.2d 474; 2006 NY Slip Op 05908 (App. Div. 2d Dept. 2006),
• Harris v Thompson, 24 Misc 3d 1248; 2009 NY Slip Op 51919 (Sup. Ct. Queens County, 2009),
• Lopez v Bisono, 2008 NY Slip Op 30342 (NY. Sup. Ct. Queens County, 2008),
• Wells Fargo Bank, N.A. v Reid, 2008 NY Slip Op 30252 (NY. Sup. Ct. Queens County, 2008),
• 116 Madison St., LLC v Seid, 25 Misc 3d 1207; 2009 NY Slip Op 51993 (NYC Civ. Ct. NY County 2009),
• Haslacha, Inc. v Jubilee, Inc., 2005 NY Slip Op 50908 (NYC Civ. Ct. NY County 2005).

See also, Brooklyn Court Rulings Void Deeds & Subsequent Mortgages Used To Drain Home Equity In Bogus Sale Leaseback Foreclosure Rescue Scams.