Housing Scam Artists Defraud Brownsville Residents

At the peak of the housing bubble, the median price of a two-family home in Brownsville, Brooklyn was going for nearly half a million dollars. At the time, it seemed like a boon for long time homeowners. But housing advocates say it was a false prosperity that attracted a cottage industry of scam artists that damaged this low income community. WNYC’s Cindy Rodriguez has the story of one family who lost a home that had been in the family decades.

REPORTER: Robert Pascall’s wife, five kids, four grandkids, two son-in-laws and a disabled family friend used to live at 198 Grafton Street, in Brownsville, Brooklyn.

They were evicted at the end of last year and with nowhere else to go, they packed into a one room basement apartment in the Bronx. Mattresses cover most of the floor space. Books, clothes, and toys are stacked up against walls. The family bumps into each other inside the tiny kitchen.

Pascall, inherited the house on Grafton from his father. Property records show the family started borrowing against the home in 1989. At first it was a modest $40,000, a few years later $55,000 and in 2001 in the middle of the housing boom it was a $130,000 dollar loan that got him in trouble. He couldn’t afford the payments, ended up in foreclosure and says he didn’t know where to turn.

PASCALL: These guys came in. They said there’s a way out, there’s something they can do and they the people to do it and they legit.

REPORTER: What Pascall did was sign the deed over to two strangers he hardly knew. He says he thought it was a temporary arrangement that would allow him to keep his home while he worked to improve his credit so he could secure another mortgage.

PASCALL: They gave me paper work and everything and insisting on me going through this here which I did. I did I was glad to do it I was in trouble.

REPORTER: While the new owner did pay off Pascall's $130,000 loan, he took out a $273,000 mortgage to do it. Pascall says he doesn’t know who kept the remaining money. And it only got worse from there. According to Pascall, the so-called foreclosure rescuers then sold the property to two friends who took out a $400,000 mortgage on the home, a shocking amount for a dilapidated house in one of the poorest districts in the city. Pascall says no one would return his calls and he was left in the dark for several months:

PASCALL: Finally his friend called me and said that I should move out. Actually, he said I should pay rent for $3500 or move out. I said, "What’s going on?" and he said, "You no longer own the home. It’s my home now."

REPORTER: Noone is living at 198 Grafton. The house has been empty ever since last November, when the Pascalls were evicted. The Marshalls notice is still posted to the front door.

WAGNER: Once the owner is out of possession this is what happens.

REPORTER: Rick Wagner is a housing attorney at Brooklyn Legal Services. He’s pointing to the garbage that’s been thrown on the front lawn and the overgrown weeds poking through it.

WAGNER: The fact that this house looks like this means whoever owns 196 over here and 199 across the street probably lost 15 or 20 percent of the fair market value of their homes.

REPORTER: Wagner says deed scams were rampant in Brownsville and other poor neighborhoods. The outspoken lawyer accuses the Brooklyn District Attorney’s office and all DA’s around the city of ignoring the problem, that he calls a civil rights issue.

WAGNER: 90 percent were concentrated in minority neighborhoods. Not just in New York City, but around the country.

REPORTER: Wagner says his office and many other non-profits are overwhelmed and can’t take on too many deed scams because they are complicated and time consuming. Robert Pascall was turned way from a few pro-bono agencies, he says the Brooklyn D.A. also rejected his case.

REPORTER: In the last decade, the Brooklyn District Attorney’s office has only prosecuted 50 real estate fraud cases. Though 45 of them did result in a plea or conviction.

REPORTER: Housing groups say that was a drop in the bucket. But that’s expected to change.

VECCHIONE: We’re coming to it with a lot of time to do something. We’re going to make an impact.

REPORTER: Michael Vecchione is chief of the Rackets Division and is supervising a new unit that will concentrate solely on real estate fraud. In March, the Brooklyn D.A. received $875,000 to fund it:

VECCHIONE: What we needed is what we now have which is the money to have dedicated units to deal with this so that assistant district attorneys aren’t torn five different ways to Sunday in terms of the number of cases that they have.

REPORTER: He says right now the unit has 100 cases. And more are expected. Vecchione says once the economy went bad the problem only escalated.

VECCHIONE: And now the flood gates are opened and it’s a tidal wave.

REPORTER: While cases play out in court, Robert Paschall fears his home will be sold to an unsuspecting buyer before he can win it back. He has sued in civil court but two private lawyers have dropped him mostly because he couldn’t afford to pay them. Recently, he showed up at a motion hearing representing himself in a room full of dozens of dark suited lawyers more than familiar with the court jargon and the fast pace of a demanding judge. Pascall was nervous and befuddled and wasn’t sure whether to check a box for plaintiff or defendant.

REPORTER: The 54-year-old makes a living by fixing computers out of a neighbor’s basement and so he’s in his old neighborhood a lot. His daughter also cares for the old woman who lives next door to their abandoned home. Mahogany Pascall is 20 years old.

REPORTER/MAHOGANY: I’m just wondering if it’s hard for you to come here everyday. (sigh) Yeah, I mean I’m right next door. And I look at it and it’s all messed up and stuff like that but what can I do.

REPORTER: Mahogany says occasionally there is a potential buyer poking around. Her older sister has been trying unsuccessfully to get a loan and buy it back. Currently, the home is listed at $275,000 although the broker showing it says the best offer is $175,000 in cash. Esthela Cruz says the house is in such poor condition no bank would ever give a potential buyer a loan which means the only interested parties are investors looking to flip the property.

REPORTER: The Pascall family is well known on their old block. Ramel Miller was sweeping the front of his sister’s home where he lived. He’s known the Pascalls since he was four years old and says he felt bad when he realized his neighbors had lost their home.

MILLER: I felt like I was victimized because I’m losing out. They like family. We’ve been here next door forever. They know my nephews, they watch em, they take em to church with them. It’s like losing a piece of the family.

REPORTER: Robert Pascall feels beaten down by the struggle to get his house back , not to mention all the driving back and forth between the Bronx, where he sleeps and Brooklyn where the family does most of their living. On the front porch of his home are things he left behind.

PASCALL: These are some of the things I accumulated over the years, holding on to survive in our society, you know like parts to cars and tools.

REPORTER: Pascall says there’s more inside. But he says he tries not to think about his possessions.

PASCALL: I don’t want to be attached to anything because at this time, the courts haven’t done anything and I’m not sure what’s going to happen. I myself, I’m powerless.

REPORTER: Even so, Pascall hasn’t given up. He’s taken his case back to the Brooklyn D.A.. For WNYC, I’m Cindy Rodriguez