Fraud Hates Sunlight: The Case for Buying More New York Notes

To Buy or Not to Buy New York Notes?

As a native New Yorker, I can tell you that New York—much like Chicago—is not a market for the weak at heart. You need a seasoned team, experienced attorneys, strong servicers, and perhaps most importantly, the mental toughness required to survive some of the longest timelines and most complex workouts in the country.

Over the years, investors have been given plenty of reasons to avoid New York notes: judicial foreclosures, multi-year timelines, expensive legal costs, tenant protections, bankruptcy delays, heirship issues, probate complications, and title defects. If you know, you know.

And yet, NAPNATION continues to buy New York notes.

In fact, as I write this article, we recently sold a Brooklyn asset and are actively working through a foreclosure in the Bronx. New York remains a meaningful part of our business—not because it is easy, but because difficult markets often create tremendous opportunities for investors who are equipped to handle them.

This article focuses on one of the most frightening items on that list: deed fraud.

Among seasoned asset managers, Brooklyn has long carried the nickname “Crooklyn.” While anyone who has spent time in Brooklyn over the last twenty years knows the borough has evolved dramatically, the nickname reflects a very real concern that has followed New York real estate for decades: fraudulent transfers, title disputes, forged deeds, and bad actors looking to profit from other people’s equity.

Truths like these bleed into a larger reality about investing in New York. It is a niche market where locals—and those with the resources, patience, and conviction to navigate complexity—play to win. There is no shortage of capital available in New York. In fact, it remains one of the largest mortgage markets in the country by dollar volume due to the size of its housing market and average loan balances.

New York does not suffer from a shortage of lenders. It suffers from a shortage of investors willing to navigate the complexity.

“Ironically, many of the same factors that scare investors away create opportunity for those with experienced teams. Long timelines, title issues, probate challenges, heirship disputes, and yes, even deed fraud often result in fewer bidders, wider discounts, and less competition.”

That does not mean these assets are easy.

It means they are misunderstood. And misunderstanding is often where opportunity hides.

The best note investors are not necessarily those who avoid risk. Successful investors learn how to identify, price, and manage risk. In my experience, opportunity often exists precisely where others are unwilling to look.

Deed fraud is a perfect example.

Why Brooklyn Became Ground Zero

This is not a new problem in New York or within the real estate industry. Brooklyn became ground zero because it sits at the intersection of generational wealth, heirship issues, and massive appreciation in historically Black neighborhoods.

A 2026 report from the Center for NYC Neighborhoods found that homes worth roughly $400 million are at risk each year from deed theft and predatory title schemes, with Central Brooklyn identified as one of the most vulnerable areas.

And who can forget the disbarred attorney convicted in 2025 of stealing the deeds to eleven Brooklyn properties in a decade-long fraudulent scheme?

But deed theft did not begin there.

Since the 1980s, schemes such as equity stripping and foreclosure rescue scams have targeted Brooklyn due to the substantial appreciation many neighborhoods experienced over multiple generations. Communities once overlooked have undergone dramatic gentrification and value increases. As property values climbed, sophisticated fraudsters increasingly viewed these neighborhoods as fertile ground for schemes designed to capture accumulated equity and generational wealth.

Brooklyn’s rising property values transformed an old title-risk problem into a major financial crime problem.

The 30-Year Evolution of Title Risk in Brooklyn

Today’s deed theft epidemic did not appear overnight. It evolved through decades of foreclosure crises, distressed housing stock, probate complications, and gentrification cycles that Brooklyn has experienced since the 1970s.

New Technology, Evolving Solutions

In response to growing concerns surrounding deed theft and fraudulent conveyances, New York has implemented and proposed measures designed to increase transparency and accountability throughout the ownership transfer process.

At the same time, technology is rapidly transforming the title and servicing industries. Modern investors now benefit from real-time recording data, automated ownership verification tools, digital document tracking, AI-powered title review, and enhanced identity verification.

Ironically, greater transparency may ultimately make New York notes more attractive—not less. As bad actors lose places to hide and title information becomes easier to verify, sophisticated investors may find that the risk-adjusted opportunities in New York become increasingly compelling.

Summary: Know Thy Seller

The time is going to pass anyway. With the right patience, the right pockets, and the proper goal, a New York note or two can set your capital stack right. It can help you catch up on a retirement plan, accelerate a life plan, or create opportunities that simply do not exist elsewhere.

“So the most important takeaway I have is this: Know Thy Seller. In our community, we often joke that this should be the Ninth Covenant of Note Investing. KYS — Know Your Seller.”

Since 2013, when we opened our doors, our motto has been Safety First. In note investing, that means relationships matter. It means when I source notes for our community, there is a relationship behind every trade. It means understanding not just the asset, but the source of the asset. It means reputation matters.

Our core group has invested together for well over five years, and many of us for more than a decade. That level of trust gives investors something most people in this industry never experience: confidence. Too many investors leave this business because they bought from the wrong people, not because they bought the wrong assets.

Technology can help identify fraud, verify ownership, and uncover title defects. But technology cannot replace relationships.

In New York, the title may be complicated, the foreclosure may take years, and the paperwork may be stacked to the ceiling. But if you know the seller, deed fraud is light work.