"Part of my research for this article was watching The Big Short"

August 21, 2018 12:59 PM

The million-dollar brownstone that no one owned
posted by the man of twists and turns (15 comments total)

This piece was great and horrifying. It suggests that a lot of the underlying factors of the 2008 crash have not been fixed, if someone like Barrington Adrian is still taking out near-fraudulent mortgages on properties with clouded histories.
posted by crazy with stars at 1:27 PM on August 21, 2018 [2 favorites]

That was fascinating. The fact that there are companies out there that basically manufacture evidence to support these shenanigans is amazing to me.
posted by sevenyearlurk at 1:31 PM on August 21, 2018 [1 favorite]

Even if the behaviours that lead to the crash end, this clouded title problem is going to haunt American real estate until the end of time.

I am exaggerating only very, very slightly when I say "end of time".
posted by jacquilynne at 1:41 PM on August 21, 2018 [1 favorite]

Is it wrong that I read this and just thought, wow with basic photoshop skills I can become a homeowner.
posted by Damienmce at 1:46 PM on August 21, 2018 [15 favorites]

I think this is a great start to our nationalize most of the housing supply program! Clouded history? Owned by the government!
posted by congen at 2:45 PM on August 21, 2018 [2 favorites]

Good god, what an amazing story. Such a shell game.

I particularly liked "Barrington Ebanks".
posted by suelac at 2:52 PM on August 21, 2018

Ah, Gowanus. We had to pay our landlord in cash, too. Nothing quite like walking eight blocks or so with two grand in your coat pocket on the same day every month.

I'm surprised Gowanus isn't the center of the musical theater universe, there are so many goddamn Tonys.
posted by grumpybear69 at 2:53 PM on August 21, 2018 [4 favorites]

Hm-mm. I don't want to say that this story is wrong, but I would want to look at the documents myself to see if the precise chicanery alleged really happened.

For one thing, in NY, the mortgage follows the note. That is, you can foreclose on a property holding the note, but not the mortgage (but not vice versa).

Also, because MERS is the other party to the satisfaction of the mortgage, it's not at all clear which party got paid.

Also, Adrian didn't get a million dollars from the house. Rosa & Co. should've gotten the $700K, or at least the difference between the value of the prior mortgage and the $700K.

So there are some holes here. But no doubt some weirdnesses.
posted by praemunire at 2:57 PM on August 21, 2018 [3 favorites]

OK, so I tried to find some of the online records pertaining to this property, even though the author doesn't give the address or BBL. Searching on Barrington Adrian, there's one Brooklyn property with a lot of paper on it that seems to more or less fit the narrative. AOTA bought a certain property in Brooklyn for $20K from Barrington Adrian on 12/20/13. So I think it's that one. But then the details don't line up perfectly, as discussed below (also the name of the notary on the satisfaction is different), so it's certainly possible I've made a mistake here.

But, if I'm looking at the right documents, you can see WMC, MortgageIT, MortgageIT as a sub of Deutsche, and then the trust Deutsche dumped it into in the chain of title recited in the satisfaction. It's a representative of a servicer hired by U.S. Bank, the trustee of the trust, who signed it. Could this be a complete forgery, as the article suggests? I don't want to say it's impossible; in this context, nothing's quite impossible. But you'd need a little more than one piece of paper to steal a mortgage from a trust. Remember, the servicer will be sending out a bill for the mortgage payment on that trust every month, based on its own records, and expecting a payment. If the payment doesn't get made, sooner or later the servicer is going to notice it, and begin foreclosure proceedings. So...I'm left with doubts, at least as to whether this played out the way the author suggests. That there was shadiness somehow, I don't question.
posted by praemunire at 3:31 PM on August 21, 2018 [3 favorites]

@praemunire - I guess technically the author didn't name it, but he did name the final LLC that purchased the property which is explicitly called [the address of the property] LLC.
posted by NormieP at 4:07 PM on August 21, 2018

As a title examiner, this article mainly gave me insight into how actual homicide detectives must feel listening to amateur-hour "true crime" podcasters' investigations. They think everything's a clue that might be pointing to a shady conspiracy, everyone involved is probably lying, definitely suspicious, and maybe a criminal mastermind, and yet then they'll they throw up their hands in the air and say "welp there's no way to ever find this out, guess we'll never know!" about a bunch of shit that I'm just like....you could just look that up, you know. (Yes, I could look these things up myself, but I'm trying to be better about "not doing work for free". If somebody wants to pay me to untangle this title and tell you what actually went on, I'd be happy to...for $60/hr, plus expenses in the unlikely event I ended up needing to actually go to NYC. Mostly it's all online though.)

I can tell you, though, that 90% of what this guy's breathlessly reporting as shady and nefarious is actually just overworked, underpaid office drones being lazy and/or bad at their jobs. A big chunk of what he's reporting on is not only not nefarious but the kind of dumbassery that is actually incredibly common (forgetting to fill in a date on a mortgage, for example, is super-common and not at all hard to fix). Most of the remaining semi-shady-shit is just some of those same people trying to cover up how bad at their jobs they are (and mostly doing it badly, because...well....they're bad at their jobs). Barrington Adrian is definitely shady (and probably an alias of "Eddie" or a sketchy friend of his, if I had to guess) and probably guilty of fraud. "Barrington Ebanks" got a good laugh out of me, though.
posted by mstokes650 at 6:21 PM on August 21, 2018 [12 favorites]

The thing that's genuinely sketchy to me is the $20K sale. At that point, there were liens totalling almost $1m on the house. I'm assuming that Barrington to the Infinite Power owned AOTA LLC as well, and he could certainly choose to sell the property at a below-market value to his LLC, but I do not know how you sell a house without satisfying the prior liens. That's what liens are for.

Also, the author ought to sue his lawyer friend for dragging him to the courthouse when Kings County Supreme Court records are online. I found the foreclosure proceeding against Barrington Adrian in two seconds.
posted by praemunire at 7:17 PM on August 21, 2018 [1 favorite]

Ah, this explains a lot:

https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=QH7E8ChovFd6fb5a/jbasg==

Barrington owed money to a company called MNP. MNP got a judgment for it, for more than $200K. Selling the property for below FMV would have been (allegedly) a fraudulent conveyance to protect the asset. Nothing to do with a cloud on the title.

Then MNP's case was dropped. AOTA transferred the deed back to Barrington for a nominal $10. On the same day (April 20, 2016), the 7th Street LLC bought it, with a mortgage recorded in favor of Funding NY LLC. The proceeds of that mortgage were probably what paid off the DB Trust, et voila. The Trust must've been in a coma not to protect its lien in the first place, but they did drop their 2015 foreclosure action in August 2017 on the grounds that the loan had been satisfied, and they did eventually record a satisfaction of mortgage on the property. I think perhaps the author was a bit confused by the fact that the date a satisfaction of mortgage is recorded is not necessarily the date upon which the payoff of debt occurs.

So, that's probably roughly what happened, as far as one can find out in about one and a quarter hours. I judge the lawyer friend severely. But everyone was right that the papers might give rise to the inference that Barrington is a questionable character. Looks like he might have made about $200K on the property, minus some meaningful legal fees.
posted by praemunire at 8:11 PM on August 21, 2018 [4 favorites]

I do not know how you sell a house without satisfying the prior liens. That's what liens are for.

There's nothing to legally prevent you from selling a property with prior liens on it (there are exceptions, chiefly when a court is involved, but ordinary mortgages are not one of those). It's just that the liens follow the property, so under normal circumstances, the buyer would be a damn fool to buy a house with a huge pile of outstanding liens on it, at least without some significant assurances that those liens would be paid off at the closing, or a else very steep discount on the purchase price in exchange for willingness to assume responsibility for those lien obligations. (Theoretically, the AOTA LLC purchase could be like that, but there should be language to that effect on the deed itself, and while I haven't looked I'd bet there isn't.) I suspect, as you do, that AOTA LLC is a Barrington-owned entity, and I'm also pretty sure Barrington just isn't at all concerned about flagrantly committing fraud. In the wake of the crash, there were a lot of banks that were in comas about protecting their interests; frankly most of the banks just weren't equipped to handle the enormous inventory of housing that would've gotten dumped on them and quite a few of them were willing to take a bath, financially, just to not have to deal with all the headaches of suddenly owning all this property. (Like I said: a lot of people are lazy and/or bad at their jobs.) A lot of foreclosure vultures made out like bandits as a result of these banks' sudden lack of interest.
posted by mstokes650 at 8:57 PM on August 21, 2018

There are monitoring services that will pick up on (recorded) sales of property, though. I think it's pretty routine for mortgage trusts to engage a company that provides such a service, amongst others. This property was not bank-owned, it was trust-owned, so the dynamic's a bit different. But still plenty of incompetence to go around, I suppose.

(A lender's not going to lend on a property without the senior lien being arranged to be satisfied at the time of sale, so I guess it's not surprising that when an at least semi-third-party lender got involved, that's when the trust got paid off.)
posted by praemunire at 9:40 PM on August 21, 2018