Committee Hearing, May 21, 2008

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LAW AND GOVERNMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, May 21, 2008 10:00 a.m. - - - PRESENT: COUNCILMAN WILLIAM GREENLEE, CHAIR COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BILL GREEN COUNCILMAN CURTIS JONES, JR. COUNCILMAN JACK KELLY COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER BILL 080424 - An ordinance amending Title 2 of The Philadelphia Code, entitled "City-County Consolidation," by adding a new Chapter 16 providing that prior to the recording of any deed, a check of record ownership be conducted by the Department of Records... RESOLUTION 080176 - Resolution authorizing City Council's Committee on Law and Government to hold public hearings to investigate current policies and procedures relating to real estate transfers... - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2

Good morning, everybody. Thank you for being here so promptly. This is the Committee on Law and Government. I would ask Mr. Boyle, the Clerk of the Committee, to please read the bill and resolution.

Ordinance 080424, on ordinance amending Title 2 of The Philadelphia Code, entitled "City-County Consolidation," by adding a new Chapter 13 providing that prior to the recording of any deed, a check of record ownership be conducted by the Department of Records, appropriate documentation be submitted to the Department with certain deeds and requirements for the delivery of deeds to the Department of Records be met; providing for notification to the record owner of the recording of any deed; providing for exemptions and making certain technical changes, all under certain terms and conditions. Resolution 080176, resolution 3 5/21/08 - LAW & GOV'T - BILL 080424 authorizing City Council's Committee on Law and Government to hold public hearings to investigate current policies and procedures relating to real estate transfers and the problem of fraudulent real estate transfers and creating a Task Force on Fraudulent Real Estate Transfers.

Thank you. For the record, we have a quorum here consisting of myself and Councilman Kenney, the Vice-Chair of the Committee, Councilman Goode and Councilman Green. And before we get started with witnesses, I just want to make a brief statement. First of all, Councilwoman Miller, who is the author of the resolution, will be here shortly. She had an issue in her district that she's tending to and she will be here, because it's certainly something that she's worked on a long time. 4 5/21/08 - LAW & GOV'T - BILL 080424 It's been estimated by many people who are involved in this situation over years that sometimes there's as many as over 100 properties that are somehow stolen or deeds fraudulently filed per month. When this issue was first raised -- and, again, Councilwoman Miller has been working on it longer than me -- I had no idea, nor do most others, that it was this serious and this extensive. Now, the reason we're here today for this hearing is actually twofold. Councilwoman Miller's resolution looks at the entire problem and what can be done by city, state and other entities. And there have been a lot of things done already, but there certainly seems to be more things that need to be done. The bill, which I sponsor, makes what we believe is at least some impact on cutting down on these problems and cutting them off before they fester and become more of a problem and take 5 5/21/08 - LAW & GOV'T - BILL 080424 more time for sometimes two victims in the case of fraudulent transfers. And my goal laws, it would not totally eliminate the problem and, sure, the more invented property thief might find ways around it and some innocent people may be inconvenienced. However, based on real people's examples -- and you'll hear a few of them today -- that my office has dealt with, I firmly believe these measures will be positive steps forward. Now, let be clear. There's definitely been action taken by Records Commissioner Decker, the committee under President Judge Jones and many others to deal with this issue, and they should be thanked and recognized. And the purpose of this hearing is not to put blame on any person, department or agency. However, what I think is also very clear is when you hear some of these problems -- and just a couple quick ones. When a soldier is fighting in Iraq, comes home on leave and has to spend all his 6 5/21/08 - LAW & GOV'T - BILL 080424 leave trying to get his house back that was stolen, something is wrong. When a woman had to leave the City because of a domestic violence problem only to come back and have to fight to get her house back, there is a problem. And we have examples of many second innocent victims. When a couple buys a house and finds out that they really bought it from a thief and they're in a fight with the original owner, there's a problem, and it's a problem I think government has a responsibility to try to respond to the best way possible. So that being said, any statements by members of the Committee? (No response.)

Thank you. I'm going to do the witnesses a little bit different. I think it's appropriate that we first hear from some of the victims just to set the base of what we're doing here. So I'm going to 7 5/21/08 - LAW & GOV'T - BILL 080424 ask -- I know Doris Lynch, Mr. Dupont, Ms. Cohen are here. Is Zelda Cannady here yet? (No response.)

So if Ms. Lynch, Mr. Dupont and Ms. Cohen could just come up to the witness table, please. (Witnesses approached witness table.)

And I would just ask all witnesses as much as possible, particularly if you have written statements, they will be put into the record, and if you could just kind of paraphrase your statements, that would be good, so we can keep the process moving and we don't have people sitting here too long waiting to testify. I know you folks don't have copies of your testimony, but that's okay. Ms. Lynch, maybe you want to go first. You can just pull that -- 8 5/21/08 - LAW & GOV'T - BILL 080424 Ms. Lynch is actually our star constituent. We've been dealing with her for a long time on these issues. Ms. Lynch, maybe you can just pull the microphone as close as you can to you, identify yourself for the record, give your name and address, and then just give us a little bit of the background of your problem. Thank you.

Hi. My name is Doris Lynch. I live at 2625 East Birch Street in Philadelphia, Pennsylvania and, as stated, I was the one who had to leave the City due to a domestic situation, and when I arrived back, my house was no 17 longer in my name. It was stolen one month prior to my coming back to the City. Of course, I was devastated and called around and tried to find any advice that I possibly could, and I was told that I was a victim of de-forgery here in Philadelphia. I reached out and was coming 9 5/21/08 - LAW & GOV'T - BILL 080424 back and forth down to City Hall over and over and over and over again. I can't tell you. It was monthly, then it was weekly, and then I was fortunate to get help from Mr. William Greenlee's office as well as Mr. John Taylor's office. Before that, I was not getting anywhere. I was told we'd come down and discuss one thing. We'd be discussing with the judge what kind of work was going to be done on the house. And then I got to court and I was told it's going to be postponed. Do you have the money today? I says, What money? I was told we were going to be discussing the home repairs. And they said, Well, no, it's all about the money. If you don't have the money to pay this, then why did you even come? And that's what I was facing week by week before I got the proper help. I would just go down there and 10 5/21/08 - LAW & GOV'T - BILL 080424 just be devastated, in tears, thinking what is going on here. I was told that when I spoke to Judge Darnell Jones that I was under the impression that it was going to be put in what was called a lis pendens, meaning that it was not going to be possibly sold to anybody else, other than the thief who already sold it, that he was not going to be able to resell it. But that didn't happen. He did resell it, which made it much more difficult, and our lives are still turned upside down due to what happened to us, which my house being stolen. I never in a million years thought my house would be stolen, and people when I tell them, their jaws just drop. But it does happen, and it shouldn't happen. There is someone that's -- it just shouldn't happen. Again, I did get my deed back. I was fortunate for that, but due to the people who had my home, the destruction 11 5/21/08 - LAW & GOV'T - BILL 080424 that was done to it, I'm still not back in my home, which has displaced my son and I. To mention my son, the deed -- I put the deed when I bought the property in trust for my son due to my health condition. And I can't even imagine someone stealing a child's house. That's exactly what happened. They not only stole a house, but they stole it which belonged to a minor.

Ms. Lynch, if I could just ask you for the record, was there ever any documentation of that trust put in when the property was stolen, to the best of your knowledge?

I know I had documentation stating --

But the thief did not.

No. No. 24

He did not provide proof of the trust when it 12 5/21/08 - LAW & GOV'T - BILL 080424 was filed, to the best of your knowledge?

No. No. 4

Thank you.

So that's -- it's shocking that he would get away with that and numerous other properties, to the best of my knowledge, and it just keeps going on and it's not -- I mean, the pain that the people go through is unreal. It's undescribable.

I understand. Thank you.

To not have your home is horrible.

Just one quick question. About how long did it take you once this process started to actually get the deed back in your name?

It was over a year.

Over a year. And about how many times were you in court?

Oh, at least a 13 5/21/08 - LAW & GOV'T - BILL 080424 dozen. At least a dozen.

Thank you.

And I was told that it was only -- in the very beginning I was told it shouldn't take more than two months, and each week I was told this should be it, this should be it, and each week it was just -- every week I would go down there and they would just tell me, I'm sorry, we have to postpone it because of this, I'm sorry we have to postpone it because of this. And I could see everybody asking questions to each other, Well, what do we do, what should we do. Nobody knew how to handle the situation. They told me, Well, this is a new situation. We really don't have the answers to this yet, and we're sorry you're going through this. But that's all I kept hearing was, We're sorry, and I finally did --

Okay.

-- get the deed 14 5/21/08 - LAW & GOV'T - BILL 080424 back, but, as I said, we're still not in our home after all this time. And thank you for letting me speak.

Thank you, Ms. Lynch. First of all, I thought I saw Councilman DiCicco. There he is. For the record, Councilman DiCicco, a member of the Committee, is also here. If it's all right with the Committee, should we hear from the other people and then -- okay. Mr. Dupont, just identify yourself for the record, sir, and then you can go from there. Mr. Dupont, speak into the microphone, please.

I purchased a house from a lady named Leah Sharp and --

Just state your name for the record first, your name and address.

My name is Wilbert Dupont. I live at 422 Mansion Street. 15 5/21/08 - LAW & GOV'T - BILL 080424

Hi. I'm speaking in regard for Mr. Dupont.

Identify yourself for the record.

My name is Michael Ferguson. Mr. Dupont had came to me about two years ago regarding to the matters of his house being stolen. He had purchased a house to a lease to purchase. That purchasing was never registered, but quite often that's done commonly. He had purchased the house and completed purchase. The contract wasn't executed in regards to actually the title being transferred to his name. He had a tenant move into that property. The tenant had found out that the title was never transferred into his name. She had fraudulently conveyed the property in her name by means as her being the grantor of the woman who was actually the registered name of record by establishing that this woman had died. 16 5/21/08 - LAW & GOV'T - BILL 080424 She stated on the deed that she was the sole surviving heir of that woman and then transferred the property to herself, along with the tax certification. We didn't know where she was at. I had located the woman and found that she's alive and well. We had -- I had the deed transferred back to his name, but we were never able to register it. I had filed a quiet title, because this has been an arduous process. What she did, she had the Indenture notarized by a City of Philadelphia employee from the Register of Wills Department. That validated the deed automatically. People will believe it. She was able to record it. She even stated in the Indenture that Ms. -- the woman's name is Ms. Leah Sharp -- had departed from this life in 1999.

Did she put any documentation in to that effect?

She didn't even bring a death certificate. No death 17 5/21/08 - LAW & GOV'T - BILL 080424 certificate. No documentation was produced, not even an application as for the administrator of that estate was filed. And, by the way, the notary public works in the Register of Wills Department. So after that had occurred, we had gone down -- we filed the quiet title. I had to do a lot of research on this process. The judge told us that we had to get attorneys. Well, the woman who stole the property applied for the VIP program. He had went to the Legal Aid Society. By the way, speaking of the war, he is a Korean War veteran. We had gone down there and filed the process regarding to being his financial concerns that he was able to get or should have been able to get legal representation through the VIP program. Well, the woman who stole the property filed first. He got a letter back stating that there was a conflict of interest and the VIP program could not 18 5/21/08 - LAW & GOV'T - BILL 080424 represent him. And here's a woman who stole the property was about to get legal representation at the taxpayers' expense. So I had gone up to the Mayor's Action and talked to Mr. Haver, and that didn't happen. I had to go see Mayor John Street at that time, and then they sent us back down there, and then finally we had some action at that point. And I thank God for Councilwoman Jannie Blackwell and also Councilman Greenlee as well, as well as Councilman Curtis Jones, because we finally started to get some action. This has been going on for two years. This woman has taken out four loans against this property, one amounting to 49,000, one amounting to 65,500, one amounting to 75,500, and even after the lis pendens was filed, just this past year of 11/13/2007, she's taken out another loan for 89,650 from Countrywide. There are multiple mortgages against this property. 19 5/21/08 - LAW & GOV'T - BILL 080424 This has been one of the most arduous processes that I have ever seen. We're going back and forth, back and forth. They had just gone to arbitration just this past Friday. God willing, there will be a trial date established. The deed has been recorded. However, to protect his interest -- because we don't know the stability of the person that's living in this house. We don't want any harm coming to the property. And he actually lives right across the street and has been threatened. We had the police involved. There's a complaint involved. Detective DiLacqua from the Major Crimes Unit has been with us through the whole process, had the woman arrested. Charges were dropped because people were not prepared to go to trial. So he's worrying about his safety, as well as the property. I'm inquiring now about getting what they call the home equity insurance or what they call the hazardous 20 5/21/08 - LAW & GOV'T - BILL 080424 insurance. Well, with all these mortgages pending, no one is going to insure this property right now. We're being swung back and forth, back and forth as a result. There isn't any safeguards for the deed of Recordation Department, because certain things could have been filed if a death certificate was produced when the notary public is acting as the closing agent on that contract. No one even established to call to find out. I went around playing Columbo. I'm just playing dumb to ask questions why such a thing would happen. I was told by a supervisor of the deed of Recordation Department that the operative issue was the grantor was the sole surviving, and as a result of that, just that phrase of "sole surviving," that they believe that this property would not be contested. Whether there was an estate or intestate, it didn't make a difference to them, and it was just that 21 5/21/08 - LAW & GOV'T - BILL 080424 easy.

And just to be clear, if there had been a requirement for the death certificate, this very well could -- when it was filed, right?

Yes. Even though there's other ways of getting around that process, which I had investigated, by the way, but at least it would have been a red flag and some safeguard measure to establish stating that Ms. Sharp is not dead. I even went there down to Register of Wills. They went on the system and I have a letter, document, stating that based on the record from 1980 to the present, that there wasn't any will that was probated, nor was the person death unknown. That had been a simple measure to establish that, wait a minute, we have to go further into this to find out if there is a death certificate.

Okay. I 22 5/21/08 - LAW & GOV'T - BILL 080424 understand. Thank you, sir. Just for the record, so everybody knows, I know the gentleman mentioned about notaries, and obviously we can't control notaries. That's a state issue, but I know Representative Taylor has been involved, as Ms. Lynch said, and also Representative Jewell Williams is -- I don't know if he's actually introduced the bill, but has a bill to put more safeguards, including a thumbprint when a notary is done. So hopefully that will help some of these problems, too, but I think you gave an example of a couple issues that could have been done that could have -- he wouldn't have to go through all this.

And the mortgage company as well.

Well, that's another issue, too.

That's a whole other aspect, but the fact is is that 23 5/21/08 - LAW & GOV'T - BILL 080424 this is -- it makes the process of getting this house conveyed back to him and removing all the other interest on that property away, and even if someone -- we're not dealing with a stable human being in this property.

I understand.

And so there's a lot of things here at stake and we're just -- every time we come to something, another minefield comes, another minefield, and this has been a domino effect.

Got you. Okay. Thank you, sir. I know people might have questions, but, Ms. Cohen, why don't you identify yourself for the record, name and address, and proceed.

My name is Syma Cohen. I live at 1435 Levick Street in Philadelphia. In August of 2003, I started a 24 5/21/08 - LAW & GOV'T - BILL 080424 process to use my property as collateral for a transaction. About the second week in September I was told that there was a $40,000 lien against my property. When I spoke to the girl at the title search company, she informed me that my neighbor, who has the same address as I do, except her last two digits are 53, mine are 35, had taken out a $40,000 loan with Citizens Bank, and it was recorded because they had transposed the last two digits against my property. I called Citizens Bank. I was told they do not make mistakes. I spoke to people in City Hall. I spoke to everyone, and, finally, I called Citizens Bank and got the number for the Fraud Department. At the same time, my son, because this woman's daughter is an attorney, who is not listed in the phone book, he went into the Legal Directory and got her phone number and left a message for her to call me. 25 5/21/08 - LAW & GOV'T - BILL 080424 I spoke to the Fraud Department first and I told them that Citizens Bank had perpetrated a fraud against me, and I explained what was going on. I was well into six and a half weeks. I was completely and totally disgusted. And I said to the person that I spoke to, if this were not satisfied by the close of business that Thursday, that I was going to file in federal court action against Citizens Bank.

Ma'am, let me just interrupt you for one second. I know this is a mortgage and not a deed, but when this was filed through Records, it was the wrong address. There was no 18 check to see that this person was not the owner of the property, correct?

Nothing. Nothing.

Okay. Thank you.

And he said, That doesn't give me much time, and I said, I've been going back and forth with your 5/21/08 - LAW & GOV'T - BILL 080424 bank for much too long. The woman's daughter called the bank, told them they had made a mistake. By the close of business on Thursday, my son was faxed a satisfaction, and they had -- they stated that it would be lifted immediately. People should not have to threaten, nor should people not be notified when there is a problem. If somebody takes out a loan to put against their own property, the bank does it wrong by the transposition, you have to fight a bank so that they will admit they've made a mistake. After it was lifted and my transaction was complete, I received two letters from the City telling me that this transaction had been placed against my property. It was from the Secretary of Housing and Urban, the Department of Records. These letters should be going out prior to them recording anything. It 27 5/21/08 - LAW & GOV'T - BILL 080424 took me two months, and I was more fortunate than most, because I know that after X amount of time, you make a solid threat, they're going to respond. And I would absolutely have sued them in federal court.

I believe that, ma'am. You look determined.

Yes, I was. And --

I understand.

I was fortunate because I was home. Had I not been home and able to be on the phone, I would have never completed this.

I understand. But I guess the key for the purpose of this hearing is -- and I understand that this is a mortgage transaction, but there was no check originally that that person was not the owner of your property.

No. And the irony of it is her home was up for sale and she 28 5/21/08 - LAW & GOV'T - BILL 080424 sold it before this was done. She had not gone to settlement or they would have been out $40,000.

Okay. Thank you, Ms. Cohen. Thank you for your testimony.

Thank you.

Ms. Cannady, why don't you -- maybe, Ms. Cohen, you could switch seats with Ms. Cannady.

Absolutely.

Thank you very much, all of you, for your testimony.

Thank you.

Ms. Cannady, if you could just identify your name and address for the record and proceed. If you could just give a brief synopsis of what your problem has been, I'd appreciate it, and then we have a lot of time for questions if anybody has any questions for anybody. 29 5/21/08 - LAW & GOV'T - BILL 080424

Good morning. My name is Zelda Cannady. I live at 1810 Bainbridge Street. I'm here because of May 2006 I got a copy of my mother's deed in the record room and found out that the name was altered. My sister went and applied her name onto this deed. I went through the papers of the deed and found out that there was no notary. I questioned how was this paper filed, because that makes it a legal document, and they sent me to Room 154, where they gave me a form to fill out for a complaint. I filled it out, sent it in, didn't hear from anyone, so I kept calling and calling and calling. I spoke with Ms. Joan Decker, who assured me that the document was not supposed to have been filed and that it was nothing that she could do about it and that I had to retain a lawyer. So I went to seek legal help. Every lawyer I found, $5,000 was a 30 5/21/08 - LAW & GOV'T - BILL 080424 retainer or $200 an hour. I have a part-time job. I'm not able to pay for that. So I started going through legal aid, which one person, Ms. Seldin, sent me a letter explaining to me that my sister didn't have full control of the property, it was 50, because I was able to file my mother's estate. I tried to do that. I wasn't able to because they said that me and my sister would have to come to the Wills of Registry office with a lawyer to file. So within the three years, I've been trying to find someone to help me with this, because my mother did not give my sister authorization to apply her name to this deed. She's been trying to evict me from the home. I've been there for 37 years. And I had gotten Mr. William Wysonick's name, and he told me to come in to tell my story. I'm trying to find out whether or not this is acceptable from City Hall, that someone just can come in and apply 31 5/21/08 - LAW & GOV'T - BILL 080424 their names.

Well, it shouldn't be, I guess is the short answer to your question. Just let me be clear, if I could. How was this deed transferred into this other -- I wasn't real clear.

My sister, after speaking to her briefly, she told me that she -- I have a copy. It went to a lawyer, and my mother supposedly had signed it over to her, but my mother passed away. She did not have a will and she did not want to do a living will, because she was sick. So my sister said that she gave her the home. There's no 18 documentation and I have never received anything from the City saying that the deed was altered.

It was under your mother's name and how did your sister get it in her name?

My sister applied her name to it. It's in my mother and my 32 5/21/08 - LAW & GOV'T - BILL 080424 sister's name.

She added it, in other words?

She added it.

Okay. And this problem is still going on, right?

Yes, because I refuse to move until someone tells me whether she owns this property or not.

I understand.

And no one has been able to tell me this.

Well, I think between Councilwoman Miller's office and ours, maybe we can help resolve this.

Okay.

So I know you're dealing with Councilwoman Miller's office, but if we can help too, we certainly will.

Okay. 33 5/21/08 - LAW & GOV'T - BILL 080424

Thank you for your testimony. Are there any questions by members of the Committee? Any comments? The Chair recognizes Councilman Goode.

Just a few questions out of personal interest. Mr. Ferguson?

Yes, sir.

You're representing Mr. Dupont. Can you tell me if you know or if Mr. Dupont can tell us how he came about finding that tenant.

I'm sorry?

How he came about finding that tenant.

Well, we're Muslims and we go to the same Musella, and the woman that came to move into the house at the time was a practicing Muslim and she had several children, and she came with a story that she was in dire need of housing and her father or family 34 5/21/08 - LAW & GOV'T - BILL 080424 member was suffering from an addiction, and out of compassion, he had allowed her to move into the house with the conditions of circumstances regarding --

So she approached Mr. Dupont?

Yes. Yes.

Out of familiarity through --

Yes.

Do you know if she has done this in the past in terms of other properties?

Well, going through -- and I have done thorough investigation, and I had a close rapport with the Police Department. They had did a criminal background check and didn't find any information regarding, but one thing is that she's always been one step ahead regarding to the matters of prolonging the circumstances, from legal representation to the minefields, of even how to get around getting another 35 5/21/08 - LAW & GOV'T - BILL 080424 financing on the property. So either she's being informed from some outside entity or she has prior experience with this. Either way, something is always telling me inherently that she's receiving or had done this before in regarding how to continue this process, because this has been going on over two years.

Okay. Thank you. Ms. Cannady, you said that you discovered that your mother's property was taken by your sister from reviewing the deed. What caused you to review the deed?

Because she kept harassing me and my daughter. I have two daughters and three grandchildren who lived in the home at that time, and when I would go to work, she would come and harass them, and then she would leave messages saying that she will have the Sheriff Department come and evict us. 36 5/21/08 - LAW & GOV'T - BILL 080424

So she did tell you that she owned the house or had taken --

No. She didn't say that per se. She just said that, Y'all have to leave. And then me and my other sister said, Well, we're going to go check the deed, and that's when we went to go check, and her name was on it.

What would give her the right to tell her to leave if she hadn't changed the deed?

Because she said that my mother had informed her to clear up all her untied business and that she said that she could sell the property once she passed. But she never said that, you know -- there was no document saying that my mother gave her sole ownership of the property, because there's seven of us.

Okay. Thank you.

Thank 37 5/21/08 - LAW & GOV'T - BILL 080424 you. Any other questions or comments? (No response.)

If the record could also reflect Councilman Kelly is present, also a member of the Committee. I know we have a lot of other people to testify, but I really appreciate you coming down here. I know some of you are on the road to recovery, some are not, but I think what we were just trying to show that there are real faces, real problems. Maybe this bill that we're talking about or maybe there's other things that still would not make it perfect to solve all your problems, but as I said in the opening statement, I believe that at least some of these could be solved by some proactive action early, before you get into all this stuff, and that's really the goal of this bill. So 38 5/21/08 - LAW & GOV'T - BILL 080424 thank you all very much for coming down.

Thank you.

If I could ask for Panel 2. I know, Mr. Massaro, you have to get out of here, but I was going to ask Judge Jones, Stephanie Fleischer Seldin -- I hope I'm pronouncing that right -- to come forward, please. And is Lisa Caulfield from the District Attorney here? I'm sorry. I didn't see you back there. If you could come up, too. And then, Mr. Massaro, you'll be after this group. (Witnesses approached witness table.)

Good morning, everyone. Thank you for coming. Judge Jones, you have precedence here. If you would like to start. Identify yourself for the record, please, and proceed. JUDGE JONES: Thank you. First of all, good morning. 39 5/21/08 - LAW & GOV'T - BILL 080424

Good morning. JUDGE JONES: I am C. Darnell Jones, President Judge of the Court of Common Pleas. I want to begin by commending Council and this Committee for taking this most progressive step toward addressing a major problem within the City of Philadelphia, and I would add that it is also, quite frankly, a national problem. I also want to take the opportunity to recognize at least two other entities that did a lot in this regard, one of them being Ms. Williams from Fox 29 and also Jill Porter in writing about these issues, bringing this to the forefront. This issue of fraudulent conveyance of real property has been addressed by the First Judicial District in a limited manner, and that's because we are, as the court system, restricted 40 5/21/08 - LAW & GOV'T - BILL 080424 in what we can do about the problem. First and foremost, I had a case myself that was filed in equity, a matter to quiet title, a couple of years ago when I sat in the Commerce Case Management Program, the business court. We took equity cases at that time. One of the cases that I had involved a man who had purchased a home, at least so he thought, and rehabbed it, put a substantial amount of money into that property, then decided to rent it out. A young man drove by the property and noticed that the property had been rehabilitated, contacted his grandmother, who owned the property, and she had no 18 knowledge about it. After they confronted the man who purportedly bought the property, the man who bought the property filed an action to quiet title. The matter ended up here in Court of Common Pleas. It took almost a year for me to work through the mire as the judge in 41 5/21/08 - LAW & GOV'T - BILL 080424 that case to get that title straightened out, because unbeknownst to anyone, the lady who actually owned the property inherited it by reason of her parents dying intestate, without a will. She had two siblings. One lived in Atlanta, Georgia; one lived in upstate New Jersey. In order for the property to be transferred properly, they had to sign off on this deed to transfer the property to this man who thought he owned it. Keep in mind, however, the purchaser was the one who brought the action, causing the elderly lady who owned it to have to come to court. She had no funds to hire an attorney. I had conferences at 6 o'clock in the evening, 7 o'clock in the evening to try to work through this to make sure that everyone was going to be fairly treated, and ultimately this matter was resolved, but ironically, it was resolved because the attorney for the man who brought the petition to quiet title 42 5/21/08 - LAW & GOV'T - BILL 080424 worked for the lady who actually owned the property and also went and sent notices to Atlanta and sent the notices to upstate Jersey for them to sign off on to transfer the title back to the lady who is the rightful owner. Ultimately, there was a settlement. The gentleman who bought the property had put so much money into the property paid the lady who actually owned the house a portion of the monies. All ended well in that regard, but the attorney, as we have right now with people who volunteer their time to help out, did a yeoman's job there, but that cannot be the solution to the problem. Ms. Porter wrote an article 19 about it, and I read that article and thought about the case that I had and spoke with some other people and decided that there's something that we had to do about it, so, therefore, I created the Fraudulent Transfer Property Program, with the goal of doing three things: 43 5/21/08 - LAW & GOV'T - BILL 080424 One, to give the cases specialized attention; two, to provide counsel when we could do so by asking the private Bar to volunteer their services as pro bono counsel; and, three, to expedite the process, because when I got involved in this, it could take upwards of two years or more to resolve these problems.

Our goal was to expedite the matters to get them down to a time approximately four months to five months for resolution. Now, I heard Ms. Lynch's testimony, and her matter was extraordinarily complicated, because there were other back taxes issues involved. The court system can only be so proactive. I would also add that thanks to Commissioner Joan Decker, who did put into operation the notification of property owners when deeds were registered, and I also agree with Ms. Cohen that I think that probably the better thing to do would be to have these 44 5/21/08 - LAW & GOV'T - BILL 080424 notices sent out before the deed is recorded, but I know that real estate transactions sometimes are expedited. But nevertheless, I had, through Ms. Decker, the opportunity to speak to the Property Records Industry Association last fall in Washington, DC at their conference. It became quite clear that this is a nationwide problem and also that Philadelphia, the First Judicial District, was really at the forefront of doing something proactively about it, because the other jurisdictions around the country have not done so. As a result of that presentation, I have now been asked to come to Phoenix, Arizona to speak to the International Association of Clerks, Recorders, Elections Officials and Treasurers, because likewise their conference recognizes that this is a national epidemic and no governmental body is doing anything about it. So I, therefore, commend this 45 5/21/08 - LAW & GOV'T - BILL 080424 body for taking a very proactive stance in trying to address the problem.

Judge, if I could just add one thing, and I guess this is -- maybe the other two witnesses can address this, too. Would we all agree that it would be great if it didn't get to you guys, if somehow it could be dealt with before it got to the point where it's going to take some time, no 12 matter -- we can debate the time, and I agree that you have done a very good job in cutting down that time in most cases. Everything is different. But if we could somehow have more safeguards in the beginning and it doesn't get to you, that that would be in everybody's interest, correct? JUDGE JONES: Absolutely. And we have a short list of suggestions, and we recognize certainly that the issue of notaries is a major issue in this regard, which we also recognize that you don't control. 46 5/21/08 - LAW & GOV'T - BILL 080424 If I may just give you some statistics. We have approximately in 2007 -- last year we created the program, in April of 2007. Of 110 cases, we've disposed of 62 cases. We have currently 50 active cases. In 2006, there were 122 cases reported, and so far we have new 9 cases in 2008. We disposed of one so 10 far. But these are complex matters, and, 11 again, it is very, very important if we 12 can have counsel represent the rightful 13 owners to the property. 14

Thank 15 you, Judge. 16 Again, maybe if all three would 17 have their testimony, then we could have 18 whatever questions. 19 Ms. Seldin. 20

Hi. Good morning, 21 Chairman and members of the Committee. 22 My name is Stephanie Fleischer Seldin and I am the Managing Attorney at Philadelphia VIP, which provides free legal services to low-income clients by 47 5/21/08 - LAW & GOV'T - BILL 080424 connecting those clients to private attorneys. I first want to thank City Council for your support of VIP through the Office of Housing and Community Development. I would be remiss in mentioning that the funding that you provide us not only allows us to assist hundreds of clients each year with homeownership issues, but also supports the very, very important Tangled Title Fund, which pays the filing fees, taxes and other non-waivable costs for clients, one of which I am going to speak about today, and also to commend President Judge Jones for the Fraudulent Transfer Program, which among one of the things he didn't mention was that it provides clients the opportunity to file a pro se complaint, which one of the victims today testified about. And while we at VIP would really like to be able to provide free legal services to every single client who walks in our door, that's 48 5/21/08 - LAW & GOV'T - BILL 080424 not -- the resources that we have, it's not possible. So to have the ability for our clients to have access to a pro se complaint is really a wonderful step for these clients. And thanks also to Chairman Greenlee for asking me to be here today. So I have written testimony, which I have provided to the Committee. So I'd like to talk about only one of the clients, then you can refer to my testimony.

Thank you.

Helen is the true record owner of a property, but someone named George purported to own the property and fraudulently conveyed title to Javius. Javius then sold the property to VIP client Andrea, but because George never had title to the property to pass to Javius and Javius in turn never had title to pass to Andrea, Andrea does not really have title to that property. So 49 5/21/08 - LAW & GOV'T - BILL 080424 her only hope would be to find the true owner of the property, Helen, and persuade her to give or sell her the property. As the Chairman mentioned, she bought from a thief. Andrea has been living in this home where she lives with her two children for four years. She has significantly improved her home and paid for four years' worth of property taxes. She cannot sell her home. She cannot further improve it without cash in advance, and she cannot transfer it to her children. But worst of all, if Andrea stays there, she faces the prospect that the original owner, Helen, or her heirs could show up and force her out. Councilmember Greenlee's bill 21 would require the Department of Records to verify that the named grantor is the record owner before recording a deed. I believe this could have prevented Andrea's problem. 50 5/21/08 - LAW & GOV'T - BILL 080424 This bill would also codify a significant improvement instituted by Commissioner Joan Decker to address fraudulent deed transfers. It requires the Department to notify the record owner by mail within 30 days of a deed being recorded. This is how many of our clients learn about a fraudulent conveyance. Even though the notice is received after the transfer, the notice can be received before a mortgage is taken out on the property or before it is resold. Both of these circumstances highly complicate the legal case. I do have one major suggestion for improving the bill. Don't frown. It's not a big one. I would request that in addition to requiring the Department of Records to mail the record owner when a deed has been recorded, the bill should also require the Department to mail that notice to the occupant at the address of the home being transferred. Many of our clients and one of the victims here today 51 5/21/08 - LAW & GOV'T - BILL 080424 were not record owners. They have entered into a lease-purchase or a rent-to-own agreement. Their ownership rights are jeopardized, if not eliminated, by a fraudulent conveyance, and they should be notified. I conclude by noting that these cases can be very complicated, as Judge Jones mentioned. They're time consuming for both VIP in-house staff and for the pro bono attorneys who ultimately resolve them. But, more importantly, they're devastating to the clients, as you already heard from today. On behalf of the low-income clients that VIP serves, such as Andrea, thank you again for inviting me to testify today and for your ongoing support of our work. We applaud your initiative and look forward to working with Council.

Thank you, Ms. Seldin. By the way, I wasn't frowning when you made that suggestion. 52 5/21/08 - LAW & GOV'T - BILL 080424 Wait until the Records Department and Law Department comes up here. Then I'll be frowning.

Then you'll be frowning? Okay. Good.

Thank you. Ms. Caulfield.

Good morning, gentlemen. I prepared written testimony. I do have copies for you, if you don't pardon my reading. Good morning, Chairman Greenlee, members of City Council. Thank you for the opportunity to give testimony regarding Councilman Greenlee's proposed amendment to The Philadelphia Code to address the issue of the recording of forged deeds. My name is Lisa Caulfield. I am the Chief of the Economic Crime Unit of the Philadelphia District Attorney's Office. I have been a prosecutor for 13 years and have been prosecuting economic 53 5/21/08 - LAW & GOV'T - BILL 080424 crime for the last five. I am here today on behalf of Lynne Abraham, District Attorney of Philadelphia County, and the Philadelphia DA's Office. DA Abraham and the members of the Economic Crime Unit are well aware of the problems associated with house stealing or fraudulent conveyances. We have learned that these frauds are facilitated in part because of loopholes in the manner in which deeds are recorded and in the Notary Public Law. We applaud Councilman Greenlee on his efforts and believe his proposed amendment to be a good first step toward crafting a plan of action that will prevent these crimes. Unfortunately, we do not believe this amendment in its present form goes far enough to stem the tide of this criminal activity and hope my testimony will serve to highlight issues deserving of attention and inclusion in the ordinance. My testimony today and my office's support of this new ordinance is 54 5/21/08 - LAW & GOV'T - BILL 080424 based on my experience in apprehending and prosecuting individuals who have perpetrated this fraud on the citizens of Philadelphia. " I believe that amending The Philadelphia Code will aid law enforcement not only in gathering evidence of forgeries, but also will serve to deter criminals by demonstrating that they will no longer be able to exploit the present inadequate identification requirements. Victims of fraudulent conveyances are usually persons who own but do not occupy the property in question. Often the property is vacant or unoccupied due to the death of older relatives and remains so for years. Sometimes the property is unoccupied because the owner has been hospitalized or is an elderly person or a surviving spouse who has moved in with relatives or to a care facility. Often several years 55 5/21/08 - LAW & GOV'T - BILL 080424 will have passed and the relatives will have done nothing to secure letters of administration to transfer the property into the rightful names. One of the telltale signs of a target property are years of unpaid real estate taxes and water bills. With this in mind, it is important to note that there are currently over 200,000 citizens in Philadelphia 65 years of age or older. After targeting a property, a forger will go to a notary and pose as the property owner. The forger will then deed the property to a buyer, the grantee, who is often part of the criminal scheme as well. Often the deed will be for a dollar and often the forger will declare that this buyer is a relative to avoid paying Philadelphia's real estate transfer tax. The notary may even be complicit in the scam, in which case no one needs to even pose as the true owner. Anyone can then take this fraudulent deed to City Hall for 56 5/21/08 - LAW & GOV'T - BILL 080424 recording and the crime is complete. The conspirator buyer/grantee will often then flip the property to a second buyer, who may also be an innocent party, in which case there might be yet a second victim. Many of the victims of fraudulent conveyances are unsophisticated in the world of real estate. If and when they discover that someone has fraudulently transferred title to their property, they don't know where to turn. They often cannot afford a lawyer to initiate a civil action to quiet title, which is absolutely necessary to restore proper title to the property. A law enforcement investigator attempts to locate and identify the parties to these illegal transactions.

If no one is living in the property, the investigator is often left with simply names with no further identifiers. Sometimes the names used are fictitious and the address supplied on the required 57 5/21/08 - LAW & GOV'T - BILL 080424 paperwork is simply that of the stolen property. The investigator can find valuable evidence from two sources, the Records Department and the notary, a person who should have dealt directly with the forger. A valuable source of evidence lies within the Records Department here in City Hall. Since the phenomenon of forged deeds first surfaced years ago, several procedures have been implemented by Commissioner Decker. The first of these was the mailing of a notification letter regarding the recent filing. This notification, however, is mailed after the forged deed has been accepted and recorded. The damage has already been done and the crime is complete. Ideally, the notification letter should be sent out in advance of the actual recording with a corresponding waiting period. This, however, is sure to bring vast objection by the real estate community. Another issue with the letter is that 58 5/21/08 - LAW & GOV'T - BILL 080424 often it is sent only to the address of the stolen house itself, never to be seen by the true owners. Fraudulent conveyancing seems to have become a cottage industry in Philadelphia. As such, in addition to the notification letter, Commissioner Decker has attempted to add other safeguards to the recording process. Unfortunately, these procedures are not mandatory, and even if they were, they remain lacking in certain requirements essential to detection, identification and deterrence. Anyone can come to City Hall and record a deed. They need not have any relationship to the parties involved in the transfer. As a result, the forger often never appears in person. Forger or not, the filer may be a valuable witness or conspirator that still needs to be positively identified. Photographs are now taken. A sign-in log has been instituted. Copies of the IDs are made and should be kept in 59 5/21/08 - LAW & GOV'T - BILL 080424 the ordinary course of business. However, as I said before, these procedures are not mandatory and still need to go further to be effective. The photographing of all individual walk-in deed filers should take place, with no exception. These same people should be required to produce photo identification verifying the name that they are now linking to that photograph. We've had situations where we have clear photographs of targets who file forged deeds, but we cannot confirm their existence using the names that they used to file the deed. The sign-in log should be completed in full, including most importantly the address of the deed being filed. This sign-in log should be checked against the identification provided. If a filer refuses to comply, then their proffered deed should be rejected. Presently there is no link 60 5/21/08 - LAW & GOV'T - BILL 080424 between photographs of filers and the deeds themself. There is no way to link a forged deed to its filer solely by way of the photograph that may have been taken that day. The document recording number on a deed should be linked to every photo taken to confirm that the individual in the photo was the one who filed that deed. Councilman Greenlee's provision regarding providing supporting paperwork on death, trust, power of attorney, et cetera, is helpful in that properties belonging to deceased individuals are routinely transferred illegally, but there is rarely anything on the face of the deed that is filed to indicate that the legitimate owner is dead. Sometimes you do see surviving spouse, sole surviving heir, but often the forger merely drafts a deed transferring the property from the decedent to a new owner, whether that owner is themselves, a straw person or someone who is duped, 61 5/21/08 - LAW & GOV'T - BILL 080424 and signs the decedent's name.

Similarly, power of attorney documents that are filed with deeds are regularly forged and notarized similarly. Lastly, incomplete transfer tax certifications that are to be attached with the deed when it's filed should result in the rejection of the deed. In the majority of cases, we see grantor, who might be dead, who might be completely unknowing, and the criminal grantee both giving their address as the address of the stolen house, with no 15 forwarding information, no phone number, no way to contact them to confirm the legitimacy of the subject real estate transfer or the lack thereof. I feel it is important to just take a few minutes to discuss the role that notaries have in the crime of fraudulent conveyancing. Ideally, an investigator hopes that the notary who notarized the purported grantor's signature will be able to help identify 62 5/21/08 - LAW & GOV'T - BILL 080424 the forger through their records. You might think that the notarization requirement would protect against scams like this, that their record-keeping would deter this crime. To the contrary, our investigations have found that the registers of notaries are often incomplete and not in compliance with the present Notary Public Law. Even complete records which do comply with the Notary Public Law are inadequate to provide sufficient evidence for investigators to determine the identities of parties involved. Under present statutory requirements promulgated by our State Legislature, notaries are not required to keep any identification materials, such as photocopies of photo ID presented, thumbprints, et cetera, which could provide investigators with evidence of the true identity of these forgers. What this means for law enforcement is that in most investigations, the trail leading to 63 5/21/08 - LAW & GOV'T - BILL 080424 the forger gets cold and ends with the notary, who months or years later cannot specifically recall the identity of the persons involved in the transaction or who has filed to record any meaningful information which would lead us to identify the forger. Legislative changes such as the inclusion of thumbprints in notary registers and the photocopying and maintaining of photo ID presented would help protect people from the theft of their most valuable single possession and would aid law enforcement tremendously. Even if a thumbprint didn't lead directly to ID due to the absence of a criminal record and even if the information supplied in the ID document turned out to be false, the photograph itself will still be one of either the forger or presumably a conspirator. I know these proposed requirements will be considered burdensome by notaries despite the 64 5/21/08 - LAW & GOV'T - BILL 080424 technological advancements in their business. As such, I would suggest that any new requirements be limited to instruments involving transactions in real property. I thank you for listening to my testimony. I will be happy to answer any questions and look forward to working with you on this important legislation. I firmly believe that changes to enable immediate detection and identification, if implemented and monitored, will deter criminals from engaging in this rampant crime.

Thank you, Ms. Caulfield. Thank you, everyone. First a comment, Ms. Caulfield. I agree that our bill here maybe doesn't address everything, but would you -- we believe talking to a lot of people that have been involved in this that it will address at least a portion. Now, we can debate what portion that is. So, I mean, 65 5/21/08 - LAW & GOV'T - BILL 080424 do you see anything in there that would be wrong to have in?

No. I don't see anything that would be hurtful or not move things along.

Okay. And, again, I repeat what I said in the beginning. I think anything that we can do so it doesn't have to get to you folks is probably in the best interest of everybody, and I think that's what we're trying to do in the bill. Any amendments, I'm certainly open to discussing with you or anybody in the District Attorney's Office anything that you think could be helpful. We can sit down with the Records Department. I mean, we'll see how this goes. It would be my hope that we can move this bill 21 today, but that doesn't mean it can't be further amended.

Thank you.

Just one question, Ms. Caulfield, because this has 66 5/21/08 - LAW & GOV'T - BILL 080424 come up in some of our discussions. How does the District Attorney determine who to prosecute?

Well, the District Attorney's Office prosecutes anybody who is arrested for this case. I think the issue is, is there a difference in who is doing the investigating, not necessarily the prosecuting. In the majority of cases -- well, not necessarily the majority. In cases where there is a complaint involving one property, a solo property, we generally -- "we," meaning myself and the few of us in the Economic Crime Unit -- would refer that either to the police division where the house is located or to Major Crimes. Mr. Ferguson referred to working with Detective DiLacqua, who works out in Major Crimes' Economic Crime Unit. Our unit, the Economic Crime Unit, gets involved in the investigation aspect when we see that we're looking at 67 5/21/08 - LAW & GOV'T - BILL 080424 a ring of conspirators, multiple houses that are linking to each other, and one of the reasons for that is, we've been told by the Police Department and certain detective divisions that these cases get amazingly complex in a short amount of time, and for that reason, the DA's Office and the Investigations Division would take over the case and use our own detectives, no longer necessarily the Philadelphia Police Department, to work these cases into what ends up being a much bigger situation.

The reason I raise that is in varying looks into this -- and I'm not saying this is a valid criticism. I'm just raising it -- that some people have said that the DA does not prosecute enough cases of these, that they only go after the bigger ones and that that sends sort of the wrong message. Again, I'm not saying that's -- I'm just throwing that out there for your 68 5/21/08 - LAW & GOV'T - BILL 080424 comment.

I think, again, we're just using the wrong verb, for lack of a better thing. We prosecute every case that the police bring to us on forged deeds. They are the ones that do the investigating. They are the ones that do the arrests. We don't turn cases down and say we're not going to prosecute this. It's just in terms of who actually is going to do the more complex investigation. For instance, some of these types of cases, as well as many other economic crimes cases, get taken to a grand jury, and that is something that the DA's Office would handle as opposed to the Police Department.

I understand. Councilman Goode and then Councilman Green. Councilman Goode.

Thank you, 69 5/21/08 - LAW & GOV'T - BILL 080424 Mr. Chair. This question is for the entire panel. I'm interested in knowing how many cases you've been involved in on this matter and how many of those cases are actual professional thieves, so to speak, versus acquaintances of the victim, family members or friends or people who just have some personal knowledge of the victim's property.

You often do see cases involving family members, and they're usually as a result of an ongoing family dispute that has gone on. But in terms of professional criminals, what I would suggest is, these people who engage in this activity don't necessarily start as professional criminals in this regard, but they get very good at it very fast. I think that they see that it's easy to do. Up until this point, there haven't been many sentences handed down that would cause them to be afraid of 70 5/21/08 - LAW & GOV'T - BILL 080424 getting caught. You're starting to see better ways to find out who is doing -- with the advent of PhilaDox becoming a database, that has been extremely helpful, because when people target houses that have lain vacant with ten years of back taxes, usually nobody comes forward and it used to be very hard to try and find these houses, but now with PhilaDox, there's a database where you can go searching for names and the people can't hide as much anymore. You also see buffers being built where you have people start bringing in acquaintances or friends of theirs, not necessarily of the house, and it spreads out.

The question is, what percentage of this is actually done by acquaintances of the victim.

I would say under 50 percent is done by acquaintances of the victim. Normally the only victims is maybe they get brought in as a 71 5/21/08 - LAW & GOV'T - BILL 080424 secondary victim. They buy a house that has already been stolen. I could see that then acquaintance related, but the initial theft I wouldn't say is so much acquaintance related.

And I would say less, actually. I would say it's around percent, and usually it's not 10 acquaintances, frankly. It's usually 11 family members. 12

Judge. 13 JUDGE JONES: I concur. Keep 14 in mind the case that I referred to 15 earlier wherein the gentleman forged the 16 deed -- and I use the term "gentleman" 17 lightly -- that man was in federal 18 custody and was not going to be brought 19 down to court to testify as to how this 20 transaction occurred. The issue was 21 further complicated by the fact that, as 22 has been indicated, there are buffers. 23 But I think in terms of the 24 percentages, we don't know. There's no 25 way that we can track that as the court 72 5/21/08 - LAW & GOV'T - BILL 080424 system, but I will say this, I think that far too few of these cases are prosecuted. And this is not a criticism of the Office of the District Attorney. It's the realization of the complexity in tracking these cases through paperwork, through the transactions as they transpire by the Police Department or a special unit of the Police Department. I think, frankly, that there needs to be an existing unit that specializes both in the Philadelphia Police Department and the Office of the District Attorney to go after this kind of conduct, because if they're brought into the court system for prosecution, they will be heard, but they're not here. And the side that I deal with at this juncture in terms of the fraudulent conveyance, we're talking about the civil program, not the criminal program.

If I may add, sir, just one other thing. If you're talking about an isolated house case, 73 5/21/08 - LAW & GOV'T - BILL 080424 sometimes it is virtually impossible to find out who the parties involved are, because they are simply just a name, and it could be as simple as John Smith, and there's no way of ever finding out who that person is based on what they have to do to file that deed.

So a significant number of these are family members, but not a majority.

I would not say a majority of them.

Last question for the DA's Office. How many convictions have there been on this matter?

Well, I can only speak necessarily from the cases that have come through the unit, and I don't have stats, but I can tell you of some significant ones that have happened over the course of the last five years. We had a case, I would say it was in '07, where there was an individual who was 74 5/21/08 - LAW & GOV'T - BILL 080424 initially involved in the Ricky Williams scam that had hit about seven or eight years ago before I was involved with this. He was a small player in that role and had gotten a sentence. I don't know what it was, but he was on probation at the time. Well, he continued to engage in this behavior, and we looked into it. We broadened the investigation as much as we could until we were up to about five or six houses, and he was eventually forced to plead guilty by virtue of all the evidence that we had against him and he was sentenced by Judge Amanda Cooperman to 11 to 22 years, which was a fantastic verdict and hopefully something that will go out in the community. Often times, again, when you look at the solitary houses, there are acquittals, because when you only have one house --

Ms. Caulfield, my question was how many convictions. 75 5/21/08 - LAW & GOV'T - BILL 080424

I don't have the number for you. I don't.

Do you know of any convictions of family members?

I don't personally know of any conviction after trial of any family members.

Is that because of the lack of cases being brought against family members?

Well, I think it would be because I don't have the numbers of the other cases that go through the office. I only have in my head or at my access the cases that actually go through the unit, the Economic Crime Unit. We do not handle many family member cases.

What percentage would you say of the cases you handle are family members?

Under ten percent.

And that's 76 5/21/08 - LAW & GOV'T - BILL 080424 because you pass them on to the Police Department? Is that your testimony?

We would refer them. If a complaint came in, one isolated house, known doer, no need for extensive investigation, we would refer that to the Police Department.

And so is the expectation that the case would come back to you at some point?

Well, the expectation would be when the police were concluded with doing their work on the case, they would send it to the District Attorney's Charging Unit and it would get prosecuted through the Municipal Court Unit as any arrest by the police does.

How often does that happen?

I would have no 22 numbers for you on that, sir.

Do you know of any cases that have come back after they were sent into the Police 77 5/21/08 - LAW & GOV'T - BILL 080424 Department?

Oh, yes, but I don't know family members versus not family members.

I'm saying do you know of any cases regarding family members that were sent to the Police Department and came back --

Family members, no. 12

-- for prosecution?

I don't.

Thank you.

Thank you, Councilman. Councilman Green.

Thank you. I have a couple questions on the civil side, and, that is, I'm just curious whether or not people who file a quiet title action or something else also file an injunction to get back possession of their property, a temporary and then 78 5/21/08 - LAW & GOV'T - BILL 080424 permanent injunction to get back possession of their property based on the likelihood of success on the merits on the quiet title action. The previous panel, a man testified that someone was living in his house across the street. I don't know the merits of his particular case, so I don't want to talk about that, but in the abstract, it seems to me from the civil side, the different standard of proof that is required than the DA's Office, that someone who demonstrates that they are the person who was the previous owner -- and that's pretty easy to identify -- and that swears that they didn't sell it and the other -- I don't understand why there couldn't be some sort of immediate action that would return possession so that they could protect their property, and I'm just wondering if that's part of what the program is in the courts or if that's part of the relief sought by VIP and 79 5/21/08 - LAW & GOV'T - BILL 080424 others who are bringing these cases. JUDGE JONES: If I might, I think it's a very, very good question. Ironically, that formal relief is rarely requested, and the motivations for that I'm not so certain. But certainly it's an avenue, because as I indicated before, this is an action in equity and they would have a right to ask for that, provided they give the level of proof.

Stephanie.

Yes. Councilman Green, we have not taken that kind of step legally to actually have an injunction filed at the same time as the quiet title complaint, but we can certainly look into that and see whether or not we have clients who have the level of proof that would be required that could go forward with that kind of action at the same time.

And what could that order say? What could you request that that order say? That 80 5/21/08 - LAW & GOV'T - BILL 080424 possession be returned to the person during pendency? I mean --

It seems to me it would be a request for an ejectment at the same time that you're filing a complaint and quiet title, and you would do it both at the same time. Right now our private attorneys are doing it one after the other. So we could look into seeing whether or not the rules would allow us to do it at the same time.

And an injunction perhaps keeping people away from that property so that if they came back, you'd be able to enforce that by calling the police and having them then be in contempt.

Right. Well -- right. A stay-away order, is that what you're thinking of?

Yes. From that property as opposed to --

Right. And presumably the client would be back in 81 5/21/08 - LAW & GOV'T - BILL 080424 the property and wouldn't have access --

Or if they're ever back there, even if they don't reoccupy the property because they can't because it's messed up, that if they're ever there, there would be a court order saying they can't be there and the police could be called and they could be removed whenever they're there.

Right.

Just a couple thoughts that would be a short-term solution to transfer these properties back in the meantime so that there's not additional economic harm during these, what seem to be, very long cases.

Thank you for that suggestion.

You're welcome.

Thank you, Councilman. Any other questions? 82 5/21/08 - LAW & GOV'T - BILL 080424 (No response.)

Thank you all very much. I appreciate your time. And, again, we hope maybe this bill can make your work a little less heavy there. Thank you. JUDGE JONES: Thank you very much.

Thank you. We appreciate that.

Our next witnesses are Thomas Massaro, Steve Arrivello and Janise Williams, whoever is here. (Witnesses approached witness table.)

In the meantime while they're walking up, I'm going to do a little parliamentary thing here, recess the public hearing very briefly, go into a public meeting and recognize Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Mr. Chairman. Thank you for recessing 83 5/21/08 - LAW & GOV'T - BILL 080424 the public hearing. I have Council business outside of City Hall, but I wanted to leave my vote on this bill and any amendments in the affirmative.

Thank you. Any objections? (No response.)

Thank you very much. Thank you, Councilman. That will be noted for the record, Councilman DiCicco voting aye when we go back into public meeting. We're now out of public meeting again back into public hearing. And, Mr. Massaro, again, I know you have to get out of here, so I apologize keeping you so long, but this is pretty complex, as you can see, and I know you have a lot of history here. So please identify yourself for the record and proceed.

Good morning. My name is Thomas Henry Massaro. 84 5/21/08 - LAW & GOV'T - BILL 080424

Proceed with your testimony.

My testimony this morning is offered from three vantages, the vantage of having served as a Housing Director for the Cities of Newark and Philadelphia; the second vantage is having been a real estate developer in the City over 30 properties for affordable housing; and, third, in the capacity of my volunteer work with people and organizations that have suffered from this problem. Listening to the very important testimony offered this morning, I'd like to offer three comments. One, I appreciate the fact that the City Council is looking at this in a comprehensive way. Having served as a victim of this, having my own house stolen, I have deeply appreciated the efforts of Ms. Porter from the Daily News, LuAnn Cahn from Channel 10, Judge Jones, who has not only been helpful and supportive, but he has 85 5/21/08 - LAW & GOV'T - BILL 080424 been incredibly accessible. I have received a call back from the judge on a Sunday night. Myself and other citizens have had access when we want to raise an issue, and that's deeply appreciated. And also Lance Haver, who has been very open and very helpful to the stream of people coming into his office despite the challenge and personal difficulties that he and his family had faced this year. Listening to the testimony, having been a victim and of working with a task force of volunteers to comprehensively address this problem, I think this is where we are. We had a problem that was about the size of a mini compact disk. It is now the size of a wagon wheel with 28 spokes, and the challenge here today is to define the problem and to get each of the 28 spokes in the wheel identified and repaired. And the problem we face now is, the spoke in the wheel that Judge Jones can change, he can change. The several spokes in the 86 5/21/08 - LAW & GOV'T - BILL 080424 wheel that this Council can address, I think you're prepared to address them. And there's a lot of benefits from your bill, Councilman. You should be commended. I know you've had support. Councilwoman Miller's staff has been very helpful. But there's only several spokes in the wheel that you can change. And we still haven't defined the problem. No 11 one knows the extent. No one knows the scope. And so we have to -- the group of volunteers that I've been working with, we're, one, trying to define the problem. Two, we're trying -- in all its comprehensive assets. Whether we're talking revoking the notary license, whether we're talking about something at the Department of Records, something to be done with the Bar Association. We have to define each spoke in that wheel, because if we only repair 14 of them, the wheel will bust and collapse. So the work of this Council, 87 5/21/08 - LAW & GOV'T - BILL 080424 you have to do all you can do and then work on the other spokes in the wheel, and we can only do that if we have a comprehensive effort. We do not have a comprehensive effort. Some of the parties here are working, but not all the parties here are working. Some of us are trying to form a common agenda. Some have a separate agenda. So until we define the spokes in the wheel, have a remediation effort for each spoke in that wheel, even the repairs we make to the wheel will result in a collapse, and that has to be addressed. The resolution would be to once you define the problem, you can first define a problem of deterrence, whether that's revoking the license of the notary, whether that's criminal prosecution of people who have been involved. And, you know, you see patterns if you look at it in the context that I have. Councilman Goode has done 88 5/21/08 - LAW & GOV'T - BILL 080424 marvelous work identifying people involved in predatory lending. This is Chapter 2 for some of those people. The same interests that have perniciously preyed upon people in our communities, this is the next phase for them to prey on people. My house was stolen while I was in a coma in intensive care at the Hospital of the University of Pennsylvania.

And one of the things that my task force has looked at is to identify exactly how people are targeted. The other people that were in intensive care with me did not survive, and some of them had their homes stolen, too. So we came to the conclusion that either someone in that hospital is tipping people off, someone who might work in the accounting office. It could be a nurse. It could be someone who hacks in or taps into the database. It could be someone working at a health insurance company. But there's a very pernicious -- it's a 89 5/21/08 - LAW & GOV'T - BILL 080424 very vile targeting of people. And I think as Judge Jones testified, the commonality is people generally are very sick, they are very poor and they are very old. And even if it was the one case in ten or the one case in five or the one case in where the fraud is 9 detected, they lack the means and the 10 knowledge to identify it, to pursue it 11 and to remediate it. 12 The first thing our task force 13 is going to recommend is that there be a 14 one-stop point for a person who is a 15 victim here. You're going to have dozens 16 of people testify. Again, spokes in the 17 wheel. Where do you go when you find out 18 your house is stolen? Should you go see 19 Lance Haver? Should you knock on Judge 20 Darnell Jones? Do you go to Councilman Greenlee because you read in the paper he's interested or Ms. Miller's staff has been working on it? Where do you go? Where's the first stop? And how many stops do we impose on the citizen who is 90 5/21/08 - LAW & GOV'T - BILL 080424 very sick, very old and very poor? I was an exception and I lived. They didn't count on me doing that. And I guess the first step in my recovery, while I was in a coma, I signed all the papers to transfer the deed and I appeared before the title clerk. I'm the first person to leave HUP's intensive care to go a closing and come back and get right back in a coma. The other extraordinary things that you learned here is the contempt that this industry has for you and the contempt that this industry has for the people of this City. The gentleman in my case who has defrauded the City in numerous instances, he's my brother. Now, there may have been some question that he's my brother. He's a different color. But I've always been a proponent of racial diversity. And the more amazing thing is in one of his incarnations, my brother was born six weeks and two days after I was born, and 91 5/21/08 - LAW & GOV'T - BILL 080424 on Mother's Day I think we should commend my mother for only needing seven weeks to have another child, although he could have been lying or he could have merely been seven months and three weeks premature. So you can take your pick. But it reflects a contempt. When there was a master indictment in my case -- and Ms. Gordon's office has been helpful. Detective Brown has been exceptionally responsive. Ms. Gordon will call you on a Sunday night. My brother, when the judge adjourned and we were out in the hallway, the gentleman in my instance, he has been exempted from the real estate transfer tax in my instance, because he's my brother, even though he's only six -- I'm only six weeks older than him. He's also -- I met the other victims. He's also the brother -- he's African-American, but he's also the brother of Tomas Enrico Massaro. He is the brother of a Russian Orthodox Jew. 92 5/21/08 - LAW & GOV'T - BILL 080424 He is the brother of a Cambodian refugee, an African-American woman from the South and a Jamaican national. So he should either be honored by the International Habitat for Humanity by promoting housing on four different continents simultaneously or maybe he should be in jail by this point. But the fact is -- I mean, I can say it in a humorous way, but that's the contempt that they have, because nothing happens. Nothing happens. The day Ms. Porter wrote a story in the Daily News -- and some people laugh.

Housing chief has house stolen -- this gentleman appeared in Councilwoman Miller's office. His picture was in the paper. I happened to call her office at 9:15 to see -- because she was mentioned in the story, and when I answered, they said, He's here. Now, Councilwoman Miller's staff has known me for 28 years. They know I wasn't him, and they're looking at 93 5/21/08 - LAW & GOV'T - BILL 080424 the paper and he walks in. They asked him his name and he said he's Tommy Massaro and he was looking for public assistance to help develop the property as well. And you can laugh if you want, but it shows the contempt that they have, and there's no fear that they will be held accountable. And that's outrageous, because they know now if you repair this spoke in the wheel, Councilman, they're going to hit the other weak links. So, again, I would say the one thing that my task force -- we haven't completed our work. Mercy Healthcare is trying to help us, because they see it as something where a lot of elderly people are systematically, in a very vile way, the victims here, but until we have a comprehensive effort, if we could take my task force and get the City to be of assistance, until we identify all the spokes in the wheel, until we have a remediation plan to deter it, to enforce it and to remediate it, it will continue. 94 5/21/08 - LAW & GOV'T - BILL 080424 That's what I'm willing to share today.

Thank you, Mr. Massaro. And let me -- I certainly agree with you, and we are under no illusion that this is a be-all and end-all today. Again, as I stated earlier, I'm hoping if the Committee sees fit, we can move the bill today, but the resolution, we're certainly going to keep the record open, we're going to continue it and we're going to have more discussion with this, and you'll certainly be a valuable player in this. We thank you for all your efforts way back when you and I had more hair, back when you were the Housing Director and through this time now. So thank you. Before we go to the other witnesses, I want to recognize that Councilwoman Miller is here. As I said earlier, she's been involved in this for a really long time and it's her resolution, and she's been working hard on trying to deal with the various 95 5/21/08 - LAW & GOV'T - BILL 080424 problems, the various spokes that Mr. Massaro alludes to. And if the Committee sees fit, I'd like to recognize Councilwoman Miller for any statements she'd like to make.

Hi. Thank you. Thank you. Good morning. Good morning, Tom. We didn't know whether it was a contempt for the system or whether he had not read the paper and was just dumb enough to come into our office seeking assistance. And certainly he did not know how familiar we were and are with you. I think I may be wrong, but I think they actually did come back again. I mean, the gentleman that came into the office was supposed to be the brother of -- he was your brother, too, but he was also the brother of the other Tom Massaro, and I think he's someone that was taken advantage of, because he looked like he had a problem with some type of substance abuse. I agree with you that someone 96 5/21/08 - LAW & GOV'T - BILL 080424 in the healthcare or insurance industry must be a part of this, because so many of the people are people that are sick and shut in. And I think this is an important issue that we have to figure out how to use or figure out ways to connect, as you describe, all the spokes so it doesn't happen. People work hard for their homes and properties, and one should not just be able to walk in and in a few months become the owner of something that they acquired illegally. So I want to thank you for coming today. And as Councilman Greenlee said, this is a discussion that's going to have to continue, because we're going to have to figure out how we can correct this problem.

And Council Lady, I also want to remind you that this gentleman threatened me in court two months ago when the judge -- right in the middle of the session, I had to call Ms. Gordon last week. He called and 97 5/21/08 - LAW & GOV'T - BILL 080424 threatened me again, and he's not catching on that not everyone is going to roll over on this. They'll play the game of continuances, hoping that all of us from five continents who he's pilfered our homes are going to stop coming. We're not going to stop coming, because we understand that he's kind of like a textbook example of an octopus and he's done dozens of properties, and each of these tentacles has been cut off, the corrupt notaries, the corrupt title people, whose ever targeting the victims in intensive care. Also people -- there's some that were transferred within one week of the death. So we think people are looking at death notices when you look at when these dates happen that people are triggering off death notices. And so, again, each tentacle of the octopus has to be cut off as well.

I agree. We just can't take one part of it. We have to look at the whole picture. 98 5/21/08 - LAW & GOV'T - BILL 080424

And Chris Drumm should be invited. He's like a Senior Vice-President for Mercy, and Chris sees it from the point of view of the number of elderly people on Medicare who are being -- so Mercy has been very helpful to us to try to help get this information and take a look at that angle as to where that information may be available where it's being polluted actually, the information is being polluted, to commit these invidious acts of theft.

Okay. All right. Thank you. Thank you, Mr. Chair.

Thank you, Councilwoman. Again, we're going to go out of the public hearing just briefly and go into a public meeting, and I recognize Councilman Green.

Yes. Thank you, Mr. Chairman. I have to leave briefly. I may be able to get back for 99 5/21/08 - LAW & GOV'T - BILL 080424 the vote, depending upon when it is, but I would like to be on record for voting for the bill and for any amendments recommended by the Chair. Thank you.

Thank you, Councilman. Thank you very much. That will be for the record that Councilman Green is voting for the bill and amendments when the public meeting occurs. We're back into the public hearing. Sorry to hold you folks. Mr. Arrivello, I got you next. If you'd like to state your name for the record and proceed. And Mr. Massaro, I know you have to leave, so anytime you have to --

I have a few more minutes.

Okay. But, again, thank you very much.

My name is Stephen Arrivello and my address is 1725 Fairmount Avenue. 100 5/21/08 - LAW & GOV'T - BILL 080424

The 15th Ward, I may add.

Say that again.

It's the 15th Ward, where I happen to be the ward leader. I always mention that.

That's right. So thank you for hearing me. I think I'm going to bring a little bit of a different perspective that I've heard. I heard a lot of stories and I know a lot of stories, but my perspective is as an investor. I am actively engaged in finding properties that are broken down, beat up and have taxes due, finding the owners and legally purchasing them, and I've had several situations where I've been in the process of obtaining these properties from the heirs and had them stolen, fraudulently conveyed by thieves. I can give testimony to there are a lot of holes in the system. It's exceedingly easy to steal a property in the City. All you really need is a 101 5/21/08 - LAW & GOV'T - BILL 080424 notary stamp. You need someone to sign and you need a notary stamp. And as I tried to tell people who can't believe me when I tell them I've had my property stolen, all you need to do is get it stamped and recorded and, bang, you've got a property, and now the onus is on the rightful owner to spend the money to engage the attorneys and to get the property back. Mr. Massaro has given me a whole different perspective on it, but the thieves I find are concentrating in a very active area near Temple University and other hot areas where there is investor activity. One of the gentlemen -- and the two properties that I've been involved in have had entities stealing the properties. They've had in the one case it was a CDC, a community development corp, which was behind one of the property's thefts, and another is a company that's stolen seven or eight properties that I've been able to 102 5/21/08 - LAW & GOV'T - BILL 080424 identify in the immediate area. It serves me a lot of problems, and I'm hoping that my attorney would be successful in quieting the title, but it serves a lot of problems in serving notice on the thieves and trying to get the properties back. So that's my testimony. If there are any questions, I'm happy to hear them.

I'm sorry. I was distracted for a minute.

That's okay.

Just one question, and I think you raised in the very beginning of your testimony I thought a very important point. Basically right now to get a deed filed, as long as the paperwork is right and the fee is there, it pretty much goes through, right? Am I pretty much stating that correctly?

It doesn't even really have to be right. 103 5/21/08 - LAW & GOV'T - BILL 080424

Well, when I say "right," on the face, I guess, is the best way to say it.

Yes. But unbeknownst to me, I filed a document -- once I had a deed transferred from the estate that my attorney was opening. I tried -- actually, before the document was filed, I notified the folks in the Records Department. I know them. They're nice people. They're nice people down there. I like talking to them. But I wrote a letter to them and let them know to be on the lookout for a deed that may be showing up. Well, as it turned out, the deed had actually been recorded a few days prior. But subsequent to that, I went down and I filed a lis pendens on a property. Now, any attorney worth their salt, as my attorney has let me know, that I shouldn't have been able to file a lis pendens and the recording document without an action at law. I didn't know that. I filed a lis pendens. 104 5/21/08 - LAW & GOV'T - BILL 080424 So, yes. On the face of it, you would think that if the document looks and smells right, it gets recorded. But the folks that are looking at the documents, as far as I know, they're not attorneys, they're not title insurance companies. There's really no 9 accountability in terms of the content of that document, and that's, in my mind, where the real breakdown is, is that there is no accountability between putting a piece of paper at a window with a fee and the legal transaction that that signifies. I don't know what the answer is and we're all working hard on it, but I don't think it should be the case that anyone that wants to file a document can file it. I think there needs to be a lot of safeguards around that.

And certain documentation accompanying it would help.

An abstract 105 5/21/08 - LAW & GOV'T - BILL 080424 company, sure. A title company, they file documents all the time. Maybe this imposes a financial burden on folks who can't afford it. That's an issue that I don't know how to --

No. I understand.

I understand that.

And the whole issue of title insurance has been brought up and whether it should be mandatory for everybody. But you're right, it does raise some economic issues, so we're not ready to go right there yet, but it's something that has been discussed, to be honest with you. Any other questions? (No response.)

I'm sorry, Ms. Williams. We've kept you for a while.

That's all right. He has another question. 106 5/21/08 - LAW & GOV'T - BILL 080424

Okay. Yes, Mr. Massaro.

No. Go ahead.

Well, whatever.

Good morning. My name is Janise Williams and I'm a real estate agent. On March the 10th, 2008, Mr. Roscoe C. Campbell asked me to sell his property at 2215 Wharton Street. It belonged to his father and stepmother. It had been vacant for well over years 15 or more. On March the 11th, I went to the Records Department to get a clearer copy of the deed. At that time, I was informed that another deed had been recorded just the prior week on March the 6th by one Lanita Williams. The deed was dated December the 2nd, 2007 and it was signed by Roscoe C. Campbell and Margaret Campbell, his wife. Both of these signers have been deceased for over 30 107 5/21/08 - LAW & GOV'T - BILL 080424 years. I asked to speak to the Commissioner of Records. Ms. Linda F. Townsel, the Executive Secretary, came out and talked to me about what you can do when this happens. They would not put a hold on the deed because they said they don't know who I was, so how can they do anything to the deed, because I may be somebody trying to do the same thing that Lanita did. Someone in the Records Department told me to file another deed on top of that. That way it would be in our name again, the name of the original owners. But that's like not too cool. Okay? I went to the DA's Office and I was directed to a Yvonne Ruiz to report the fraudulent deed. However, she and another referral were not available to speak to me. So I left my name, and later that day, Ms. Ruiz called me and stated that they can take the report, but 108 5/21/08 - LAW & GOV'T - BILL 080424 no activity will come from it because they're understaffed and only take on cases that have multiple fraud cases, like 30 properties involved. I also went back to the Records Department to ask about the pictures. I said somebody told me in my going back and forth that the Records Department took pictures. So I went there and I asked them about that. They didn't have any pictures of those persons. They looked in their file and they couldn't find anything. That same day I went to Councilperson Donna Reed Miller. Her office was -- the reason why I went to her office, because I read someplace in the newspaper that she was active in this, and I said, cool, I'm going to go and talk to her. Besides, I know her sister. They listened to my concerns and they referred me to Court President Judge Darnell Jones. He's spearheading 109 5/21/08 - LAW & GOV'T - BILL 080424 this type of fraud, they told me, with the filing of an action to quiet title. His program assures that this type of case will be listed immediately for a hearing. I went to his office, and they referred me to the Prothonotary's Office to speak to Mr. Kevin Daly. On March 12th, I met with Mr. Campbell, the son, who has -- I'm going to just say that -- at the Prothonotary's Office to enter a civil action as a lis pendens against the real property, and this action involved a motion to quiet title for the fraudulent conveyance by forged deed. Mr. Kevin Daly advised that we should remember to file an Affidavit of Service. On March the 26th, Ms. Townsel followed up and called me and sent me an additional letter saying here's some other things and don't forget to report the crime to the police. Verbally she told me she was going to take a copy of the lis pendens and attach it to the 110 5/21/08 - LAW & GOV'T - BILL 080424 deed. I thought that was really cool, because that way if another deed comes in, it would be right there. On April the 23rd, I called the notary that had notarized the deed and asked him how could he do that and if he had any evidence identifying the defendant. He called back after a few days and stated he didn't sign the deed and that his seal had been compromised by someone at the office where his notary seal is. He works at an automobile place where they do note the titles on the cars. On May the 1st, I identified the property addressed other defendant on 2211 Leak Street as a vacant lot.

This was substantiated by the Board of Revision, information that indicated the property was vacant. I took pictures of the lot and posted a sign on the Wharton Street property requesting that Lanita Williams appear in court, scheduled date was May the 14th. 111 5/21/08 - LAW & GOV'T - BILL 080424 On May the 14th, the court date was before Judge Esther Sylvester, and she at this time -- the only thing she wants me to do now is send out a ten-day letter, and the Affidavit of Service was already filed that same day. So I'm here to just let you know what I went through to make this happen.

Thank you. And just a quick question on that. How was the deed originally put in the fraudulent person's name? I mean, was there forgeries on signatures?

In fact, Lanita when she signed her name didn't even -- forgot to put the "I" in when she signed it. One place was spelled wrong. Go ahead.

No. I'm raising it because I've heard this before. That's why I'm saying about -- and I'm not trying to upstage the Commissioner's testimony, but I know that is a concern, and that's why we think 112 5/21/08 - LAW & GOV'T - BILL 080424 matching names and all are very important in this. Because people often times -- some thieves are smart and some are not. Some never learn how to spell or read or whatever well enough and they make mistakes, and if we can pick up those mistakes early...

The recital on the deed was wrong. It didn't even pick up everything. It wasn't even correct as far as the reading. So we were fortunate in the fact that I found it within one week and we were able to file the lis pendens the next day.

And for the record, if some of those things had been detected early and rejected, we wouldn't be talking right now, right, because it would have been turned back?

That's right.

Thank you.

You're welcome.

Mr. 113 5/21/08 - LAW & GOV'T - BILL 080424 Massaro.

Yes. Councilman Green, a couple other points.

I'm Greenlee. I'm the one with less hair.

I'm sorry.

That's all right. We get confused all the time.

Excuse me. Number one, I think something that might be amended to your bill would require the Finance Department to report to Council on their process for reviewing these requests to be exempted from the real estate transfer tax. On the face of it, when one person has family members from four different continents, six different countries, it might call it into question. Number two, one of the problems the District Attorney reports was she can't enforce -- the scope has grown. The people in the DA's Office were very responsive, Ms. Gordon and Detective Stan 114 5/21/08 - LAW & GOV'T - BILL 080424 Brown, but the three times I was asked to come to the District Attorney's Office, in each and every instance the detective sat down with me in a conference room, took out a legal pad, wrote out in long hand the question and wrote out my response long hand. Now, that's primitive, and it really diminished all the enthusiastic, determined work of Ms. Gordon and her staff. It wasted three hours of my time. Literally, he wrote it out "what is your name. My name is," and all three times. They certainly should have laptops for those computers. They should have tape recorders. And so I think we could do better with existing resources if we had the technology that the DA's Office has. And when you review the DA's budget, you should make sure they have the tools that they have, because they're wasting the time of the limited personnel that they have by that. And, again, I don't mean that as a criticism of them. They've been very 115 5/21/08 - LAW & GOV'T - BILL 080424 responsive, but their time is being wasted by working in the stone ages.

Thank you. I note that Councilman Jones is here and I believe he has a question. Councilman Jones.

Yes. Thank you, Mr. Chairman. Ms. Massaro, I had an opportunity to hear this before a number of times from you, but I'm guessing based on when you brought it to my attention to this time and when Donna Reed Miller actually had to chase someone, as I recall, as a result of these types of crimes, one of you or your staff were trying to apprehend them physically yourself.

Right. Well, that is absolutely correct. When the gentleman came to our office and we called and got Tom there, we didn't know at the time there was somebody hiding in 116 5/21/08 - LAW & GOV'T - BILL 080424 the stairwell who was the actual Tom Massaro.

Who wasn't the actual --

Well, the one -- the brother -- well, it was the Tom Massaro that the brother was the brother of, not this --

Or perhaps my mother had triplets.

Not the real Tom Massaro. So he was hiding in the stairwell and suddenly he realized that we were about to confine him, and he started running. And when he started running, I asked my staff -- because Tom and I, this Tom Massaro and I, were standing in the hallway, and I asked my staff to go -- because Tom started running, and I knew he was sick and I didn't want him -- I thought him running through the halls was really going to impact his health and I wanted to make 117 5/21/08 - LAW & GOV'T - BILL 080424 sure that we could slow him down, and I had, what, about three or four male staff, and they all jumped up and ran and chased him. Fortunately, he ran on the second floor. So then the Mayor's security detail got involved in the chase also. So, yes, we had a chase through City Hall.

One of the things that came out of that example was that this was not just happening to you but a lot of other people, and I understand the methodology of the crime is as insidious people going into emergency care wards, critical care wards and taking names of people who are projected not to make it and then in the shadow of their illness, try to defraud them out of their property. Is that correct?

I was literally in a coma the day they stole my property, but that did not prevent me from going to the closings. 118 5/21/08 - LAW & GOV'T - BILL 080424

So he presented himself at the closing. You were in cardiac --

Right, and the notary signed that she knew me personally, she had ID from me and she witnessed my signature at the closing. So I was taken out of intensive care a week later and they said that was the start of my recovery, but apparently that day when I left the coma and the intensive care unit to go to the closing was the actual start of the recovery.

So their methodology is to go to these hospital wards, look at --

One of the reasons that Chris Drumm, who is Senior Vice-President of Mercy, has been helpful is, we haven't been able to prove that yet, but if you look at when the houses were stolen from the people, there's a correlation between being in intensive care and being judged to be terminal. So 119 5/21/08 - LAW & GOV'T - BILL 080424 if you took the grave condition of cardiac intensive care, if you took the list of people that have been given the last rights, if you skew that from being over 70, not being able to survive statistically, you'll see there's an overlap. It's a template. So it could be a nurse. It could be someone in billing in the hospital. It could be someone in the health insurance company that's across the country that could just type in. We don't know, but there's definitely a pattern where there appears to be an overlap.

Thank you, Mr. Chairman.

Thank you, Councilman. Any other questions, comments? (No response.)

Thank you all very much. Thank you for your patience and time. The next panel is going to be 120 5/21/08 - LAW & GOV'T - BILL 080424 Commissioner Decker and Lance Haver and whoever is here from the Law Department. (Witnesses approached witness table.)

Commissioner, do you have copies of your testimony? COMMISSIONER DECKER: You have it.

We have it already? I'm sorry. I know I had it. And if I could just say, because I know you're running late, Commissioner, I know your testimony is lengthy. If there was a way to sort of paraphrase it -- I know you have a lot of concerns about this bill, and I understand that -- just so we can get moving, I'd appreciate that. COMMISSIONER DECKER: Sure. Good morning, Chairman Greenlee and members of the Committee on Law and Government. My name is Joan Decker, Commissioner of Records, and I am here 121 5/21/08 - LAW & GOV'T - BILL 080424 today to testify on Bill 080424, which adds a new chapter to Title 2, "City-County Consolidation," mandating new requirements surrounding the recording of deeds. And I will summarize some of it. There's some I would like to read, if you would bear with me.

Sure. COMMISSIONER DECKER: First, I would like to thank Councilman Greenlee for taking the opportunity to meet with me prior to this legislation. I appreciate that time very much. I understand that this measure is seeking to address the issue of real property fraud, which is a serious problem that affects those individuals who can least afford it, the elderly on fixed incomes and those who do not have title insurance. However, I think that it is important to caution City Council to proceed carefully and to fully understand the likely unintended consequences of the 122 5/21/08 - LAW & GOV'T - BILL 080424 proposed legislation before taking action on this measure. As far as document recording is concerned, to the extent that state law places certain legal duties on the Department and its recording function, the Law Department will provide legal advice with respect to those obligations and Council's ability to legislate in this area. And I think you have distributed before you copies of my testimony, as well as a copy of the letter from the Law Department concerning this matter. The impact of this legislation: My testimony will focus on the requirements set forth in the proposed legislation in the sequence in which they appear in the bill. It will also provide some information about the variety of customers that we service, as well as how documents are presented to the Department. And I'll just quickly mention 123 5/21/08 - LAW & GOV'T - BILL 080424 those. We service -- the bill covers or excludes title companies and deeds presented that are sheriff's deeds. It does not exclude other types of companies, such as small and large law firms, a variety of servicing companies --

If I could just interrupt for a second, Commissioner. I will be putting in or there will be an amendment put in including -- or excluding attorneys and law firms. COMMISSIONER DECKER: Okay. And also individuals. As far as the deed match is concerned, this proposed legislation requires a deed name match for every deed presented for recording, with the exception of those deeds presented by title companies or those that are sheriff's deeds. This would mean that the Department would need to check the grantor name on the deed presented for 124 5/21/08 - LAW & GOV'T - BILL 080424 recording with the grantee on the last deed of record for a particular property in the records maintained by the Department to ensure that they match. Approximately -- I have some figures here, but I want you to bear in mind that they are simply estimates. We have not tracked -- had no need to track some of this information previously, so we're just basing this information on our estimates of what these numbers would be. Approximately 30 percent of the documents or deeds presented for recording each year are not presented by title companies nor are they sheriff's deeds, and this represents approximately 20,000 of the deeds. What we want to make you aware of is that if we perform this name match, very simple, perhaps incomplete names -- in other words, situations like a Joe Smith may not match to a Joseph Smith. Likewise to use a couple other examples, a maiden name may not match to a woman's married name that 125 5/21/08 - LAW & GOV'T - BILL 080424 may appear on the deed, a title or like a junior or senior may appear and may not totally match. So what we would want you to be aware of is that this deed match/name match would probably result in a lot of legitimate owners who are trying to sell their property and find out that these documents, these deeds, would then be rejected. We took a sample of approximately 3,538 deeds, just a small sample from documents that were recorded in the fall, and we found 1,344 false positives, or approximately 38 percent of the deeds presented for recording would not have matched and would, therefore, be rejected. In other words, this would result in additional cost and delay to perform this check and would most likely pass on additional costs and inconvenience some of the other individuals who are attempting to record their documents. Additionally, many criminals, 126 5/21/08 - LAW & GOV'T - BILL 080424 if the intent is to capture criminals, with few exceptions, the criminals generally forge the names on a deed. And for those who don't, it probably will not take very much time for them to learn how this new system is working, because the notices will be posted and then to learn from that and to correct their errors. The legislation also provides for the submission of documentation, and though in certain cases such as in estates, trusts, in articles of corporation, and while we don't expect that documentation will be very lengthy, we do think that it will add some time to the recording process, but, most importantly, that document will be incorporated as part of the recorded instrument, which will then become part of the public record, and that makes it very easy for criminals just to simply copy, replicate and change what they need to change to submit their documents the next time up. So we're not sure that 127 5/21/08 - LAW & GOV'T - BILL 080424 spending your resources in that way will really accomplish what you're trying to accomplish here. And, again, it will extend the turn-around time to process the deed and return it to the rightful owner. There is another requirement on personal delivery, and on that, that would mean -- again, we do receive mail from a variety of customers, including individuals, large and small law firms, as well as a variety of servicing companies who prepare deeds and then submit them for recording. This also would increase foot traffic in the Department.

And I think it was mentioned that we do take some additional measures to capture photographs, capture signatures in a logbook and also to make copies of photo ID. We estimate that -- and I think I'll get to that soon. But anyway, as far as mail is concerned, to my knowledge, there is no other recorder's office in the country that 128 5/21/08 - LAW & GOV'T - BILL 080424 does not accept recordings by mail. Now, how would this process work in the Records Department? Under this bill, first, as I had mentioned, without the ability to accept mail, we would increase the foot traffic into the Department, and we estimate that that foot traffic would increase by about 8,500 individuals a year. That would mean also that we would take the time to take photographs, take the time to capture signatures in a signature logbook and also take the time to ask for photo ID and to maintain a file of that identification. Again, the title companies would be exempted from that, but, again, that would increase our foot traffic. Again, I think I mentioned the documentation would be part of the public record and, therefore, be very easily replicated by perpetrators of crime. As far as the name search would be concerned, the first check would be 129 5/21/08 - LAW & GOV'T - BILL 080424 done for the match by the staff who is actually examining the document. And currently documents back to 1976 appear in an automated system. That is searchable by names and addresses, and the staff at that point could check for that name match. However, there are in many cases these fraudulent deeds, as you've heard this morning, sometimes referred to a property that was recorded many years ago, and for those documents that may have been recorded before 1976, we would have to refer those individuals to another part of the Department where we would conduct a separate -- part of the Department staff would conduct a separate search. Although the records there are computerized, they are not easily searched by address and there would be a little bit lengthier search that would have to be conducted to satisfy that particular name match requirement. Any documents that were really older, the former deeds I'm 130 5/21/08 - LAW & GOV'T - BILL 080424 referring to, may have to be referred to the City archives, which is in another location, and that, again, would extend the turn-around time for individuals who may be legitimate owners of property and willing to legally transfer them to a new owner. The deed name matches would result, again, as I mentioned, in rejections. Just in terms of how this would impact the Department and ultimately the customer, the legitimate customer, it would extend the turn-around time. Any of the deeds that are rejected then are returned presumably to the Department, and that means that we handle the documents twice. So we'd expect that there would be a little bit greater impact on the work as well in that respect. I'd like to point out some of the proactive measures that are in place that have been taken by the Records Department, and this is without 131 5/21/08 - LAW & GOV'T - BILL 080424 legislation. As I stated in the beginning of my testimony, this bill 4 seeks to address the serious problem of property fraud, and I would like to for the record mention the proactive measures that the Department has taken to address property fraud, while conscious of the fact that state law governs many aspects of the recording process. So what we've tried to do is to implement those measures which we do not believe would conflict with state law. In February 2004, the Document Notice Program was implemented. This notice letter is sent to the seller and borrower each time a deed or a mortgage is recorded. In the event of fraud, this notice provides the opportunity to start immediate action to address the fraud rather than incurring years of delay before the victim discovers a problem. Addressing the problems of fraud immediately is essential.

As time passes, the problem becomes more 132 5/21/08 - LAW & GOV'T - BILL 080424 difficult to correct. The letter is written in both English and Spanish, and as of May 14th of this year, 657,944 letters have been mailed. To the extent that the proposed legislation establishes existing practices, there will not be any effect on our resources because we already are doing this process. The Department also works with the Philadelphia Bar Association, which established the Fraudulent Conveyance Committee comprised of real estate lawyers, representatives of non-profit organizations such as the Senior Law Center and Philly VIP, as well as representatives from the District Attorney's Office and other City agencies with land records. Over the past several years, this group has met periodically to gather additional information about the incidents of real property fraud and to assemble resources to address it. Through the Lawyer's Referral and Information Service, LRIS, a list of 133 5/21/08 - LAW & GOV'T - BILL 080424 approximately "for fee" attorneys who will work on such cases was established. The LRIS also refers cases to the various non-profit organizations for individuals who are unable to pay. Other departmental measures include capturing the photograph of individuals who walk in documents for recording, as well as signatures and photo ID, all of which are retained in our files. This information is presented to law enforcement as requested. The Department provides assistance to victims by researching documents and providing certified copies of them at no charge. The Department also refers victims and makes them aware of the various non-profit agencies that may be able to assist them. Over the past several years, the Department has worked to revise the notary public legislation and have it introduced in the General Assembly. With the assistance of the Law Department, the 134 5/21/08 - LAW & GOV'T - BILL 080424 proposed legislation was drafted several years ago. Last year Representative Jewell Williams agreed to support this effort and is committed to introducing the legislation in the General Assembly. Notaries perform a key role in confirming the identity of individuals by acknowledging their identity on documents presented for recording. Under the existing law, anyone can purchase notary equipment even if he or she is not a duly commissioned notary public. This would change under the new law. The proposed revision also requires that many individuals requesting notarization provide a thumbprint to be affixed in the notary's journal. This provides for traceability and identity for law enforcement should the transaction turn out to be fraudulent. In closing, the Department of Records has introduced programs and policies to deter and detect fraudulent recordings. There are legal limits to 135 5/21/08 - LAW & GOV'T - BILL 080424 what we can locally do within the state-regulated area. And while the bill 4 is clearly well intentioned, in practice the bill may create many unintended consequences, will significantly increase staffing needs and resources to ensure compliance and may not really truly deter fraudulent document recording of deeds. Thank you for the opportunity to present this testimony, and I'd be happy to answer any questions you may have.

Thank you. COMMISSIONER DECKER: I would like to point out one other thing. I did submit with the testimony copies of the cameras that we have at the front counter, as well as copies of the signature log and as well as copies of the photo IDs which we retain in our files, a copy of the document notice letter which we send and also a copy of several maps we have drafted onto map 136 5/21/08 - LAW & GOV'T - BILL 080424 coverage the incidents of suspected fraud that are reported to the Department. Now, we don't know whether those incidents that are reported to us are in fact fraudulent. We do not know what the outcome of them are, but, again, these are the addresses and the properties that are affected. And you will notice that we took them and matched them to a list that we received, a vacant property list, and you will notice that there is a great deal of commonality in the appearance of vacant properties with the incidents of reported fraud. Thank you.

Thank you, Commissioner. I note Councilman Goode has a question. I just wanted to ask one and then we'll go back a little bit. Obviously one of the main issues that was raised by this and, quite frankly, when we had conversation, we talked about this. There's a lot of 137 5/21/08 - LAW & GOV'T - BILL 080424 people that just can't believe that there is not a check to see that the person selling the property is the same name that's on the deed. And just for the record -- and we can get into a debate later, I guess -- right now is it true that there's no check to see that the name of the seller matches the name of the owner on record right now? COMMISSIONER DECKER: Right now there is no check to do that, and as we have explained previously, we do what we can do under what our understanding of the state law is. Again, this is an area that is regulated by state law. We've implemented measures which we believe do not conflict with state law. However, we don't want to do anything that is not permitted by state law and, therefore, we do not perform that check.

And just a follow-up on that. But there is nothing in the state law that says you cannot check the names, correct? 138 5/21/08 - LAW & GOV'T - BILL 080424 COMMISSIONER DECKER: The state law provides -- and our attorney can explain more, but I will explain to the best of my ability what I understand state law requires us to do. For those of you who may have been members of Council previously, you will recall that there was a lawsuit filed against the Department of Record, and that lawsuit dealt with the backlog of documents that needed to be recorded. There was great effort through that suit and a number of claims were filed, which the City continues to pay, that required us to move the documents quickly. There is a provision in state law that tells us to look for a certain number of items. If those items are present on the document, we are to record it. There is a section of state law that tells us to record and index immediately. We look for the list of those items, which are simply a form of information that is made to be available on the public record. 139 5/21/08 - LAW & GOV'T - BILL 080424 The recording laws, as I understand them, are centuries old. The objective of the recording law is not to prevent recordings, but it is to provide public notice of the owners of properties and also of liens, various types of liens, including mortgages which may be filed against that particular property, so that a creditor understands the lien priority in which they can collect on that debt. So the whole intent of the law is really to make these public records and, again, not to screen them for other than the elements which are listed in the state law to be checked.

Again, and I know we've had this debate before and I don't want to belabor the record, but it's one thing to say you don't want to hold up the process, but it's hard for me and I think it's hard for a lot of people to tell the public that somebody can sell a property and there's no check 140 5/21/08 - LAW & GOV'T - BILL 080424 to see that they're the owner of the property. And I can't believe there's anything in the state law that would prohibit you from doing that, and I can't believe that it would take that long to do. I don't want to hold up the process. I don't want us back to where you were. And you did a terrific job in cutting down that time frame, and you did a good job on a lot of things, but the basic premise that I could come in and sell Councilman Goode's property and it wouldn't be checked borders on ludicrous to me. COMMISSIONER DECKER: Well, again, we follow what we believe are the mandates of state law. It's not something that we prefer to do. This is what our understanding of state law. It's not a personal thing. We have great sympathy for the victims of fraud. They do come into our department, and we understand how burdensome it is for them 141 5/21/08 - LAW & GOV'T - BILL 080424 and how difficult a process it is for them to have the property returned. I don't -- it's not a personal thing. It's not an emotional thing. Again, we are doing what we understand the state law requires us to do. And we did distribute as part of the testimony the letter from the Law Department which explains more the legal background of these various issues that are raised in this meeting this morning and also by this legislation.

I understand that, but there have been lawyers who have looked at the same thing and think that the state law does not conflict. But I guess we can go back and forth on this forever. I think Councilman Goode --

I'll defer to Councilwoman Miller.

Councilwoman Miller.

Yes. 142 5/21/08 - LAW & GOV'T - BILL 080424 Hi. Good afternoon. COMMISSIONER DECKER: Good afternoon.

Does the state govern when owners are notified? Isn't there some way you could notify the owner of the potential sale prior to the recording and make that a step that's on the seller and not on you? COMMISSIONER DECKER: I believe that would be in conflict with state law, but I'm not the lawyer, so our attorney would have to respond to that. But, again, we follow what the law tells us to look for. If those elements are present, we record. If they are not present, we reject. That means that in some cases a document can be fraudulent and it will recorded. In some cases it may be a perfectly legitimate transfer, but there is some technicality in the form in which it's presented and it will be rejected. We do send the document notice letter after the document is recorded to 143 5/21/08 - LAW & GOV'T - BILL 080424 provide notice. It is my understanding we can do that. I don't believe we would be permitted by law to hold the document that came into the office until we sent the notice. Many of these cases, I might point out, from what we see -- again, this is nothing that I can provide to you concrete information. It's just our sense of what comes in. Many of the letters that we send -- not many, but letters that we send, we match to the Revenue Department's real estate files, and the strategy in doing that is because the Revenue Department theoretically should have the latest, if it's an off-property address, should have the latest and most current off-property address if there is one. So we send to an off-property address. We check for that. If that is not present, we send it to the address of the property itself. Some of the documents, the letters, come back because 144 5/21/08 - LAW & GOV'T - BILL 080424 they're undeliverable. My sense is that you would probably be establishing an inordinate delay to the many individuals who are legitimately trying to have their documents recorded, and there would be no 7 guarantee that the property owner would actually receive it. If they haven't notified the City that they are not residing in the property and have neglected to notify the Revenue Real Estate Unit that they have changed their off-property mailing address, there really would be no way to notify them. And, again, our experience is that many of these properties that are involved in this are not owner occupied and the owner is living elsewhere. So I understand the concern. I'm just trying to point out what we observe and what our experience is in dealing with these cases and also what our understanding of the law is.

How many of these cases where someone has acquired 145 5/21/08 - LAW & GOV'T - BILL 080424 the property fraudulently has been reversed? Because I can't believe how long it takes to get it undone. And I thought maybe if we could figure out a way to do prevention from having the deed recorded, then -- and even if it does take another 30 days, that's what I'd like to know. And this is not my turn for questioning. It's actually Councilman Goode's, but I'd also like to hear from the Department on your ideas for prevention. I don't need to hear it right now, but I do want to hear it, because I'm going to let Councilman Goode get to his questions.

Councilman, if I could just interrupt one second and just point out, Commissioner, when we were talking before about the state law, my office checked, and most of the surrounding counties have some check, and they do it a little bit differently, but they have some check that it's actually the owner that's selling that 146 5/21/08 - LAW & GOV'T - BILL 080424 property, the owner of record. So they do it and I don't think the state is stopping them from doing it. Now, I know they're smaller and I know it would take more time, but unfortunately, when there's illegal acts done, sometimes it takes longer as a result for innocent people. We wait longer in airport lines now. We have to wait longer at concerts. It takes longer to do a lot of things. Us innocent people are victimized also by illegal activity, but I got to think the majority of people would understand that, just like we understand it takes longer to get through the airport now because of obviously what -- for obvious reasons. I think most people would understand that it's going to take a little while longer because all these properties are getting stolen. Not one or two. Lots of them. We can debate the number, but lots of them. And I just -- I have to just put that on the record. 147 5/21/08 - LAW & GOV'T - BILL 080424 Sorry, Councilman Goode. Councilman.

Thank you, Mr. Chairman. Good afternoon, Commissioner. COMMISSIONER DECKER: Good afternoon.

Thank you for your testimony. A lot of your testimony relied upon legal opinion from the Law Department on the thought that there is automatically some state preemption involved in this matter, and I asked the Chair if I could question the gentleman from the Law Department before he proceeds with testimony, before we move any further in the hearing, for several reasons. And for the record, within your testimony you stated that the gentleman from the Law Department could explain to us the legal issues here. With all due respect, a legal opinion is just that, it's a legal opinion. It is meant to advise us of an opinion, and it 148 5/21/08 - LAW & GOV'T - BILL 080424 is what it is, and most times it's extremely helpful, which is particularly why I like to question the Law Department on several issues, not even jumping directly into the issue of state preemption, which is broad in this matter, but more specifically. Has the Law Department seen the proposed amendments to this bill?

John Mondlak from the City Philadelphia Law Department. Councilman, yes, we have seen the amendments. Councilman Greenlee has been kind enough to meet with us on several occasions to discuss not only the amendments that he put forward but ideas that we may have to try to amend the bill.

And do you believe that the proposed amendments clarify some of the issues that were addressed in the legal opinion?

I think that they do clarify some of the issues that were 149 5/21/08 - LAW & GOV'T - BILL 080424 addressed in the memorandum.

So we can take some of those issues off the table?

That would be correct.

Even before the bill is amended, which takes some of the issues off the table, the bill itself in a number of different places, starting with Subsection 2-202, Requirements, states, "The requirements of this Section 13 are in addition to any requirements provided by state law, local law or regulations promulgated by the Department." Doesn't that, in and of itself, provide some cover, the fact that the bill as it's talking about requirements begins with the discussion of state law, moves to local law, then actually allows for the Department to create its own regulations within the context of state law?

In my opinion, I 150 5/21/08 - LAW & GOV'T - BILL 080424 think it creates some ambiguity because --

Ambiguity does not necessarily present conflict.

I don't know if I agree with that. The state law that's most relevant is the law that says all deeds presented to the recorder must be recorded immediately, and a lot of that stems from that analysis where you're rejecting deeds and telling people that, look, there's a typo or there's a missing letter in your name and you need to go get a deed reexecuted. I don't think that's what the law was intended, and I think a lot of --

Where does it say that within the bill?

It says that the match -- the grantor on the deed presented must match the grantor on the -- I'm sorry. The grantee --

I'm asking could you specifically reference what 151 5/21/08 - LAW & GOV'T - BILL 080424 part of the bill you're referring to?

Section 202 -- 2-202, Subsection (1), "No deed shall be recorded in the Record Department unless a records check, conducted by the Department, verifies that the named grantor on the deed is the record owner of the real estate identified therein, with exceptions," except for --

Exactly. It's with exceptions, and then it lists four exceptions. The fourth exception it lists is (1)(d), which says, "Any deed where, pursuant to regulations promulgated by the Department, a grantor, other than the record owner of the real estate identified in the deed, may be appropriate." In other words, the Department can come up with its own regulations within the context of state law, and that is an exception to that first part of the requirement. Is that not correct?

Well, I think you 152 5/21/08 - LAW & GOV'T - BILL 080424 have to start from the fundamental question about whether or not the requirement set forth in 202(1) conflicts with state law.

It provides exceptions.

Well, if the Commissioner were to accept all of what was set forth in 202(1), then possibly there wouldn't be a conflict, but I don't know that that would achieve anything that the Councilman is trying to achieve.

It was not my understanding that you were speaking to the legislative intent. It's my understanding you were speaking to whether there was a legal preemption, and my question is whether that legal preemption is actually valid given that there are exceptions presented within the context of the bill and essentially the drafting of the bill allows that the Department can create its own regulations in the context of state law. 153 5/21/08 - LAW & GOV'T - BILL 080424

Then I would agree that if she drafted a regulation that indicated that she should not follow Section 202(1), that there would be no 6 conflict, if that's your question.

No. If she drafted regulations that basically created Department regulations under that section in the context of state law.

I think the concern the state law --

As long as the regulations the Department is adhering to. And that's not the only place in the bill that allows for the Department to do it. At the end of it, in Section 2-204, Regulations, it says, "The Department is authorized to promulgate such regulations as are necessary or appropriate to implement the provisions of this Chapter." In other words, a lot of this is placed back in the hands of the Department to create their own 154 5/21/08 - LAW & GOV'T - BILL 080424 regulations in the context of state law. Is that not correct, or is that at least debatable?

It's certainly debatable, and I think your characterization is correct.

So there is not direct conflict, but simply, as you've stated, ambiguity?

Without regulation, I think there is a conflict.

Well, without regulations, there's a conflict, but a conflict that can be cleared up through regulation on a local level --

Yes.

-- within the authority of the Department as given by this bill. So if the Commissioner chose to set up regulations that were purely in line with the state law, then there would be no conflict.

There would be no 155 5/21/08 - LAW & GOV'T - BILL 080424 conflict. I'm not sure there would be a purpose to the bill at that point.

Well, as I said, I'm not sure the purpose of your opinion is to discuss the legislative intent. I think at the end of the day Councilman Greenlee, if this is the bill 9 he's comfortable with, along with the amendments, and the amendments take some of the issues off the table, that's for us to decide whether we pass it, whether it fulfills our legislative intent and whether as we believe those ambiguities, which do not conflict with state law, can be resolved by the Department.

Again, Councilman, I think that if she passes a regulation that essentially says not to do what was set forth in 202(1) --

That suggests that the Commissioner chooses to do that, but we will not have done that by our action.

Correct, you 156 5/21/08 - LAW & GOV'T - BILL 080424 would not have done that.

As long as we gave the Commissioner the authority to create her own regulations that are not in conflict with state law.

I don't --

She is free to create her own regulations that do not conflict with state law, and we have given her that authority under this bill.

Yeah. I mean, you're still asking her to make a determination then about whether or not this law conflicts and whether or not to follow it. If you're saying that that was built --

No. We're asking her to create regulations. I mean, this is part of a legislative process. As part of the legislative process, she's come before this Council, says she doesn't want to do anything that conflicts with state law. We're not going to ask her to do anything that 157 5/21/08 - LAW & GOV'T - BILL 080424 conflicts with state law. We're going to ask her to create regulations within the context of state law, and essentially that's it in a nutshell. At the end of the day, there is no conflict and there is no ambiguity as long as she does what she's testified that she intends to do, which is not do anything that conflicts with state law, creating regulations that conflict with state law. In essence, another way of interpreting this bill is that we are asking the Commissioner to create regulations that do not conflict with state law.

Again, if her regulations were to say state law says I must record a deed immediately and Section 202-1 asks her to review and match it against the prior deed and she doesn't do that, would she be violating state law? No. But would she be giving any effect whatsoever to this ordinance? No. But I understand that's not your question nor your point. 158 5/21/08 - LAW & GOV'T - BILL 080424

Well, it's not my question or my point. As long as we are satisfied with the legislation that we pass, as long as it does not legally conflict with state law, as long as we have given the Commissioner authority to create regulations that do not conflict with state law, then the bill is clean.

Well, I still think the bill as written is not, because the bill as written conflicts. Now, you're saying if she passes a regulation, can she bring it into compliance with state law, then maybe, but she hasn't. There aren't any regulations.

That's an extremely rigid interpretation. I mean, in essence, what you're saying is that we couldn't pass any bill in this issue. Is that what you're saying?

I think that you are limited in what you could do in the area of recorded documents. 159 5/21/08 - LAW & GOV'T - BILL 080424

Limited to what?

Limited to the confines of state law, which has set up a system to provide for a records department to immediately take in documents and record them. That was the goal when it was set up.

Which means could we pass any local law on that issue?

That affects that, the ability to record documents immediately or soon thereafter? I think you're very limited in that area.

And you believe that this bill does that at the same time that it leaves the authority in the hands of the Department?

Yeah, I think it does, because it's not written with regulations adopted that should be promulgated. As written as passed, it does ask her to do something that -- now, 160 5/21/08 - LAW & GOV'T - BILL 080424 the Law Department is -- I didn't author the memorandum that's before you and I'm not sure --

So the last question, because I promised the Chair I would be as brief as possible. So this bill is amendable to the point that it does not conflict with state law?

I'm sorry. This bill is?

Amendable to the point that it does not conflict with state law. Is the bill amendable to the point to which it does not conflict with state law?

Are you asking me for an amendment that will make it not conflict?

No. I'm asking is the bill amendable to a point in which it does not conflict with state law?

I don't think I fully understand your question. 161 5/21/08 - LAW & GOV'T - BILL 080424

Can we amend the bill to a point in which you're satisfied that it does not conflict with state law?

I can't offer a suggestion to do that, no. 8

I wasn't asking for a suggestion. I'm asking in your legal opinion whether you believe the bill is amendable to the point that it does not conflict with state law.

I don't believe that it is.

And is it because of the title?

No. 18

Then what portion of the bill --

The requirements where the Commissioner is asked to do checks and reject documents based on criteria.

So you're assuming that's not amendable? 162 5/21/08 - LAW & GOV'T - BILL 080424

Can you amend it and take it out and pass the bill?

I'm asking you, are you assuming that's not amendable in some way?

Sure, you could amend it and take out those requirements, but I don't know what you have left. You may not have a bill left.

We may not have a bill left? What exactly does that mean?

If you amend it to remove everything, I don't know -- you're asking me if you could take out the things that were identified as problematic.

Don't take this the wrong way. How long have you been with the Law Department?

I'm sorry?

How long have you been with the Law Department?

Eight years. 163 5/21/08 - LAW & GOV'T - BILL 080424

Have you not seen bills amended substantially as long as they don't change the title?

I'm sorry. Your question has to do with whether or not you could change the bill without changing the title?

No. My question is whether we can change the bill in a way in which you would be comfortable it does not conflict with state law.

By removing the requirements on the Records Department, sure, yes.

By removing the requirements on the Records Department?

That she conduct searches and reject documents, yes.

I'm sorry. Tell me specifically what part of the bill you're referring to again.

Section 202, 164 5/21/08 - LAW & GOV'T - BILL 080424 Subsection (1).

And which part in particular?

Most of this is set forth in the memorandum dated May 19th.

What part in particular are you referring to?

The memorandum?

No. What part of the bill are you referring to?

Section 202, Subsection (1).

The same portion you read into the record before?

Correct.

And where you stopped at the comma rather than go on to include the exceptions?

Well, without that section, I don't know what the point of the exceptions would be.

Well, I don't understand why you stopped at the 165 5/21/08 - LAW & GOV'T - BILL 080424 comma rather than include the exceptions.

Are you asking me to read the whole thing?

No. I'm asking you why you stopped at the comma rather than include the exceptions.

Before? Just to make the point of what section I was referring to.

Well, or because clearly I think (1)(d) allows the Commissioner to create regulations that do not conflict with state law and would not make the bill invalid. But thank you for your testimony. Thank you, Mr. Chair.

Thank you. Actually, I have a follow-up to that, but I know Councilman Kelly has been waiting. Councilman Kelly.

Thank you, Mr. Chairman. 166 5/21/08 - LAW & GOV'T - BILL 080424 I just have more or less a comment that I'd like to make. Commissioner, I know that you're working within the guidelines of state law, but common sense tells you that state law is not doing anything, anything to help us solve the problems that we're experiencing in Philadelphia. And it's a little frustrating to this Council to see that the Law Department and the Records Department is sort of, I think, being obstacles to any improvements that we could make to state law. And this bill, I think, is just trying to, in my opinion, it's trying to put more methods in place to prevent this activity that's currently been taking place over the last few years, and I'm just bewildered of why you're not supporting this bill and future bills really. As Councilman Greenlee has said, this is only one part of it. It's not a cure all. It's only going to help. And we're trying to help your department to 167 5/21/08 - LAW & GOV'T - BILL 080424 prevent this type of activity, and I'm just frustrated to know that you're not supporting this bill. COMMISSIONER DECKER: Councilman, I think we've been very careful in the testimony to make it clear that we're not providing or presenting obstacles. If you looked at some of the language that I used in my testimony, I'm merely trying to point out that there may be unintended consequences to what this bill -- what the impact of this legislation will be. I don't believe that the Law Department is trying to set up any flags or obstacles either. We're just trying to give you, in the case of the Law Department, the best legal interpretation.

Well, it's interpretation. COMMISSIONER DECKER: Well, I'm just talking about the experience that the Records Department has been through. 168 5/21/08 - LAW & GOV'T - BILL 080424 A lot of companies and individuals like to bring suit against the City. We're trying to provide some advice and guidance on what past history and past experience with the Department in this respect has been and perhaps to, again, just to provide some additional information about the unintended consequences and some of the experience that we've had in dealing with state law and in some of the cases that have been presented to the Records Department, which the City Records Department has lost and for which we continue to pay claims. So all we're trying to do is not to provide any obstacles. We are very sympathetic to the victims of fraudulent recordings. We've implemented as many measures as we can which we believe are within the confines of state law, and, again, we're not here to support or oppose the legislation. We are trying to provide information that 169 5/21/08 - LAW & GOV'T - BILL 080424 will help Council to make an informed decision and understand the consequences and the impacts of this legislation if it is passed.

Well, I hope you realize that we're just trying to be more specific. We're trying to really help law enforcement and a lot of other -- and, of course, your department to try to prevent this activity from taking place. And please, that's all I'm asking for, is that you open up your minds to accepting some of this legislation that we're about to propose. COMMISSIONER DECKER: Again, we're not here to provide obstacles to support or not to support the legislation. Again, the testimony was crafted to simply provide information which helps Councilmembers to make an informed decision.

You have to remember that state law itself doesn't help us in Philadelphia in many cases. 170 5/21/08 - LAW & GOV'T - BILL 080424 Currently we have our Mayor and Police Commissioner fighting for additional policies or --

Weapons.

-- bills about weapons in Philadelphia. So I don't think the state has a cure all either for a lot of different reasons, and they may not be aware of the problems that we face here in Philadelphia about these properties being stolen or whatever from underneath people. So what we're trying to do is trying to do everything we can possibly to give relief to those people who have their properties stolen and to prevent this activity from happening in the future. Please bear in mind that this Council is not against your department or the Law Department or anything, but what we want to do is give relief to people who are experiencing this terrible, terrible situation. Thank you. 171 5/21/08 - LAW & GOV'T - BILL 080424 Thank you, Mr. Chairman.

Yes. Thank you. I'd like to know an example of an unintended consequence that's more than delaying the system, delaying the process. When people -- you gave an example of sometimes people filing lawsuits. Lawsuits against the City for what? COMMISSIONER DECKER: Well, I mentioned as unintended consequences if we perform a deed name match, there will be, we believe, many cases in which legitimate transactions will be rejected because the name does not match exactly. Some of the examples of that would be if a prior deed had Joe Smith's name and the current deed presented has Joseph Smith or a prior deed had John T. Smith and the current deed has John Smith. There would be no way for the staff who process these documents to be able to discern whether that is in fact the same person and 172 5/21/08 - LAW & GOV'T - BILL 080424 whether that is a legitimate name. So we would reject that transaction. Based on the sample that we took, we believe there might be as many as 38 percent --

Commissioner, why would you reject it? COMMISSIONER DECKER: Because it wouldn't match -- the names would not match, so we couldn't accept it under the provisions of this legislation.

Under the provisions of this legislation you are allowed to create your own regulations that can deal with that matter. COMMISSIONER DECKER: My understanding of that legislation is that the ability to implement and create regulations come under that section. My understanding is that we might be able to look for or eliminate or accept certain things, but definitely not everything. So I don't know where we would draw the line.

I believe 173 5/21/08 - LAW & GOV'T - BILL 080424 that's one matter you definitely could deal with directly within your own regulations.

And that's why I think that sitting down with the Councilmembers that are interested in this and figure out a way we can work together to come up with some legislation, because our bottom line is to help prevent people from fraudulently taking other people's homes, period. And if it would add some more time to the process or maybe there's some waiver system that has to happen, then let's figure it out, work together on this, not against it. COMMISSIONER DECKER: We're not working against anybody, I can assure you.

Okay. So we just have to figure out how we can prevent it, and if it takes longer to process a deed, then so be it. COMMISSIONER DECKER: We are 174 5/21/08 - LAW & GOV'T - BILL 080424 trying to make you aware of that, that it may in some cases and it may pass on additional costs to those who are presenting documents to the Department. If they're no longer able to send it by mail, they have to walk in, they may have to incur additional costs to make that happen.

Well, maybe that's some of what we can work on, figure out ways that we can do this that's cost effective and doesn't cost some of our constituents a lot of undue stress. We don't want to put a heavy financial burden on people, but the bottom line is -- because it takes too long to undo. I believe that that gentleman that took -- that Tom described as being the owner of impacting four different continents, I think his house is still -- Tom's house is still in his name. So when we're talking about time, it takes too long to undo what these folks are doing. So if we can figure out 175 5/21/08 - LAW & GOV'T - BILL 080424 a way to prevent it and even if we have to add time on the front end rather than on the back end, then that's what we, I think, need to be looking at. Thank you.

Thank you, Councilwoman. I totally agree, because it was pointed out, I think, at our meetings -- and Julia O'Connell from my office has gone to a lot of these hearings lately -- once you get in that hearing process, it's ugly. There's no 14 way to do it neatly. There's no way to do it friendly. When there's a second victim or alleged second victim involved, it's a mess. And it seems to me that to take the little extra time -- and I would argue it's a little extra time -- to try to stop it from going from step one to step two is important. And I would still maintain and as not a lawyer, as I always say, I can use logic more than law, but I can't believe that what we're doing is a conflict of state law. I just don't 176 5/21/08 - LAW & GOV'T - BILL 080424 believe that. And I think there's a difference between conflicting and complementing, and I think we're complementing. Councilman Jones.

Just a question. How long does it take for a deed to show up registered today? COMMISSIONER DECKER: Two to three days.

And that's down from? COMMISSIONER DECKER: At one time -- two to three days to be recorded and approximately two weeks to be returned. At one time, it took 12 months to be recorded and returned.

I remember those days, actually. And if somehow we meet the state challenges and implement this on a practical management day-to-day level, what is your estimate of time added to the process if we do these checks? What is your guesstimate? 177 5/21/08 - LAW & GOV'T - BILL 080424 COMMISSIONER DECKER: Councilman, I don't have an estimate for you because the situations that we would deal with when presented with these different rules to check we've never encountered, and I can't give you -- I can't come up with a number of the number of items that would not match. I have the sample which gives me some information, but it's not complete. I don't know exactly how many documents will be submitted that will require these additional pieces of documentation which we'll have to scan and process, nor do I know how many will be rejected, which will take additional time, nor do I know how many will have to be researched at these three different steps. So it is information that we certainly will collect, but I'm not in a position to be able to anticipate. I do know that it will add time, but I couldn't tell you how long. 178 5/21/08 - LAW & GOV'T - BILL 080424

So in the total universe of deeds that you get on average is how many? COMMISSIONER DECKER: Sixty thousand a year, and we process about, all told, about 250,000 documents a year. Sometimes a little bit less; sometimes a little bit more.

So in a compromise, is there a way to do a sampling, a number of deeds that could go through a process like that, just so that the perpetrators of these crimes would know that we are checking in some way beyond what we currently do? Is there a way to if we didn't do 60,000, that we did 6,000? COMMISSIONER DECKER: We can do an automated sample after the fact to see what does not match. That would be after the fact of recording. That would give us a little bit more of a sense, but we do not capture who presents the document. Once a document is recorded, unless a 179 5/21/08 - LAW & GOV'T - BILL 080424 title company or a law firm stamps on the document their name, we would not know if that was walked in or by whom.

But, again, Commissioner, if we did a sample in the front end, if we said that one out of ten we're going take and we're going to put through the match, just so that there is a test that people believe would be a deterrent to the crime and that they know they run the risk of running the gauntlet that you may be that tenth time. Similar to when people cross the border into this country, they don't check everybody, but they check one out of ten. So that people at least get a sense that we are looking and will run an extra check on things. Is that something that would not -- COMMISSIONER DECKER: We certainly could look at that, yeah.

And, Councilman, if I could just add very quickly, if I'm right, Commissioner, you 180 5/21/08 - LAW & GOV'T - BILL 080424 gave the 60,000 figure, but given the fact that we're excluding title companies, attorneys and law firms, if I remember at the meeting yesterday, didn't you say that that would -- and the sheriff's deeds, that we're really down to percent of that 60,000 that would 9 really be covered under this bill? 10 COMMISSIONER DECKER: Yes. 11 That's correct. 12

So it's 13 not 60. It's 15 percent of 60,000. 14 Thank you. 15 And, Mr. Haver, you've been very patient. It's a long day, and we're trying to get through this and I know we got other things to do.

And I'm not going to read my testimony. I'll be very brief.

Thank you.

I do want to just once again state Commissioner Decker has 181 5/21/08 - LAW & GOV'T - BILL 080424 been in the forefront of making very positive changes. I think these recommendations in this bill are necessary. We should always strive for continual improvement. Everything we do that improves creates another problem, which we should try and solve. I would ask once again that Council look at the issue of the name match. When we have documentation that suggests that it's a high number, that we look at what that problem is and see if it's names such as missing middle initials or Joseph instead of Joe or Joe instead of Joseph. If that's all it is, that part should go forward. If it's a bigger problem, we should hesitate and look at it again. I would just, Councilman, you were asking about the number of family members. On the letter that we send, we ask people to come to our office. We routinely try and persuade people who are engaged in a family issue not to use the 182 5/21/08 - LAW & GOV'T - BILL 080424 court system, to resolve it personally. It's a very difficult call, I understand, but sometimes people don't understand that they're going to ask -- they're going to be asked to prosecute. I would hope that you would send a letter to the District Attorney -- you asked how many prosecutions there are. I was not sure I heard an answer. I would hope that you follow up and get a complete answer. We are told from the people who we speak with that they are frustrated that there's no prosecution. We are told that they are frustrated that there's no follow through. So I will hope that you will do that. I would also hope that you would -- as I know it doesn't do a lot of good, but it would do some good to pass a resolution urging the State Legislature to act on the notary bills. That is a significant problem that you cannot control, but, again, as Councilman Kelly said, I don't know that the state always 183 5/21/08 - LAW & GOV'T - BILL 080424 knows what our problems are.

And just for the record, Mr. Haver, and I talked to Councilwoman Miller about this because the resolution is hers, that we're going to keep the record open on the resolution 8 and hopefully bring -- it just didn't work out today, but bring some state people back -- it's probably just as well. We'd be here until 4 o'clock -- bring some state people back and talk about specifically the kind of things that they can do. So I'm sure we'll need your input then, too. Thank you.

I could belabor the point, but I don't think it's necessary.

No. I got you. Thank you. Thank you all very much. Thank you for coming. We're ready to go -- anybody else need to testify on this? You want to testify? Okay. (Witness approached witness 184 5/21/08 - LAW & GOV'T - BILL 080424 table.)

If I could respectfully ask you to be as brief as possible, because we're running into another hearing. Could you identify yourself for the record and proceed, please.

Hello. My name is Kenneth Fleisher. I'm an attorney at law in the City of Philadelphia. I appreciate the opportunity to come forward, Mr. Chairman, members of the panel, to be here today. I am not testifying in any official capacity, although by way of my own background, I am a former Chair of the Real Property section of the Bar Association. I have also been very involved personally with the fraudulent conveyances task forces that have been set up by the Bar Association. I've worked closely with Commissioner Decker on many occasions. I have taught CLE courses on fraudulent conveyances and 185 5/21/08 - LAW & GOV'T - BILL 080424 chaired CLE courses on fraudulent conveyances. So I have more than just a passive knowledge of this extraordinary and deep problem. I am thrilled that the Council is taking this problem head on. I think it is an important gesture to the City of Philadelphia, to its citizens and to everybody who comes into the City of Philadelphia to do business to know that the City Council takes this very serious problem very seriously, and I'm heartened by that, and I am very pleased to say that you are doing a remarkable job in taking this on directly. My comments are to some of the more technical aspects of this bill. I don't come here with a legal memorandum. I come here, however, with years of 21 practice in the real estate area of law 22 and a more than working knowledge of what 23 happens on the ground level. 24 Specifically, there are some 25 sections of the law which -- or the 186 5/21/08 - LAW & GOV'T - BILL 080424 proposed bill which I believe will create problems that are, as Ms. Decker said, unintended consequences and also may not really address the questions that the bill is trying to solve. Looking at the requirements imposed by Section 2-202 on the recording of a document, there are some exceptions to the proposal of the Recorder's Office verifying the names of the deeds. I don't want to get into and reiterate Ms. Decker's testimony in that regard, but there are some questions I have about the way this bill is presented. For example, it seems as if the way I read it, Section 202(1) sets forth four exceptions to the Commissioner's office having to check the actual name on the deed against a grantor or grantee indexed previously. Section (2) then takes those exceptions and says, well, if one of these situations arises, here's what is needed to be presented in that regard. So I want to focus more 187 5/21/08 - LAW & GOV'T - BILL 080424 specifically on Section 202, Subsection (2)(a), (b), (c), (d) and (e), because I think some of the requirements here don't really solve the problem and may create additional problems or issues or, as Commissioner Decker said, some unintended consequences. First of all, from my own experience, most of the problems involving fraudulent conveyances of property deal with forgery. This bill 13 does not and really cannot deal with the issue of how property -- how signatures on deeds are forged. That is a notary issue in many regards, and as Commissioner Decker testified, I would encourage this Council to ask the state legislators to address that issue by reforming the notary law. But with respect to Subsection (b), for example, where the grantor has been granted power of attorney, written documentation of the power of attorney shall be provided, that's an excellent 188 5/21/08 - LAW & GOV'T - BILL 080424 idea. The question is, what is the written documentation. Does the power of attorney have to be in a recordable form itself under state law? I think the answer to that would be yes as a matter of state law, but the grantor on a deed is not the power of attorney. The grantor on the deed is still the person who is the punitive owner of the property. When a deed is written, if a deed is being signed by an attorney-in-fact, it would be written, for example, as Kenneth Fleisher, grantor, by his attorney-in-fact, whoever that might be.

So the grantor named in the deed is actually supposed to be the owner of the property, not the power of attorney himself or herself. That may be a technical issue, but it's something which as a real estate practitioner, we wouldn't want to come in with the wrong documentation or the wrong type of information. Subsection (c) I have more of a 189 5/21/08 - LAW & GOV'T - BILL 080424 visceral problem with. It says where the grantee is a trustee, the writing creating the trust shall be provided. Many trusts involve families who do not want their affairs to be public. They want to deal with their monetary or transfer of property issues in a private venue. Trusts are not written necessarily to become part of the public record. Unlike a will, which by its nature must be made public in order to be made effective, a trust does not. Trusts are not customarily signed in a recordable form. Trusts may not be signed or created in the Commonwealth of Pennsylvania or involve people whose property or whose lives or whose residences deal with the Commonwealth of Pennsylvania. To require a recordable form of a trust to be recorded in order to record a deed is not only a burden, but I think would place an unusual restriction on those who are dealing with trust property. 190 5/21/08 - LAW & GOV'T - BILL 080424 If the named grantee in the previous deed is in fact a trustee, then that, in and of itself, should carry forward, without the necessity of giving the recorder a private document, which may when it was created 20, 30, 40, 50 years ago, who knows when, may not be in recordable form. That could literally prevent this deed from being recorded. Subsection 2-202(d) requires that documentation of the filing of articles of incorporation of a corporate grantor be provided. Again, candidly that's not the issue. The question whether the grantor is a corporation -- whether that grantor is legitimately represented by the signatory as an officer of the corporation is not addressed by whether there's a good standing certificate. It's addressed by whether there is a resolution or whether there is a bylaw or whether there is something giving the corporate authority to the signatory of that deed. That 191 5/21/08 - LAW & GOV'T - BILL 080424 might be just a matter of there being a corporate bylaw, because under many corporate bylaws the officers are vested by virtue of the bylaws with the authority to transfer title. But merely giving a copy of a good-standing certificate or of the existence of a corporation does not address the issue. The seriousness of the issue is whether the person signing that deed has the authority on behalf of the corporation. I don't believe Subsection (d) would address that issue. The personal delivery aspect of Section 2-202, Subsection (3) also gives me great pause. I know there is currently a program for electronic recording of documents. The way this is written, as I see it, this would literally prevent electronic recording of documents. That, in and of itself, has been a tremendous program, which cuts down on the possibility of the fraudulator performing a fraud, because 192 5/21/08 - LAW & GOV'T - BILL 080424 the idea, which I believe this Council is properly addressing, is let's identify the person who is presenting the document, because if you know who is giving you the document, the police and the Economic Crimes Unit can trace the origin of that document. The toughest thing for a criminal to face is knowing that he can be found. That is the issue. So I don't think this Council would presume to prevent all electronic recording of documents, but this would do so the way it is written. Further, the concept of --

Sir, if I can just interrupt you for a second.

Sure.

We have an amendment that's going to address that. So we're addressing that issue.

I appreciate that. And I was not aware of that and thank you, Mr. Chairman, in that regard. With respect to just personal 193 5/21/08 - LAW & GOV'T - BILL 080424 delivery, as it is written I can think sitting here of many ways that any even not so clever criminal -- because I'm not so clever and, thankfully, I don't think I'm a criminal -- could get around that. You could mail a deed to Kangaroo Delivery Service and Kangaroo Delivery Service delivers it over to the Recorder's Office. Anybody can walk in with a deed. Anybody can walk in with a deed that he didn't sign. It's not a question of who is delivering the deed. It's a question of who signed the deed. And I don't think the mere fact that somebody is personally delivering a deed gives the deed --

That whole sentence has been scrapped.

Pardon me?

The whole sentence has been scrapped.

That's what I said. We've made the amendment and -- we can talk about it, but we made 194 5/21/08 - LAW & GOV'T - BILL 080424 the amendment. That is not in there.

I must have been given an old copy of the bill.

You were. We're going to put in an amendment dealing with that issue.

And I appreciate that. With respect to Section 203, when these provisions are exempted for sheriff's deeds, title company deeds, attorney-presented deeds, I also think there should be an exemption in there of banks or regulated financial institutions. There are times where banks and regulated financial institutions deal with transfers of title to property, and I think that the safeguards of those financial institutions, in and of themselves, should be addressed in the general exemptions section of the document. Echoing one concern which I've heard and, again, just anecdotally, I was 195 5/21/08 - LAW & GOV'T - BILL 080424 recently involved in a transaction representing the County of Delaware where there was a loan being made for low-income housing in the County of Delaware. I do a lot of that lending work for the County. And there were several institutional lenders involved as well as the County. The speed of recording of documents is critical to any lender, because if a document is delayed in the recording process, other liens or judgments can interfere with the priority of the lien created by that document or the purported transfer created by that document. In my particular case, I had a closing involving a large low-income housing project. The lead lender was an affiliate of Citibank. It sent its documents in remotely to be recorded, but with a specific letter to the title company saying if these documents are not recorded within 24 hours of the date of signature, you shall return them to us, 196 5/21/08 - LAW & GOV'T - BILL 080424 the deal will not go through, the project would not have been built. If the regulations or the bill 5 presented here were to delay the recording of deeds or mortgages, because a mortgage can't be recorded on a transferred property until the deed is recorded, there's nothing to encumber until the title has been transferred, I see in a real-world situation that many, many lenders will simply not make loans for transfers of property, because their mortgages can't be recorded in a timely fashion. They're not going to release the money until the mortgage is on record. A title company is not going to insure the gap period between the date of signature and the date of recording if that gap period is more than or 48 21 hours in the normal course. If a deed or 22 a mortgage can't be recorded for weeks or 23 weeks while investigations as to its 24 efficacy are ongoing, money won't change hands. Titles won't be transferred. 197 5/21/08 - LAW & GOV'T - BILL 080424 The project in Delaware County, which was for low-income housing, would not have been built, because the escrow letter from the lead lender said do not release this money, do not close this deal until my mortgage is recorded, and if it is not recorded right away, send it back. That's a real-world concern I have about asking the Recorder's Office to act as a title company, in essence, and to check the efficacy of the deeds. I would like very much to find a way to make that happen. I would like very much to find a way to have the Commissioner's office write regulations which would allow that to happen, because I think on a visceral level, you're absolutely correct, Mr. Chairman and members of Council, it's very hard to tell the people in Philadelphia that nobody is looking to see if their names are on the deed or not. But most of the time in my own experience the question is not 198 5/21/08 - LAW & GOV'T - BILL 080424 whether the name of the grantor on the new deed meets the name of the grantee on the old deed. It's more that the name has just been forged, and that's not an issue which can be dealt with by checking the names one against the other. Thank you for the opportunity.

We're going to keep working with the Records Department on various issues that you raise, sir. Thank you for your testimony.

Thank you for the opportunity.

That concludes the hearing. Let me just note for the record that Resolution 080176 will be continued to the call of the Chair. Now we'll go into the public meeting of the Committee on Law and Government. I note for the record that we have a quorum with myself, Councilman Goode, Councilman Kelly and Councilman 199 5/21/08 - LAW & GOV'T - BILL 080424 Clarke, who was appointed by the Council President, and I now recognize Councilman Goode for an amendment on the bill in question.

Thank you, Mr. Chairman. I propose an amendment to Bill No. 080424. It's been circulated to the members of the Committee. I move for the adoption. (Duly seconded.)

It's been moved and seconded that the amendment be adopted. All in favor please say aye. (Aye.)

Opposed? (No response.)

The motion carries and the bill is amended. The Chair again recognizes Councilman Goode.

Thank you, Mr. Chairman. I move that Bill No. 25 080424 as amended be reported out of 200 5/21/08 - LAW & GOV'T - BILL 080424 Committee with a favorable recommendation and the rules of Council be suspended so as to permit first reading at our next Council session. (Duly seconded.)

It's been moved and properly seconded. All those in favor please say aye. (Aye.)

And the record will note that Councilman Green and Councilman DiCicco will also be recorded as voting aye on the bill and the amendment. Bill No. 080424 will be reported out of this Committee with a favorable recommendation and the rules of Council will be suspended to allow for first reading at our next session of Council. It's been a long morning and afternoon. Thank you to everybody for hanging in there, all the witnesses. 201 5/21/08 - LAW & GOV'T - BILL 080424 This Committee on Law and Government will stand in recess. Thank you very much. (Committee on Law and Government adjourned at 1:00 p.m.) - - - 202 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on May 21, 2008, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)