By JAMIE GRAHAM, Associated PressThe New York Times writer and former New York City police commissioner says the real estate industry is on the brink of a crisis and is ready for a reckoning.
The crisis is about to hit home in New York, where a broker who sold a $1.9 million home for $5.8 million has filed suit against him and his firm, alleging they defrauded him out of hundreds of thousands of dollars in proceeds.
The lawsuit filed Tuesday alleges the real-estate broker, David A. Rader, lured him into a $3.9-million home he never lived in with promises of lucrative real estate deals.
The broker and Rader have denied wrongdoing.
Rider is a former member of the New York Police Department.
He said in a statement that he will vigorously defend himself.
The suit is one of the most serious in recent years.
It comes at a time when the realty industry is reeling from a wave of foreclosures and the death of a former broker who was accused of selling houses he didn’t own.
“The market is on a tear,” said Kevin Sullivan, a professor at New York University’s Stern School of Business who has studied the realtors profession.
“Realtors are a highly efficient business.
They don’t make money for the average person.
They make money because they have a very high percentage of their revenue going to them.”
But it’s also a very lucrative business.
If you don’t have a high percentage, you can’t pay the bills, and that’s where the money is going to come from.
“The lawsuit says the broker took advantage of a loophole that allows investors to purchase homes in exchange for a loan.
The complaint also alleges Rader sold two homes that were never actually purchased by the investor and that he later gave the broker a $5,000 check for the purchase of the second home.
The Rader lawsuit alleges the broker and his brother-in-law gave the money to the broker’s son-in a trust.
The suit claims the broker used the trust to buy two houses and make more than $1 million on the deal.
The case was filed in Manhattan federal court in Brooklyn, where Sullivan said he expects the case to go to trial by September.
The lawyer for the broker said he’s confident the case will be dismissed and declined to comment.
The U.S. Attorney’s office declined to confirm or deny the suit.
Rader did not immediately return a message seeking comment.
In recent years, New York has seen a sharp rise in forecloses, which typically take effect in months or years.
The city has recorded more than 2,000 defaults, up from about 1,000 in the first quarter of 2016.
The last time the city saw so many defaults was in 2006, before the housing bubble burst.
The foreclosing rate is now at its highest level since 2010, according to the Federal Reserve Bank of New York.
In the first six months of 2017, more than 6,000 foreclosers closed in the city, according the New Jersey Comptroller’s Office.