It is hard to tell if it is laziness, incompetence, hubris, greed or corruption. A case is can be made that is is a bit of all five, especially when the courts turn a blind eye to the problem.
What really remains to be seen is.... how much deed fraud is too much for the system of property transfer in NYC to withstand?
It is really quite simple. Deeds are the currency of real estate. There are strict rules that must be followed lest the whole thing go sideways.
It is so important that those rules are followed that whoever lends you money to buy real estate almost always requires that you get title insurance from someone who will research the chain of title step by step from time immemorial to the date of the transaction to make sure that you are getting something with a legit title. The title company insures the bank/buyer to the amount of the purchase price based on paying a premium.
- Sometimes Title Companies make mistakes. They pay for those to the amount of insurance.
- Sometimes Title Companies work fast and loose with the truth. They pay for those to the amount of insurance.
- Sometimes Title Companies don't do due diligence. They pay for those to the amount of insurance.
- Sometimes Title Company clients fraudulently induce them into insuring something. They either pay or tell their client that they are not required to pay because fraud cannot be the basis for a contract.
Where it gets really interesting is when the banks are too cozy with the developers and loan based on the property itself as collateral. If the buyer fails to pay they take the property. Simple, no?
But what happens if the deed itself is bad and there is no collateral for the bank to attach to?