Cyber ​​attack against county posed risk to real estate industry, which has emerged intact

The North Fork real estate industry has survived relatively intact following a cyberattack on county computer systems that shut down a critical process in real estate transfers.

An in-person system for title searches was established last Monday, according to Chris Nuzzi, executive vice president and regional director at Advantage Title. The online system is still not available but the public can visit the county clerk’s office and access an internal system of records, he said.

“We have a robust market in particular out on the eastern end of Long Island,” he said. “And the ability to be able to service that market is important. And that was done even throughout that period of time when the county was closed. But had the closure persisted, it was becoming more and more difficult to facilitate new files and open files that you wanted to get the closing.”

The financial website Investopedia defines a title search as the evaluation process of ownership and claims on a property before a real estate transaction is completed. It involves searching public records and in New York, people generally purchase title insurance for legal and financial defense.

“When you buy something from somebody and you give them the title to the property, the title gets recorded and that happens usually at the [county] clerk’s office,” said Joan Bischoff van Heemskerck, a compliance counselor for Town and Country Real Estate. “The title recording basically gives other people notice that you own that property.

Mr. Bischoff van Heemskerck, who spoke to a reporter shortly before county systems were restored, said the cyber attack has made working with county records difficult in general. Most real estate transactions, however, have been able to go through, he said. “It’s not been a disaster. Most real estate agents probably [did] not even [realize] that there’s a problem with closings.”

“What’s happened is that most title companies in the beginning of the process were asking for extra affidavits. So the sellers and the buyers have to sign affidavits that they promised that there’s no liens on the property, that they didn’t do anything to encumber the property. And that was enough for them,” he said.

But as time wore on, title companies became “more and more difficult about these affidavits, and some of them stopped closing completely,” Mr. Bischoff van Heemskerck said. “Some refused to close more difficult deals, such as foreclosures, and attorneys were becoming more hesitant to allow their clients to sign affidavits. The system was “slowly coming to a screeching halt.”

North Fork Real Estate owner Kristen Rische, in an interview before an interim system was implemented, highlighted delays as the primary impact from the county cyber attack.

“It’s not that they can’t get it. It’s just taking them longer to get it,” she said. “We haven’t encountered anything other than really delayed title searches. But that’s the only thing really delayed we’ve seen, is the backlog. But this has been going on for a while [since COVID].”

A deal her agency was supposed to close in May, for example, did not close until the end August as the parties waited for the deed to be recorded. Pre-pandemic, the process would have likely taken between two weeks and a month, she said. Now, it takes around three or four months.

Sheri Winter Parker, a real estate agent at Corcoran in Cutchogue, said she was not really impacted by the cyber attack.

“The attorneys I work with were pretty confident with their title companies and they kind of had a plan of action. Granted, for like a minute, a few minutes, it was a little nerve wracking because it was sort of unchartered territory,” she said.

But the title insurance companies had some plans, she added. For example, “each title insurance underwriter was and is imposing its own restrictions and demands. So some of them are like affidavits and indemnity agreements in order to close. But now, this past Monday, the county has let everybody in … and they’re doing it the old fashioned way.”

“Thankfully we’re fine and things are moving ahead,” she said. “It’s important for everybody to understand also, it’s not like the data or the information is lost. They still have all of the data.”

Nicholas Planamento, a real estate broker at Town and Country, said some closings were postponed. He added that he’d argue the cyber attack has been “catastrophic,” especially with people’s private information at risk.

“You think that you can go record a dying easily. But you can’t. And we don’t use paper, we’re an electronic society. It’s just very perplexing that there isn’t security in place,” he said.

But, he added, he isn’t overly concerned. “I think that at some point in the near future, if not already, the county is going to get their act together so people should still continue with their regular habits,” he said shortly after systems were restored.

“I mean, obviously, you should be diligent about your own security issues and protect your passwords and whatnot,” he said. “It is a lesson for all of us to be reminded of, on a personal level. But I do think that people should still, without a doubt, pursue their dream of home ownership.”

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