California’s Department of Real Estate (DRE) is urging consumers to be vigilant against a range of real estate and mortgage-related crimes that are prevalent in the state. With California’s high property values and an active real estate market, the DRE warns that both buyers and homeowners are at risk from various fraudulent schemes.
According to the DRE, “Many of these crimes prey on the complex nature of the home-buying process, making them difficult for the average consumer to recognize. Below are the most common crimes that could present a threat to California consumers, along with tips for avoidance. It is important to note that even well-meaning individuals who are unaware of the full consequences may find themselves facing legal scrutiny if they participate in or enable fraudulent activity.”
The agency outlines several common types of fraud:
Mortgage fraud involves misrepresenting financial details—such as income or assets—to qualify for loans. This can lead not only to personal financial trouble but also harms lenders and destabilizes the housing market.
Business Email Compromise (BEC) targets real estate transactions by using hacked email accounts to trick buyers into sending funds to fraudulent accounts. High-value transactions in California make this form of cybercrime especially lucrative for perpetrators.
Deed and title fraud occurs when scammers forge documents or use false identities to transfer property ownership without the true owner’s knowledge, sometimes resulting in illegal sales or loans taken out against those properties.
Foreclosure rescue scams target homeowners in distress by promising assistance but instead collecting fees without providing meaningful help.
Property flipping fraud includes purchasing distressed homes, performing minimal repairs—or none—and reselling at inflated prices. Sometimes appraisals are manipulated as part of this scheme.
Equity skimming sees fraudsters convincing struggling homeowners to transfer their property under promises of help, only for the scammer to collect payments while neglecting mortgage obligations.
Straw buyer schemes use unsuspecting individuals as fronts for purchases, often hiding a true buyer who would not otherwise qualify due to credit issues; these straw buyers can face serious financial repercussions if payments aren’t made.
Mortgage elimination scams falsely promise homeowners they can erase their debt through non-existent legal loopholes—for substantial upfront fees.
Elder financial exploitation remains a concern, with older adults targeted by scammers seeking valuable properties through deception or undue influence.
The DRE advises consumers: “California’s real estate market presents a number of risks to consumers, but with due diligence, research, and professional assistance, you can protect yourself from falling victim to these common frauds. Always trust your instincts and seek advice from trusted professionals before making any major financial decisions. If you believe you have been a victim of a mortgage crime or have a concern or complaint about a real estate salesperson or broker, you can file a complaint with DRE.”
The department encourages anyone suspecting fraudulent activity within California’s real estate sector to report concerns directly so investigations can proceed.
