California’s Department of Real Estate (DRE) is warning residents about a range of real estate and mortgage crimes that are prevalent in the state’s high-value property market. The agency highlights that California’s active real estate sector makes it especially vulnerable to fraud schemes targeting both buyers and homeowners.
According to the DRE, many of these crimes exploit the complicated nature of buying a home, making them difficult for consumers to spot. The department notes that even individuals who do not intend harm may face legal consequences if they participate in or enable fraudulent activities.
Mortgage fraud remains a significant concern. This type of crime typically involves falsifying financial information, such as inflating income or misrepresenting assets, to qualify for loans that borrowers cannot afford. The DRE warns that such actions can result in financial distress for borrowers and broader instability within the housing market.
Another risk is business email compromise (BEC), where criminals hack into email accounts belonging to real estate professionals or escrow officers. These hackers impersonate trusted parties and trick homebuyers into transferring large sums to fraudulent accounts. The prevalence of technology-driven transactions in California increases susceptibility to this kind of fraud.
Deed and title fraud are also on the rise, particularly in densely populated areas. Scammers forge documents and use false identities to transfer property ownership without the owner’s knowledge, sometimes selling the property or securing loans against it before victims become aware.
Foreclosure rescue scams target homeowners facing financial hardship. Fraudsters pose as experts promising help but ultimately collect fees without delivering assistance.
Property flipping fraud involves purchasing distressed properties, making little or no repairs, and reselling them at inflated prices. In some cases, appraisals are manipulated to deceive buyers about true property values.
Equity skimming occurs when a homeowner is persuaded to transfer ownership under false promises that their home will be saved from foreclosure. Instead, scammers collect payments but fail to pay off existing mortgages.
Straw buyer schemes involve using another person—often unknowingly—to purchase a home on behalf of someone else who may not qualify for a loan. This exposes the straw buyer to potential foreclosure and credit problems.
Mortgage elimination scams promise homeowners relief from mortgage debt through supposed legal loopholes in exchange for high fees; however, these offers are entirely fraudulent as no such loophole exists.
Elder financial exploitation is another area of concern. Scammers target older adults with valuable properties by gaining their trust and convincing them to sell or transfer their homes under suspicious circumstances.
“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,” said the DRE in its statement. “Always trust your instincts and seek advice from trusted professionals before making any major financial decisions.”
The DRE encourages anyone who believes they have been affected by real estate or mortgage crime—or has concerns about licensed salespeople or brokers—to file a complaint with the department.
