California’s Department of Real Estate (DRE) has issued a warning to consumers about the increasing risk of real estate and mortgage-related crimes in the state. Officials say that California’s high property values and active real estate market make it a prime target for various types of fraud.
According to DRE, many of these crimes exploit the complex nature of home-buying, making them difficult for consumers to detect. The department highlighted several common schemes currently affecting Californians.
Mortgage fraud is one area of concern. It typically involves falsifying financial information—such as inflating income or misrepresenting assets—to qualify for loans that borrowers cannot afford. This not only puts individual borrowers at risk but also harms lenders and contributes to instability in the housing market.
Another scheme on the rise is business email compromise (BEC). Criminals hack into email accounts belonging to real estate professionals or escrow officers, then impersonate them to trick buyers into transferring large sums to fraudulent accounts. The prevalence of technology in California’s real estate transactions increases vulnerability to this type of scam.
Deed and title fraud have also become more common, especially in densely populated areas. Scammers forge documents and use false identities to transfer property ownership without the owner’s knowledge. Once they gain control, they may sell the property or take out loans against it.
Foreclosure rescue scams target homeowners facing financial trouble by offering bogus services in exchange for upfront fees, while providing no actual help. Property flipping fraud involves purchasing distressed properties, making minimal repairs, and reselling them at inflated prices—sometimes with manipulated appraisals.
Equity skimming occurs when fraudsters convince struggling homeowners to transfer their property under promises of saving their home; instead, scammers collect rent or mortgage payments without paying off the original loan.
Straw buyer schemes involve recruiting someone with good credit to buy a home on behalf of another person who might not qualify for a loan. The straw buyer can end up liable for loans they cannot repay.
Mortgage elimination scams falsely promise homeowners that their debt can be erased through nonexistent legal loopholes—for a fee.
Elder financial exploitation remains an ongoing problem as well, with scammers targeting older adults who own valuable homes and persuading them into suspicious sales or transfers.
The DRE urges all Californians: “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 emphasizes diligence, research, and consulting qualified professionals as key ways consumers can protect themselves from these risks.
