"In California, the land is what's valuable. The house is just how you monetize it," a real estate developer toldBloomberg. California's real estate recovery is good news for qualified homebuyers but it also lays the groundwork for fraud.
How is California's real estate market doing?
Coastal land is in high demand. Estimates suggest that plots in San Jose and San Diego County will become unavailable for development in about a year. The Orange County Register echoes the optimism for an ongoing California housing market recovery. The publication cites home sale prices that reached a four-year high in July as well as four months of increased sales activity. Median single-family home prices increased to $333,860, which is getting close to the August 2008 record sales price of $352,730.
What is an indicator that real estate fraud is on the rise as the California housing market recovers?
The California Department of Real Estate (DRE) issued a news release, alerting consumers that it has revoked a "record number of real estate licenses" in the fiscal year that ended in June. A total of 1,109 licenses were "suspended, surrendered and revoked." License revocations are up by about 14 percent, when compared to last year's figures, while suspensions are up by 80 percent. The agency points to the large number of financially distressed homeowners as being primary targets of scam artists.
Who are common targets of those perpetrating real estate fraud in the Golden State?
The DRE warns that Hispanic homeowners are a group targeted by Spanish-speaking criminals. Common scams involve loan modification assistance, home loan audits and foreclosure relief schemes. Relying on the "culture of trust within the Latino community," criminals promise to file lawsuits or bankruptcy documents that supposedly result in a home owned free and clear. Remuneration for this type of service is usually set at $10,000. The Marin Independent Journal warns that another group targets homeowners who recently refinanced their loans. Official-looking letters demand payment of $89 for a copy of the property deed. These letters are not sent out by any government agency and the homeowners do not owe the money.
What are the potential dangers associated with the currently ongoing scams?
The Santa Clara County District Attorney's Office has produced a YouTube video warning of real estate frauds involving street signs that offer to "sell your house in nine days" or to pay cash for "houses in any condition." Those involved may be real estate agents who put up the signs to get new businesses, even though this particular practice is against the law. Calling the numbers may also lead to consumers making contact with a variety of con artists, including perpetrators of identity theft and robbery.
Sylvia Cochran is a Los Angeles area resident with a firm finger on the pulse of California politics. Talk radio junkie, community volunteer and politically independent, she scrutinizes the good and the bad from both sides of the political aisle.
- Real Estate
- Financial Fraud Prevention
- real estate developer
- real estate