Victim 's Guide To Real Estate Fraud - Los Angeles County

What To DoIf you believe you are a victim of real estate fraud, pleasecontact your local Sheriff Station, Police Station or DistrictAttorney’s Office. Prepare a written explanation of whatoccurred. Your explanation should include:1. A brief overview of the events that took place.2. The names, addresses and telephone numbers of thepeople and companies involved.3. Copies of all documents you signed or that were given toyou, including grant deeds, quitclaim deeds, trust deeds,reconveyance, assignment of deeds, notes, contracts,agreements, escrow instructions and statements.4. Copies of cancelled checks, or money orders (both frontand back) that you gave in payment or that were given toyou as payments.5. Please print your name, address and a daytime phonenumber.Send your complaints to:Los Angeles County Sheriff’s DepartmentFraud Detail/Real Estate Fraud Unit11515 S. Colima Road, M-104Whittier, CA 90604Los Angeles County District AttorneyBureau of InvestigationReal Estate Fraud Unit201 N. Figueroa Street, 16 th FloorLos Angeles, CA 90012Agencies & Organizations That Provide HelpCalifornia Department of Real Estate320 W. 4 th Street, Suite 350Los Angeles, CA 90013(213) 897-3399The Department of Real Estate licenses, regulates andinvestigates complaints about real estate brokers,salespersons and some mortgage brokers and escrows.California Association of Realtors525 S. Virgil AvenueLos Angeles, CA 90020(213) 739-8200The Association has listings for local Realtor associationsthroughout the Los Angeles County area.Los Angeles County Bar AssociationP.O. Box 55020Los Angeles, CA 90055(213) 243-1525The Bar Association can help consumers find lawyers thatdeal specifically with real estate cases.Department of CorporationsFinancial Services Division320 W. 4 th Street, Suite 750Los Angeles, CA 90013(213) 576-7500DOC regulates some escrow companies and the sale ofsecurities, such as fractionalized deeds of trust and verifiesthe licenses of mortgage bankers.Department of InsuranceUnderwriting Services Bureau300 S. Spring StreetLos Angeles, CA 90013(800) 927-4357(213) 897-8921The Department of Insurance regulates title insurancecompanies and examines complaints about the insurancebusiness. If you have a complaint involving title to property,you may first file a claim with your title insurer.Contractor’s State license BoardP.O. Box 5000Buena Park, CA 90622-5000(800) 321-2752(714) 736-3021The Contractor’s State License Board investigatescomplaints involving contractors and mechanics liens.Los Angeles County Department of Consumer AffairsKenneth Hahn Hall of Administration500 W. Temple Street, Room B96Los Angeles, CA 90012(800) 973-3370The Department of Consumer Affairs can assist withcomplaints of real estate fraud, rental fraud and otherconsumer issues.Bet Tzedek Legal Services145 S. Fairfax Avenue, Suite 200Las Angeles, CA 90036(323) 939-0506 Commercial Crimes BureauLegal Aid Foundation of L.A.1102 Crenshaw BoulevardLos Angeles, CA 90019(213) 801-7989Real Estate Fraud Unit11515 S. Colima Road M-104Whittier, CA 90604PHONE: (562) 946-7217FAX: (562) 944-8741

Real Property CrimesScam artists operate profitably in the complex worldof real estate sales and loans. Criminals use falserepresentations, fine print and obscure procedures tosteal the equity in your home or to commit loan fraud.Theft by false representations is a crime! If youbelieve that you have been the victim of real propertyfraud, law enforcement wants to know. The LosAngeles County Sheriff’s Department will investigatecomplaints of real estate fraud. If there is sufficientevidence to prove that a crime was committed, theLos Angeles County District Attorney will prosecutethe offender. Here are a few of the more prevalenttypes of crimes being perpetrated in Los AngelesCounty.The plan is usually for the homeowner to deed his orher house to the “bailout” specialist for a fee ofbetween $1,000 and $2,500. The “bailout” specialistthen either rents out the house or lets the now formerhomeowner liver there for a modest rent. The “bailout”specialist does not arrange for the short sale and failsto make the payments on the mortgage, resulting inthe foreclosure and eviction of the tenants.The “bailout” specialist pockets the advance fee andall rental payments. On the surface it appearsperfectly legal. A careful reading of the small print onthe documents given to the victim may revealwarnings that his or her credit may suffer and that the“bailout” specialist is not bound to successfullyprocure a “short sale” or to reconvey the property.Some crooks are so bold that they will rent a piece ofproperty to several different tenants, collectingadvance rents and deposits and then vanish. In acreative twist to this fraud some scammers claim thatthey hold legal title to the property under the old lawof “adverse possession”.Be alert for possible rental fraud when utilities areheld in the name of a third person, or when thelandlord insists that the rent be collected in personwithout a receipt. Also be wary if legal notices aremailed or posted on the property and the landlord tellsyou simply to ignore them.Home Equity TheftsToo often it turns out that the home improvementcontract has “eaten up” all of the equity in the home.The homeowner learns that he has signed highinterest mortgages with enormous loan fees. Thehomeowner may be faced with loan payments hecannot afford. “Attractive” loan payments cover theinterest only. The principal is due in one “balloon”payment after a few years. When the “balloon”payment is due, the homeowner must take outanother loan, paying additional fees and costs or risklosing his or her home through foreclosure.Criminals may commit an outright forgery to gaincontrol of loan proceeds contained in a homeimprovement contract, home sale or refinance.Foreclosure Bailout ScamVictims are lured by thepremise of help for thosewho are “upside-down” andowe more on their homethan it is worth. Thesehomeowners are usuallydesperate and must eithersell their home at a large loss or let the lenderforeclose, severely damaging their credit. Often these“bailout” specialists target non-English speakingvictims.The “bailout” specialist tells the homeowner thatbanks prefer to take a loss on a loan rather than takethe home back on a foreclosure and if the loan isinsured by FHA, the bank is spared the headache ofreselling the home. The homeowner is told he isbeing offered an opportunity to arrange for a “shortsale” of the house that will have no effect on his orher credit rating.Rental FraudRental fraud scams involve therental of homes that the con artistdoes not own. The con artist locatesa vacant or abandoned house. Itmay be in foreclosure or perhaps avacation home not in use. The conartist enters the house, changes thelocks and advertises the property forrent, usually well below the market rental rate. Anunsuspecting tenant pays a security deposit alongwith first and last month’s rent and moves in. Rent iscollected and pocketed by the rental fraudperpetrator. The true owner and lender do not receivea dime. When the fraud is discovered the tenant isevicted, losing his security and rental deposits.People who have built up equity intheir homes are ripe targets for avariety of confidence games. Highpressure home improvementcontractors offer elderlyhomeowners unnecessary andoverpriced home improvement on“easy” credit. Slick salesmen mayoffer to refinance the home at “:attractive” interestrates to provide cash to the home owner and to payoff bills.Victims report that they were asked to sign blankcontracts, that they were not allowed to read thecontracts before signing or that they were not givencopies of the contracts. Only later does the victimrealize that the contract contains terms completelydifferent than what were promised.Straw Buyer ScamsScam artists find ways tocash out equity of realproperty entrusted to themusing “creative financing”.They may employ phony“straw buyers”, crookedescrow agents, real estateappraisers or notarypublics. The scam artistasks the “straw buyer” to sign loan papers using hisor her good credit. The scam artist pockets the loanproceeds and fails to make the loan payments. Thestraw buyer may have committed both state andfederal crimes. His or her credit is ruined and he isobligated to pay the loan amount.Your best protection is to NEVER submit to pressureand to ALWAYS insist on getting financial or legaladvice before you commit to a contract or loan.Remember you have a three day “cooling off” periodin which to cancel a loan or contract. Use the time tothink about the consequences of such a loan orcontract.