Real Estate Fraud Unit

The dream of home ownership remains one of the most important goals for many citizens in Riverside. Owning one's home or business is a source of pride and security, and provides an opportunity for financial growth.

Unfortunately, real estate fraud scams can steal these dreams with a single forged signature or get-rich-quick scheme. This type of crime can have a serious impact on its victims. As a result, the District Attorney’s Real Estate Fraud Unit is dedicated to prosecuting fraudulent real estate transactions.

Real Property Crimes

Real property crime can take many forms, but most often involves grand theft, forgery, and a relatively recent scheme, identity theft. Below are samples of the types of cases we investigate and prosecute:

• Fraudulent real estate investment schemes, typically involving the sale of trust deeds
• Use of forged escrow instructions to steal escrow deposits
• Purchasing homes with straw buyers
• Forgery of grant deeds or other recorded documents
• Real Estate Identity Theft. By assuming the identity of the true owner, or claiming to represent the true owner, the thief fraudulently obtains title to a property, then borrows against the property, or sells the property, stealing the equity. The typical target of such a scheme is a property with a large amount of equity, most likely an elderly owner
• Fraudulent schemes involving trusts where owners are told to deed their property to a trust which will make the mortgage payments until the owner recovers financially. However, the reality is that the scammers steal the equity and get loans with even larger payments so the original homeowner never stands a chance to get his or her property back

Foreclosure Fraud

With foreclosures on the rise, criminals are taking advantage of struggling homeowners by committing fraud. Many appear to be legitimate consultants or brokers, but their schemes are aimed at stealing your money or property. If you believe that you've been a victim of a criminal foreclosure consultant or other real estate fraud, follow the directions at the end of this section to submit a complaint form.

Although this office cannot legally represent individuals in civil matters, help cancel any debt due on a signed contract, resolve or mediate individual contractual complaints, or obtain any other personal relief, we will pursue these criminals and prosecute them as the law allows.

Foreclosure Rescue Scams

The predominant foreclosure "rescue" scams generally come in three varieties:

Title Transfer

The most dangerous scheme is the "bailout" that never quite works. This scenario includes various schemes in which the homeowner surrenders title to the house in the belief that within the deal, they'll be able to remain in the home as a renter, and eventually buy it back. Homeowners are sometimes told that surrendering title is necessary so that someone with a better credit rating can secure new financing to prevent the loss of the home. But the terms of these deals are almost invariably so onerous that the buyback becomes impossible, the homeowner loses possession permanently, and the "rescuers" end up with all or most of the home's equity, often evicting the original homeowner. Another scam convinces the homeowner to transfer title to a "federal land grant" with the false promise that this prevents the lender from foreclosing.

Bait And Switch

In the bait-and-switch scheme, the homeowner does not realize they are surrendering ownership of the house in exchange for a "rescue." Many homeowners later insist that they believed they were only signing documents for a new loan to make the mortgage current. This also results in the homeowner losing their home.

Phantom Help

The third scheme could be called "phantom help" since the "rescuer" charges outrageous fees, either for light-duty phone calls and paperwork the homeowner could have easily performed, or on a promise of more robust representation that never materializes. In either event the homeowner is usually left without enough assistance to actually save the home but with little or no time left to prevent this grievous loss by the time it's realized. The "rescuer" essentially abandons the homeowner to a fate that might have been prevented with better intervention.

Protect Yourself from Foreclosure Fraud

• DO NOT sign a quitclaim deed or any other document that transfers the property to another person or trust without first consulting an independent attorney.
• Never sign a contract or other documents under pressure. Seek help, from an attorney, social services agency, legal aid or someone you trust to review any foreclosure-related paperwork. Be especially wary of offers to take over ownership of your home as part of a deal that allows you to rent your home and then buy it back after a few years.
• Never make verbal agreements. Never sign blank pages where information can be added later. Never sign anything you do not understand.
• Avoid doing business with individuals or companies that call themselves mortgage consultants, foreclosure services or similar without thoroughly checking their credentials. Be sure to ask for references from licensing agencies, or check with the Better Business Bureau and trade groups.
• Recommendations from family, friends, coworkers and others you trust are also a good resource. A legitimate mortgage consultant can help find the best loan and help with an unfavorable loan.
• Be aware of promises like "We'll save your credit," "We'll pay the closing costs," "We'll buy your house 'as-is'," or "If you sign the house over to us the foreclosure will be recorded against us," among a host of other come-ons.
• Be extremely cautious of those who contact or advertise to people whose homes are listed for foreclosure, including anyone who sends flyers or solicits door-to-door.

Loan Modification Fraud

Many offers to rescue a home from foreclosure, which often promise to also save the homeowner’s credit, are deceptive, fraudulent or illegal. Homeowners should be especially vigilant of people who seek money by cash, check or credit card in advance of performing services, such as loan modifications. Only the actual lender may agree to a loan modification after the homeowner directly applies to that lender for the modification. Promises or guarantees of loan modifications should be viewed as highly suspicious, as the decision of whether or not to modify a loan remains exclusively with the lender.

Once a Notice of Default has been recorded, it is illegal for anyone who meets the definition of a “foreclosure consultant” (which includes licensed agents and brokers) to collect fees in advance of performing these services for people who live in their own homes. (Civil Code §2945.1).

Distressed homeowners should talk to their lender directly about alternatives to foreclosure, including loan modification and new government-sponsored refinancing programs. Free resources are available to help avoid foreclosure, including the following:

• Department of Housing and Urban Development (HUD) Guide to Avoiding Foreclosure —www.hud.gov/foreclosure or https://www.hud.gov/espanol
• Information about the Federal Government’s programs to prevent foreclosure — www.makinghomeaffordable.gov
• Homeowner’s HOPE Hotline — 888-995-HOPE (4673) 24 hours/day; multiple languages or www.995hope.org
• State of California Consumer Home Mortgage Information — www.calhfa.ca.gov/ 

How to Report Suspected Real Estate Fraud

The Riverside County District Attorney’s Real Estate Fraud Unit will review for investigation real estate fraud related cases occurring in our County. The types of cases which will be considered for investigation by the Real Estate Fraud Unit are frauds that result from various fraudulent real estate transactions and/or schemes such as: submission of forged loan applications; fraudulent transfers of title of real property; recordation of fraudulent real estate documents; home equity sale contract fraud; and mortgage foreclosure consultant fraud.

When we receive a consumer complaint, we review all the information and the supporting documentation that is included. Note that we are ethically able to file charges only where we can prove all elements of a criminal offense, usually including specific intent to commit theft, beyond a reasonable doubt to twelve unanimous jurors in a court of law. This is appropriately an incredibly high burden for the prosecution and many cases do not meet this burden, which prevents us from proceeding.

If the complaint does not meet our criteria to open a case, we will do our best to refer you to an agency that will appropriately handle the type of matter involved. Many real estate consumer disputes are not appropriate for government action but are altogether proper for private legal action. It is generally a good idea to consult with private counsel to explore private legal remedies that might be available.

This office is not legally permitted to represent individuals in civil matters, help cancel any debt due on a contract that was signed, resolve or mediate individual contractual complaints, or obtain any other personal relief.

How You Can Help Us Help You?

A. Write or type a summary of your complaint and attach the summary to the complaint form. We cannot review your complaint without a complete concise statement of the facts. At a minimum, please include the following information in your statement:

• Tell us what happened in chronological detail and be specific. You should tag as exhibits any supporting documents and refer to those exhibits in your narrative (i.e., “We found a deed that I did not sign at the County Recorder. See Exhibit A.”)
• Tell us who you think the person(s) or company that is responsible for the loss, conversion(s) or fraudulent act – and why you conclude that.
• Tell us where (address, city and state) the incident, conversions or act(s) took place. Please include property address(es) involved in the fraudulent transaction(s).
• Tell us when and how you first became aware that you may have been defrauded. If individual(s) or a company is named in your complaint, please list exact dates of contact. If someone else made you aware of the potential crime, please include the person’s name(s), address(es) and telephone number(s).
• Tell how you know the representations were false or how you know money was misused.
• Tell us what your actual financial loss is, if known, and how you arrived at that figure. Do not include lost interest, unrealized profits or missed opportunities.

B. Documentary evidence is especially important; therefore, please include>photocopies of all documents and materials (contracts, agreements, certificates, notes, deeds, correspondences, legible copies of involved checks, front and back, escrow and/or loan documents, etc.) you wish us to review. Please retain the originals for your records.

Other helpful links:

Federal Trade Commission (The section for real estate specifically is located under the “consumer protection” > “consumer information” tabs and found in the credit and loans category) www.ftc.gov/index.shtml
California Department of Real Estate www.dre.ca.gov 
Financial Fraud Enforcement Task Force https://www.fincen.gov/financial-fraud-enforcement-task-force-ffetf