Walt Stewart
Real Estate Fraud

Living and working in California is a wonderful thing, most of the time. The times that are not so great are when a client comes in and reports that they have been swindled or misled in a real estate scam.

There are thousands of transactions that go on daily in California. Many are legitimate, but many others are outright fraud. Other actions are driven by greed when taking advantage of homeowners, or people who want to become homeowners, investors, venture capitalists, and lenders, and end up being victims. We have people approach us who state that real estate salespersons and brokers have approached them with get-rich-quick schemes. If they have good credit, the salesperson and broker tell them they can get them approved for a home loan with a little creative paperwork manipulation and fraudulent statements about their income. They tell the victims that they can then sell the house in a few months and make several thousand dollars for the deal. Then they can go on to buy and sell another house, and another, etc.

Some clients are stuck with six to seven houses that cannot be rented out and are foreclosed on. The clients are stuck and the salesperson and broker have already received their commissions and have moved on to the next "sucker," while the clients only received a few thousand dollars for their efforts. Their credit is ruined and they are broke and can't even afford to hire someone to represent them to recover their losses.

Other schemes are for investors and funding institutions where real estate salespersons and brokers solicit homeowners for second and third trust deeds. The real estate representatives sell the same property to several individuals while filing the trust deeds at the courthouse with only one individual's (investor's) name. They offer the other investors copies of the filed paper with their names cut and pasted on these fraudulent documents.

Many of these alleged salespersons do not have licenses, but work for unscrupulous brokers who condone their activity. When the deal goes sideways and someone finds out, they pay them 10 cents on the dollar for their losses just to shut them up and to avoid court. We see many people repeatedly exposed for this scheme taken to court, but they are back at it again to make up their losses.

Others are soliciting persons who already have mortgages and wish to refinance. Subjects want a lower rate and monthly payment, along with some extra money for credit card debt or home improvements. The real estate individuals sell them a loan that ends up costing more per month. Sometimes the loan has a balloon payment at the end of the contract that cannot be made, causing the house to go into foreclosure, thus making it possible for the real estate people to steal their home.

When homeowners eventually see this on their complex paperwork, they have only three days from signing to cancel. They call, but everyone is busy and no one returns their call. The three days pass and they finally get a hold of the real estate people, who inform them that their loan has been sold to another company and they no longer have anything to do with it.

What we are passing on to you is that if you do any real estate transactions, be sure to retain someone in real estate who is looking out for your interest. If you aren't sure, you can call us and have them checked out first. But, if you find out too late that they aren't legitimate and you get cheated, call us for an investigation into the matter. The first consultation is always free.

Walt Stewart - Owner (Lic #23162)
31726 Rancho Viejo Road, Ste. 106
San Juan Capistrano, CA 92675
Office: (949) 489-7758
Fax (949) 487-4097
Pager (800) 504-1284
wsi@wsinvestigations.com
www.wsivestigations.com

(South Coast Magazine - Spring 2007)