Real Estate Fraud

At the Merced District Attorney's Office we recognize that home ownership is a "dream come true" for most people here in Merced County. While owning your own home provides a sense of pride and security, it also provides the opportunity for scammers to attempt to steal that dream through real estate scams and fraud.

The Merced District Attorney's Fraud Unit is committed to providing you with the necessary information to help you identify real estate fraud and eliminate it.

Downloadable / printable reporting forms:

Red Flags to Look Out for During a Real Estate Transaction

  • You are asked to pay in cash.
  • You are asked to pay for something "on the side," "outside of escrow," or "after closing."
  • You are asked to pay a real estate agent directly or are asked to pay upfront fees.
  • You are dealing with unlicensed agents or unlicensed brokerage companies.
  • You are offered a "forensic loan audit."
  • You are dealing with "attorney-backed" businesses or law offices that refuse to provide an attorney's name of State Bar number.
  • You come across programs and companies that claim to represent Federal or State agencies or programs.
  • You are given a sales pitch with logical holes, lack of details, or assumptions.
  • You meet with salespeople who fail to discuss possible risks, along with possible rewards. All investments carry a risk.
  • You are asked to lend personal funds to an investment plan secured only by a personal note, or otherwise unsecured.
  • You encounter lack of an actual business, unwillingness to meet in an actual office, or refusal to meet in person.
  • You are not provided with required State and Federal disclosures early in the real estate transaction.
  • You are asked to transfer the title
  • You are encouraged to make payments to someone other than your server.

Common Types of Scams

If you are falling behind on your mortgage, others may know it and use that information to try and scam you out of your home and your money. According to the Consumer Advisory, issued by the Office of the Comptroller of the Currency, these are some popular scams that con artists use:

Foreclosure "Rescue" & Refinance Fraud

The scam artist offers to be the middle man between you and your lender to negotiate a payment plan and may even "guarantee" to save your home from foreclosure. They may tell you to make mortgage payments directly to them and that they forward the payments to your lender. THIS IS A RED FLAG. The reality is that they will most likely pocket your money and leave you in a worse position with your lender.

Fake "Government" Modification Programs 

Scammers may claim to be affiliated with, or approved by, the government, or may ask you to pay high up-front fees to qualify for government mortgage modification programs. These scammers will set up websites that use similar language to legitimate government websites in another attempt to try and fool you. While there are many legitimate government-supported mortgage modification programs, you do not have to pay to benefit from them. THIS IS A RED FLAG. If you are interested in seeing if you qualify, speak to your lender and they can help you with the process.

Leaseback/Rent-to-Buy Schemes

In this type of scam you are asked to transfer the title of your home to the scammer, who will then supposedly get better financing and/or allow you to remain in the home as a renter and eventually buy the home back. THIS IS A RED FLAG. If you do not comply with the terms of the rent-to-buy agreement, you will lose your money and face eviction. In most cases, the scammers have no intention on of selling the home back to you, they just want your home and your money. Remember- transferring the title of your home does not change your payment obligations. You will still owe your mortgage debt, you just wont own the house you are paying on.

Bankruptcy Scams

Filing bankruptcy can stop a foreclosure, but only temporarily. Filing bankruptcy brings an "automatic stay" into effect that stops any collection and foreclosure while bankruptcy court administers the case. Eventually, you must start paying the mortgage lender, or the lender will be able to foreclose. Bankruptcy is not a way to permanently prevent foreclosure and also negatively affects your credit score for up to 10 years.

Debt-Elimination Schemes

Scammers may claim to be able to "eliminate" your debt by making illegitimate legal arguments that you are not obligated to pay your mortgage. They will claim to know "secret laws" that can be used to eliminate debt. THIS IS A RED FLAG. Do not stop making your payments on your mortgage.

Always remember: If it seems too good to be true, it probably is.

If You Are a Victim of Real Estate Fraud

  • Document the Incident; prepare a chronology of events that led up to the fraud, including the names and telephone numbers of everyone you dealt with.
  • Obtain certified copies of all deeds relating to the transaction. Deeds can be obtained from the Merced County Assessor's Office.
  • Collect copies of all real estate documents. That includes escrow documents, real estate contracts, and loan documents. Maintain original documents for your records and provide copies when needed.
  • Contact a civil attorney. Make sure that it is someone who is knowledgeable in real estate law. Issues contesting ownership of property typically involve the filing of a quiet title lawsuit, which enables an attorney to protect your property interest. 

Real Estate Fraud Resources

Merced County District Attorney
Bureau of Investigations: Real Estate Fraud Unit
550 W. Main Street, Merced CA 95340

(209) 385-7381