The office of the Santa Clara County District Attorney is proactive in investigating and prosecuting real estate related fraud activities. Speaking to members of the Silicon Valley Association of REALTORS® early this month, assistant district attorney Charles Huang called on REALTORS® and their clients to report any suspicious activity directly to the district attorney's real estate fraud unit.
The county's real estate fraud unit has expanded its workforce and now has three prosecutors (compared with just two in 2005-2006), 1.5 paralegals, five to seven investigators and one coordinator. As a result, between 2014 and 2015, the unit investigated 142 cases amounting to $97.6 million in losses, compared with 68 cases in 2005-2006 and $14.5 million losses.
Huang said it is the job of the unit to investigate and prosecute real estate-related fraud activities and conduct outreach to the public so they are aware of the scams. Roundtable discussions with real estate professionals aid the unit since real estate professionals can warn their clients of recent scams.
The prevalence of certain types of real estate fraud depends on the economy, said Huang. During the recession, when thousands of homes were underwater, foreclosure and mortgage loan modification scams were prevalent. These days, these scams still occur, but because of the tight housing inventory, there has been a rise in rental scams. Other commonly prosecuted activities are mortgage fraud, forgery/false documents, theft/embezzlement, investment schemes, identity theft and unlicensed activity.
Huang said Senate Bill 94, which became effective on October 11, 2009, prohibits anyone, including attorneys and real estate agents, from collecting advance fees for loan modification services for any reason, even if services are broken down in component parts. Penalties for violation of the law can range from a misdemeanor to a fine of $10,000 for individuals or $50,000 for corporations.
The assistant district attorney gave examples of scams occurring in the county. He related one case in which a person renting a property submitted bogus checks for the security deposit and first month's rent. By the time the landlord found out the checks were fake, it was too late and the person had already moved into the home. Huang noted it can take as long as six months to get someone evicted from a property.
Victims of real estate fraud are all types, from the very educated, the young college graduate, to seniors. Huang noted while victims have received restitution, it is not the same as getting back all the money lost, so the best thing is not be a victim of fraud.
Huang cautioned against completing contest forms online, ads of rentals on Craigslist and fraudulent websites. If you see or hear of any suspicious activity, call the real estate fraud hotline at (408) 792-2879.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.