Stay Alert! Real Estate Fraud is REAL!

DON'T FALL FOR A TRAP!

Don't Lose Your Home!

Real estate and mortgage fraud are on the rise 📈—and California’s highly competitive housing market is especially vulnerable. With soaring property values and intense buyer demand, fraudsters are finding new ways to exploit both individuals and institutions.

These deceptive practices can result in serious financial losses for homebuyers, investors, real estate professionals, and lenders alike. Worse yet, they can destabilize entire communities by undermining trust in the housing market.

To protect yourself and your family from becoming victims of mortgage fraud, it’s essential to stay informed and vigilant. Real estate agents, mortgage loan officers, and prospective buyers should all be aware of the most common fraud schemes and red flags. Knowledge is your first line of defense!

Some Key Fraud Types and Schemes

• Equity Skimming

• Straw buyer scams

• Appraisal inflation / Property Flipping Fraud

• Deed & Title Fraud (Elder Financial Exploitation)***

There are many, many more. These are very popular and fraudsters are having great success using them. Let's dive in and learn how you can stay alert to some of them.

Equity Skimming

Equity skimming occurs when a fraudster convinces homeowners who are struggling with payments to transfer ownership of their property, often with the promise of saving their home. Instead, the fraudster collects rent or mortgage payments from the homeowner and never pays off the original mortgage.

Tips for Avoiding Equity Skimming:

• Never sign over the title of your home to anyone claiming they can help you avoid foreclosure.

• Work only with reputable lenders, real estate agents, and housing counselors who don’t ask for ownership rights or power of attorney.

• Read all documents carefully before signing and consult an attorney if anything seems unclear.

• Be cautious of individuals offering to “rescue” you in exchange for quick decisions or immediate transfer of property.

Straw Buyer Schemes

Straw buyer schemes involve an unsuspecting consumer purchasing a home on behalf of someone else, often to hide the identity of the true buyer who may not qualify for the loan due to poor credit or other reasons. This can result in the consumer, aka the straw buyer, being held liable for a loan they can't afford, leading to potential foreclosure, negative impacts to credit, and other risks.

Tips for Avoiding Straw Buyer Schemes:

• Always verify the identity and financial standing of anyone you are dealing with in a real estate transaction.

• Never agree to buy property on behalf of someone else without understanding the full risks and consequences.

• Make sure all mortgage and loan paperwork reflects accurate information and fully discloses the true buyer.

• Work with a reputable lender that follows all appropriate verification procedures.

Appraisal Inflation / Property Flipping Fraud

In property flipping fraud, scammers purchase distressed properties, make minimal repairs (or no repairs at all), and then sell the property at a drastically inflated price. They may also manipulate appraisals to deceive the buyer about the true value of the property.

Tips for Avoiding Appraisal Inflation / Property Flipping Fraud

• Always hire a reputable real estate professional or inspector to help evaluate the property and transaction.

• Be skeptical if the price seems too good to be true—especially in markets where home prices are generally high.

• Ensure the property appraisal is done by an independent third party and not someone with a financial stake in the sale.

• Ask for detailed information about the history of the property’s permits, repairs, and improvements. Many local building departments even provide access to permit history online.

Deed & Title Fraud (Elder Financial Exploitation in Real Estate)***

Scammers often target older adults with high-value properties, taking advantage of their trust to persuade them to sell or transfer their home under suspicious circumstances.

Tips for Avoiding Deed & Title Fraud (Elder Financial Exploitation):

• Always involve trusted family members, friends, or professionals in financial decisions, especially for older adults.

• Be cautious about unsolicited offers, especially those targeting seniors with no prior relationship.

• Avoid signing anything without thoroughly understanding the document—consult with an attorney or financial advisor first

***This last one is the hottest one that fraudsters are having a lot of success with.

This is where your trusted Fiduciary comes in. Fiduciaries help a wide variety of people by managing their financial, legal, or personal affairs with a legal and ethical obligation to act in their best interests.

Vulnerable individuals are protected by guardians and conservators, court-appointed fiduciaries who manage the personal, medical, and financial affairs of minors or adults who are incapacitated and unable to make safe decisions for themselves.

AD Fiduciary has the knowledge and ability to protect your loved ones who fit the vulnerability profile that these fraudsters love to steal from. The stakes are too high not to explore your options. A simple call and all of you questions can be answered.