Real estate can build dreams or, in the wrong hands, destroy them. California’s booming housing market offers tremendous opportunities, but it also attracts scammers targeting homeowners, buyers, and investors.
The California Department of Real Estate (DRE) recently issued a Consumer Alert urging residents to stay alert for real estate and mortgage fraud. At Ambati Properties, we believe informed clients are protected clients. Here’s how to identify and avoid common scams.
Common Real Estate and Mortgage Scams in California
1. Mortgage Fraud
When false information about income, assets, or property use is used to secure a loan.
A Los Angeles buyer was told by a loan officer to “just round up” her income to qualify for a bigger mortgage. She lost her home within a year when she couldn’t keep up with payments.
Protect yourself:
â—Ź Be truthful on all loan applications.
â—Ź Review every document before signing.
â—Ź Ask your lender to explain anything unclear.
2. Business Email Compromise (BEC)
A cybercrime where hackers impersonate real estate professionals to intercept wire transfers.
A San Diego couple received an email from what looked like their escrow officer confirming new wiring instructions. The email was fake, and their $75,000 down payment was stolen.
Protect yourself:
â—Ź Always confirm wire instructions by phone using a verified number.
â—Ź Double-check email addresses for subtle spelling errors.
â—Ź Enable multi-factor authentication on email accounts.
3. Deed and Title Fraud
When scammers forge a deed or title document to transfer ownership of property without consent.
A Sacramento homeowner discovered her house had been “sold” while she was out of the country. A forged deed had been recorded with the county.
Protect yourself:
● Regularly check your county recorder’s records.
â—Ź Sign up for deed or title alerts if offered.
â—Ź Keep copies of all property documents and title insurance.
4. Foreclosure Rescue Scams
Fraudulent services that promise to stop foreclosure in exchange for upfront fees.
A Fresno family paid a “foreclosure specialist” $2,500 to negotiate with their lender. The scammer disappeared, and their foreclosure proceeded.
Protect yourself:
â—Ź Never pay fees upfront.
â—Ź Confirm the program is HUD-approved.
â—Ź Get all promises in writing before agreeing to anything.
5. Property Flipping Fraud
When an investor artificially inflates property value using falsified appraisals or inadequate repairs.
In Riverside, a buyer purchased a “newly renovated” home that quickly developed leaks and foundation cracks. The seller had made cosmetic fixes and falsified the appraisal to double the sale price.
Protect yourself:
â—Ź Hire an independent inspector and appraiser.
â—Ź Review property permit history for unapproved work.
6. Equity Skimming
A scheme where scammers persuade owners to transfer their deed, promising to pay the mortgage but instead pocket the money.
A struggling homeowner in Bakersfield signed over her home “temporarily” to a so-called investor. He rented it out, collected the income, and never made her mortgage payments
Protect yourself:
● Never transfer ownership to “rescuers.”
â—Ź Consult a real estate attorney before signing any deed or power of attorney.
7. Straw Buyer Schemes
When someone uses another person’s credit or identity to buy property.A fraudster in Orange County convinced a friend to use her credit to “help him qualify” for a loan. When he stopped paying, the friend was left responsible for the mortgage.
A fraudster in Orange County convinced a friend to use her credit to “help him qualify” for a loan. When he stopped paying, the friend was left responsible for the mortgage.
Protect yourself:
â—Ź Never misrepresent who the real buyer is.
● Don’t let anyone use your name or credit for a property purchase.
8.Mortgage Elimination Scams
False claims that mortgages can be “legally canceled” through loopholes or secret programs.
A man in San Jose paid $1,200 to join a “mortgage elimination seminar.” He stopped making payments and soon faced foreclosure.
Protect yourself:
â—Ź No legal program can erase a valid mortgage debt.
â—Ź Report such offers to the DRE or the California Attorney General.
9.Elder Financial Exploitation
When fraudsters target older adults to trick them into transferring property or signing deceptive documents.
An 82-year-old homeowner in Long Beach was told she was refinancing to lower her rate. The paperwork she signed actually transferred her property to a scammer
Protect yourself:
â—Ź Involve trusted family or advisors before signing documents.
â—Ź Avoid anyone creating urgency or pressure.
Quick Safety Checklist
Before you buy, sell, or sign:
â—Ź Verify agent and broker licenses on the DRE website.
â—Ź Confirm wire instructions by phone before sending funds.
â—Ź Check county property records for unauthorized activity.
â—Ź Ask questions and take your time. Pressure is always a red flag.
How to Report Suspicious Activity
If you suspect fraud:
â—Ź File a complaint with the California Department of Real Estate (DRE).
● Contact your local district attorney’s real estate fraud unit.
â—Ź Notify your bank or lender immediately.
Ambati Properties’ Commitment to Consumer Protection
As a licensed California real estate brokerage, Ambati Properties is committed to transparency and ethical practices. We help clients verify listings, transactions, and offers to ensure peace of mind before they act.
If you have questions about a real estate opportunity or transaction, reach out to us — we’re happy to review it with you.
info@ambatiproperties.com
Disclaimer
This article summarizes information from the California Department of Real Estate Consumer Alert (November 3, 2025). It is for general informational purposes only and not legal or financial advice. Ambati Properties is not affiliated with the DRE or any government agency. Alwaysconsult a qualified professional for individual guidance.
