Downtown Los Angeles header image
Los Angeles Police Department Badge


Real Estate Fraud


Real estate schemes, scams, and fraud all constitute a form of theft which criminals use to steal your home or real property. Adhering to the principle that a person’s home is their castle, this is possibly the most devastating form of victimization. The Los Angeles Police Department will investigate complaints of real estate fraud and the Los Angeles County District Attorney will prosecute these offenders to the fullest extent of the law.

Real estate fraud can take many forms. The information provided in this circular will hopefully serve as an educational tool to help you become more aware of the various forms of real estate fraud and how you can avoid becoming a victim.

Types of Real Estate Fraud

Con artists may use several methods to swindle you in a real estate fraud scheme. Foreclosure bailout, home equity fraud, home renovation scams, rental fraud, and deceptive timeshare scams, are just a few types of real estate fraud which may be performed. Below is a description of these forms of fraud:

Foreclosure Bailout

Victims of this form of real estate fraud are generally homeowners who have negative equity, also known as being "upside-down" and/or owe more money on their home’s mortgage than the home is worth. They are caught in dire straits due to the need to sell their home, and must do so at a loss or let their mortgage company foreclose on their home. At this point a so called "bailout specialist" will offer the victim the opportunity to arrange for a short sale of their home. In this form of fraud, the homeowner usually will be told that for a fee of $1,000 to $2,500, the homeowner can deed their home to the bailout specialist and then rent it back. The bailout specialist takes the money, does not arrange for the short sale, and does not make any payments on the mortgage. The end results are that the home loan payments are not made and the mortgage goes into foreclosure, without the victim being aware of any fraud. Ultimately, the home is foreclosed upon; the victim is evicted, and loses both his home and the $1,000 to $2,500 fee charged by the so-called specialist.

Home Equity and Home Renovation Fraud

According to the Council of Better Business Bureaus, home-remodeling contractors ranked slightly behind car salespersons and auto mechanics in generating the most consumer complaints. Be very careful when using your home or your home equity as security for a home improvement loan. Fast talking salespersons will offer to refinance your home at a lower interest rate to provide cash to the homeowner, the cash can be used to pay for home improvements or to pay off bills. Victims are frequently asked to sign blank contracts or contracts that they were not allowed to read before signing. Later, the homeowner discovers that they signed a contract that contains terms in contrast to the originally promised terms. This results in the loss of equity in the victims home, and also they have signed a mortgage in which they have incurred considerably higher interest rates. The homeowner is now faced with a higher mortgage payment, one that they may not be able to afford.

Rental Fraud

Frequently, con artists will rent out a home they do not own. They will locate a vacant or abandoned home, enter the home, change the locks, and then advertise the property as available for rent. The unsuspecting victim rents the property from the con artist, who collects a security deposit and rent from the victim, and then disappears. The victim, who rented the property, is then evicted by the lawful owner and subsequently loses their place to live along with the money they paid for the security deposit and rent.

Deceptive Timeshares

Timeshares may offer to sell membership vacation accommodations. Con artists may make oral promises that are omitted from the written contract. They may also fail to mention fees and obligations that are in the written contract, which are never mentioned orally. These misrepresentations will likely be discovered while signing the contract and are downplayed by the salesperson as only "legal jargon". Victims are not told the extent to which the annual maintenance fee will increase over time, they will be forced to pay special assessment fees, or the difficulty to resale a timeshare.

Effects of Fraud

The crime of fraud is a personal violation. Although there is no serious physical injury, many victims of con artists suffer emotional harm by losing the following:

  • Financial security
  • Family home
  • Business
  • Inheritance
  • Retirement savings or children’s educational funds
  • Professional or personal credibility


Victims of fraud come from a variety of racial, religious, socioeconomic, educational backgrounds, age, and gender. Some swindlers deliberately seek out families that may

have limited means or financial difficulties, figuring such persons may be particularly receptive to a proposal that offers fast and large profits. Your first step as a victim should be to report the incident to your local police department. If you believe that you have become the victim of real estate fraud, please contact your local law enforcement agency.

Agencies that may be able to assist you are:

Los Angeles Police Department
Financial Crimes Division
Real Estate Fraud Unit
150 N. Los Angeles Street
Room #302
Los Angeles, CA 90012

Los Angeles County District Attorney
Bureau of Investigation
Real Estate Fraud Unit
201 N. Figueroa Street, 16th Floor
Los Angeles, CA 90012

California Department of Real Estate
320 W. 4th Street, Suite 350
Los Angeles, CA 90013

California Association of Realtors
525 S. Virgil Avenue
Los Angeles, CA 90020

Los Angeles County Bar Association
P.O. Box 55020
Los Angeles, CA 90055

Department of Corporations
Financial Services Division
320 W. 4th Street, Suite 750
Los Angeles, CA 90013

If you need additional information concerning the information contained within this circular, please contact any of the above mentioned agencies.

You may report instances of real estate fraud that occur in the City of Los Angeles to the Los Angeles Police Department by calling the Los Angeles Police Department toll free at 1-877-LAWFULL (1-877-529-3855).