402,000 homeowners faced with underwater mortgages in California

Imagine everyone in Oakland dealing with a financial headache, one that can affect everything from their buying power to retirement plans?

That’s the far-reaching effect of negative equity in California.

Sure, the housing market has enjoyed a big-time boom—the median-home price is at the highest level in seven years—and many homeowners, especially those who bought in the past few years in the Bay Area and Southern California, are money ahead.

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But hundreds of thousands of homeowners—about 402,000—are dealing with an underwater mortgage, where they owe more than the current value of their home, according to the latest Zillow report.

We want to put that in some kind of perspective. It’s the equivalent of everyone who crossed the Golden Gate Bridge during the past three days. Or each traveler who passed through Los Angeles International Airport during the past two days. Or every person who entered Disneyland during the past 10 days.

 

And if you’re dealing with an underwater mortgage, even the happiest place on earth can be difficult to enjoy. Just ask the one of every eight homeowners with a mortgage who is faced with negative equity in the Golden State.

Many of these homeowners bought at the peak of the housing market – between 2005 and 2008, depending on the region – with little or no down payment. Now, they are faced with an underwater mortgage.

In fact, California homeowners have a combined $59.5 billion in negative equity, or about $68,000 per homeowner. And the chance that many of them will dig out anytime soon is unlikely.

‘Continuing to make monthly payments on an underwater home is like renting’

Certainly, the situation continues to improve, especially as home prices rise.  For example, fewer than 3% of homeowners with mortgages in San Francisco are underwater. And only 6.5% in Los Angeles County – though the county has the most underwater mortgages at 75,411, with a combined total of $14 billion in negative equity.

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But drive two hours east of the Bay Area or two hours north of Los Angeles and the situation is much different. Madera and Kern counties are dealing with 16%-plus rates of underwater mortgages, respectively. Negative equity is a problem throughout much of inland California, with double-digit rates – and several counties top 19% (Lassen County has the highest rate in the state at 24.8%).

It could be a very long time before these homeowners escape negative equity—or get right-side-up, says Southern California mortgage consultant Greg Cook.

“Continuing to make monthly payments on an underwater home is like renting, but with the interest mortgage deduction,” he says. “And if one of those pesky ‘life events’ happen (such as a divorce or job loss) and they’re forced to sell, it’s either foreclosure or short sale, which puts subsequent homeownership out of the question for three to seven years.”

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Than Merrill

Now, if homeowners are making their mortgage payments on time and have no plans to sell, then negative equity is not much of a problem, says Than Merrill, a national real estate expert who founded CT Homes LLC and was a host of A&E’s Flip This House.

“Whenever you are confronted with a debt that exceeds the home’s value, otherwise known as negative equity, your financial position on the asset will take a hit,” Merrill says. “However, the fact that you are underwater may not impact your situation as you may have originally anticipated, especially if you have no intentions of moving anytime soon. As long as you are OK paying considerably more than the home is worth, and can afford to continue to do so, your finances should remain intact.”

As much as $100,000 available to help homeowners with underwater mortgages

For homeowners who aren’t OK paying considerably more and want to escape an underwater mortgage, Keep Your Home California is a possible solution. The free mortgage-assistance program’s Principal Reduction Program offers as much as $100,000 to low- and moderate-income homeowners dealing with underwater mortgages.

So far, more than 9,100 homeowners have been approved for the Principal Reduction Program, receiving about $548 million since February 2011. Many of those homeowners were dealing with an underwater mortgage.

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The average homeowner has received $60,220 from the Principal Reduction Program since early 2011. For many homeowners, the program offers another benefit—lower monthly payments. The average homeowner approved for the Principal Reduction Program in the second quarter of 2016 saved almost $260 per month.

Now, homeowners must meet county-by-county income requirements and have experienced or continue to suffer from a financial hardship—such as a job loss, cut in pay, divorce to extraordinary medical expenses—to be eligible for Keep Your Home California. The homeowner’s mortgage service, the company that collects the monthly payment, must participate in the program. About 250 mortgage servicers, including Bank of America and Wells Fargo, are enrolled in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

 


Keep Your Home California eligibility requirements protect taxpayer funding

If a close relative trusted you with a lot of money and wanted you to spend it wisely, you would feel a sense of duty and responsibility, right?

Well, that’s the situation for Keep Your California.

Uncle Sam – also known as the U.S. Treasury Department – has issued $2.36 billion to Keep Your Home California during the past five years, with the funds reserved to help homeowners who are struggling with their mortgages due to a financial hardship.

The goal has always been to help prevent avoidable foreclosures and ensure that homeowners who receive assistance are repositioned in a way that ensures they will be able to make their payments going forward. The ideal outcome is to stabilize communities for the long-term, not simply kick the can down the road.

However, an equally important goal for Keep Your Home California is to be good stewards of the federal funds – your tax dollars.

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It’s a commitment that program officials take very seriously. Keep Your Home California established four programs in 2011, allowing low to moderate income homeowners to catch-up on past-due amounts, have their monthly payments made for them while they are out of work, or even reduce their outstanding balance and cut their mortgage payments – all for free.

The state-managed program has been a huge success, with more than $1.5 billion already provided or scheduled to 65,000-plus California homeowners. The program has enjoyed record quarters for funding issued during the past year.

 

Many homeowners still need Keep Your Home California. And, Keep Your Home California is here to help.

At the same time, the federally funded program must ensure that homeowners meet eligibility requirements, from county-by-county income limits to an identifiable financial hardship, such as a job loss, cut in pay, divorce, death or extraordinary medical bills.

In addition, Keep Your Home California must consider factors to evaluate the affordability of the home, so that there are reasonable assurances the homeowners will remain in their home after the assistance is provided. If a homeowner is behind and cannot afford their monthly payment, it does not make sense to use program funds to catch them up, only to have them fall behind again.

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Keep Your Home California eligibility criteria helps to make sure homeowners are left in a sustainable situation, as evidenced by the fact that 93 percent of homeowners who receive assistance are still in their homes two years later.

The standards that have been set to identify qualified homeowners are not meant to be a barrier to accessing the assistance. Rather, they were established to make sure that program goals are met.

Keep Your Home California must safeguard taxpayer dollars – and the program must be an effective and appropriate use of these federal funds. Some may feel it’s a hassle, but homeowners applying for the program are required to provide documents, like income information and tax returns, in order to show they have suffered a financial hardship and need the assistance.

Applicants cannot be involved in an active bankruptcy and must live in their home. Keep Your Home California was not established to help with income properties or second homes. And, of course, homeowner credit information and mortgage details are collected and considered.

Then, Keep Your Home California and the homeowner’s mortgage servicer – the company that collects the monthly payments – review the collected information to see if the applicant qualifies for assistance.

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It’s much like applying for a mortgage, as it should be, since homeowners approved for the program could receive as much as $100,000 in free mortgage assistance – either from one lump-sum under the Principal Reduction Program or a combination of programs.

Homeowners do not directly receive the dollars; the funds are delivered from Keep Your Home California to the homeowner’s mortgage servicer so the money can be applied to the homeowner’s mortgage as intended. It’s just one more way to ensure funds are used appropriately.

Make no mistake; Keep Your Home California officials want to help as many homeowners as possible, as long as they meet the program requirements.

In fact, Keep Your Home California has expanded the program on several occasions – for example, increasing mortgage assistance from 12 to 18 months for out-of-work homeowners under the Unemployment Mortgage Assistance program – to allow more homeowners to benefit from the program. Keep Your Home California also added the criterion of negative equity equal to or in excess of 120% of the property value as a qualifying financial hardship for the Principal Reduction Program.

Keep Your Home California cannot add, change or modify a program without an extensive review and approval by the U.S. Treasury Department. It’s all about effectiveness, accountability and responsibility.

Finally, every dollar allocated to Keep Your Home California must be used for the program. Funding cannot be used for other programs or the state budget – only Keep Your Home California.

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Not everyone who contacts Keep Your Home California will qualify for assistance – and that is not necessarily a bad thing. Eligibility criteria are Keep Your Home California’s first line of defense against people trying to defraud the program. The mission is to help homeowners who are at risk of foreclosure due to no fault of their own and whose options are limited. And, the responsibility to utilize the federal funding to achieve this mission is of utmost importance.

Now that you know how and why Keep Your Home California ensures the funding is being used wisely, learn how the free program can put the money to work for you.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.


Higher income limits in 26 counties will help more homeowners

Keep Your Home California recently increased homeowner income limits in 26 counties – or almost half of the counties in the state.

The higher income limits – a boost of several hundred to a couple thousand dollars – will allow more homeowners to be eligible for Keep Your Home California.

Keep Your Home California has already helped more than 65,000 homeowners, and thousands more could benefit from the free mortgage-assistance program, especially with the increased income limits.

For example, four Bay Area counties – Marin, San Francisco, San Mateo and Santa Clara – have new income limits of $129,240, or about $50,000 more than the median household income in San Francisco, according to the U.S. Census Bureau.

And lower-priced, rural counties – think Butte, Fresno, Merced, Tulare and several others – have been increased to $70,680. The higher limit easily exceeds the median household income for these counties. For example, Butte County’s annual median income is $43,165.

Now, county income limits are just part of the requirements for Keep Your Home California. A homeowner’s mortgage servicer, the company that collects the monthly payments, must participate in the program. More than 250 mortgage servicers – including Bank of America, Wells Fargo and Chase – are enrolled in Keep Your Home California.

Homeowners must also have endured or are still dealing with a financial hardship, such as a cut in pay, job loss, death in the family or extraordinary medical expenses. Severe negative equity – an underwater mortgage with a loan-to-value ratio greater than 120% – can qualify as a financial hardship under the Principal Reduction Program.

The Principal Reduction Program offers as much as $100,000 in assistance to reduce homeowners’ outstanding balance on their first mortgage, and often lowers the monthly mortgage payment, further easing the financial burden of homeowners.

Keep Your Home California – a federally funded, state-managed program – has two other first mortgage programs to help homeowners remain in their homes:

  • Unemployment Mortgage Assistance Program – Out-of-work homeowners eligible for jobless benefits can receive as much as $3,000 per month for up to 18 months, or a total of $54,000. The program allows homeowners to focus on finding work without worrying about their mortgage payments.
  • Mortgage Reinstatement Assistance Program – Homeowners can catch-up on past-due mortgage payments with up to $54,000 in assistance. Qualifying homeowners must be able to make their mortgage payments going forward.

Keep Your Home California counselors will determine the best program to help homeowners based on their particular situation. Also, Keep Your Home California has partnered with non-profit housing counseling agencies throughout the state, allowing homeowners to meet face-to-face with counselors to apply for the program, – all for free. Homeowners can check for housing counseling agencies in their region on the Keep Your Home California website.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-KEEP (5337) or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

Photo courtesy of Unsplash.

 


Celebrating homeownership month by saving homeowners

June is Homeownership Month, when federal and state agencies, lenders and real estate agents educate and encourage home-shoppers to become homeowners.

Homeownership is critical for building strong communities, creating jobs, energizing the economy – and is often a good investment for homeowners over time.

Keep Your Home California was established as a result of the Great Recession. The goal was to help neighborhoods, communities, the economy and, of course, homeowners by providing mortgage payment assistance to people who suffered financial hardships in order to keep them in their homes.

So far, the federally funded, state-managed program has helped more than 64,000 homeowners avoid foreclosure since early 2011.

California Suburban Sprawl

Many of these families would have lost their homes, and it would have taken several years before they could have been eligible to apply for a mortgage and return to being homeowners. Some homeowners may have never been able to afford a home down the road, especially with fast-rising home prices and much-stricter lending requirements.

In fact, only one of every three families could afford to buy the median-priced home in California during the first quarter of 2016, according to the California Association of Realtors.

California’s homeownership rate was about 54% in 2015, much lower than the 61% in 2006 (considered the peak of the housing market) — and a full 10 percentage points below the 64% rate nationwide, according to the U.S. Census Bureau.

In short, buying – and owning – a home in California is much tougher today than a decade ago.

So, Keep Your Home California’s financial assistance to hard-hit homeowners during the past several years is arguably just as important as helping first-time homebuyers. Perhaps even more.

Of course, many of the housing market problems continue to plague Californians.

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Foreclosures and short sales dominated headlines – and the housing market – from 2007 through 2012. While foreclosures have dropped from the highs of that time period, there were still 23,000 homeowners faced with losing their home and leaving their neighborhoods during the past year, according to the most recent CoreLogic report.

Even with the higher prices, unaffordable or underwater mortgages – where homeowners owe more than the value of their home — are still a concern for many homeowners, especially in the Central Valley, the Inland Empire (Riverside and San Bernardino counties) and Northern California. About 400,000 homes with mortgages are underwater in California, according to the most recent data.

California’s housing market has definitely improved, but it still has a long way to go for many homeowners. So, as we celebrate the efforts to help people become homeowners during Homeownership Month, we should also recognize the importance of homeownership preservation.

Keep Your Home California services are provided free of charge. The program helps homeowners faced with a financial hardship, such as a job loss, cut in pay, divorce, death or extraordinary medical benefits. Homeowners with unaffordable or underwater mortgages can qualify for the Principal Reduction Program, which offers as much as $100,000 on mortgage assistance.

Under the Unemployment Mortgage Assistance Program, out-of-work homeowners could receive as much as $3,000 per month for up to 18 months – or $54,000 total – in mortgage assistance. Homeowners must be eligible for jobless benefits. About 1 million Californians are unemployed, according to the Employment Development Department.

Homeowners must meet county-by-county income requirements, which range from more than $70,000 in rural areas to almost $130,000 in higher-priced regions, such as the Bay Area and Orange County. And a homeowner’s mortgage servicer, the company that collects the monthly payments, must participate in the program. More than 250 mortgage servicers – including Bank of America, Wells Fargo and Chase – are enrolled in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

 

 


Additional funding allows Keep Your Home California to help more homeowners

Keep Your Home California has received an additional $383.3 million in funding from the federal government, providing the free mortgage-assistance program with resources to help at least 12,000 more homeowners.

The U.S. Department of the Treasury announced the additional funding last month, the second phase of funding approved for Keep Your Home California from the Hardest Hit Fund during the past three months.

With the additional dollars, Keep Your Home California will continue to December 31, 2020, or until the money is used. Previously, the deadline for the federally funded program was December 31, 2017.

John Chiang

State Treasurer John Chiang

“The announcement of additional funding for Keep Your Home California further validates the ongoing challenges many Californians are experiencing with homeownership,” said state Treasurer John Chiang. “We are excited to have the opportunity to help many more California homeowners who are struggling with their mortgages due to unaffordable payments, unemployment, negative equity and other financial hardships.”

The additional funding comes soon after Keep Your Home California reported its two best quarters since the state-managed program started in February 2011. Keep Your Home California issued more than $95 million in funding during the third and fourth quarters of 2015 – or a combined $190 million-plus for the second half of last year.

“While the housing market continues to recover, we know some homeowners and areas are still experiencing the damaging effects of the housing crisis,” said Mark McArdle, Treasury Deputy Assistant Secretary for Financial Stability.

California – the nation’s largest housing market and one of the hardest-hit from the housing crisis several years ago – had more than 1 million jobless residents in March. At least 50,000 homeowners in the state are 90 days or more behind on their mortgage payments, which often leads to foreclosure. California also has the most negative-equity than any state at $65 billion.

Tia Boatman Patterson

CalHFA Executive Director Tia Boatman Patterson

“The demand for assistance from homeowners and the figures from housing industry reports clearly demonstrate the continued need for Keep Your Home California,” said Tia Boatman Patterson, Executive Director of the California Housing Finance Agency. The state agency oversees Keep Your Home California. “Our primary goal is to help struggling homeowners with their mortgage problems, but everyone, from neighborhoods to state government, benefits from Keep Your Home California.”

Keep Your Home California helps homeowners faced with a financial hardship, such as a job loss, cut in pay, divorce, death or extraordinary medical benefits. Homeowners with unaffordable or underwater mortgages could qualify for the Principal Reduction Program, which offers as much as $100,000 on mortgage assistance.

Homeowners must meet county-by-county income requirements, which range from about $70,000 in rural areas to more than $120,000 in higher-priced regions, such as the Bay Area and Orange County. And a homeowner’s mortgage servicer, the company that collects the monthly payments, must participate in the program. More than 250 mortgage servicers – including Bank of America, Wells Fargo and Chase – are enrolled in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org.  The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays.


Are homes affordable across California?

Editor’s note: Zillow has provided a special blog for Keep Your Home California, detailing the financial challenges of owning a home in California.

By Satinder Haer

California’s real estate scene has received a lot of attention over the last few years. While prices skyrocketed in San Francisco, 10.2 percent of homeowners in Riverside are facing underwater mortgages. For many individuals, rising home prices coupled with stagnant wages in the last decade have caused concerns about the affordability of homes across California.

Check out these five markets where Zillow calculated whether a median priced home would be affordable for a family earning the median income for that city.

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Los Angeles

Los Angeles boasts a median home value of $586,000 as of February 2016. A simple mortgage calculator shows that a median-priced L.A. home with a traditional 20 percent down payment and 3.5 percent mortgage rate would result in a $2,760 monthly payment, including taxes and insurance.

Assuming that an individual is making the median income for an L.A. household, $49,682, a median-priced home in L.A. would not be affordable. One of the factors that lenders look at during the mortgage approval process is your debt-to-income ratio (DTI)—the total of your housing expenses and other monthly loans (including credit card, student loan and car loan debts) divided by your gross monthly income. For a conventional loan, you need a DTI of 36 or less. With an annual salary of $49,682 and zero existing debts, a DTI of 36 would allow you to qualify for maximum mortgage payment of $1,489 according to a DTI calculator.

Using the general rule for affordability—that a buyer’s mortgage, taxes and insurance should not exceed 25 to 28 percent of his or her gross monthly income—a median income earner in L.A. should spend no more than $1,035 to $1,159 on housing costs. Regardless of which calculation method is used, the monthly payment of a median priced Los Angeles home, $2,760, would far exceed what these calculations show is considered affordable on a salary of $49,682.

San Diego

Home prices in San Diego are slightly lower than Los Angeles with a median home value of $531,000.* The median income however, is higher in San Diego, at $65,759. While a lower median home value and higher median income is generally a sign that homes are more likely to be affordable in that area, a median-priced home in San Diego still isn’t quiet affordable on a median salary.

Based on a DTI of 36, you could qualify for a maximum mortgage payment of $1,973 with a salary of $65,759. However, the monthly mortgage on a $531,000 home, assuming 20 percent down and a 3.5 percent mortgage rate, would run you $2,508. The general rule of affordability paints an even worse picture. On a median San Diego income, you would want to spend no more than $1,369 to $1,534 on your monthly housing costs. The average San Diego earner would have to increase their income in order to afford a median-priced home or consider less conventional financing options that allow for a DTI ratio higher than 36.

Sacramento

Homes in Sacramento are priced significantly lower than other major California metros while the median income is comparable to those other metros. The median home in Sacramento will cost you $259,600* while the median household income sits at $50,013.

Using the same calculation, the monthly mortgage for a $259,600 home with 20 percent down and a 3.5 percent mortgage rate, would be $1,260. The DTI calculator indicates that you could afford to spend $1,500 on your mortgage if you had an income of $50,013 and no other debts. According to these calculations, a median earner in Sacramento could actually afford a home priced above the median home value in Sacramento.

The general rule of affordability does not generate exactly the same positive outlook. On a $50,013 salary, the rule suggests you’d want to spend between $1,041 and $1,166 on your housing costs each month. While this rule indicates you’d be spending more than 25 to 28 percent of your income to afford the $1,260 payment on a median priced Sacramento home, you’d be just outside the suggested percentage for housing costs. Overall, the median earner in Sacramento could likely afford the median priced home.

San Jose

Both the median home price and median income are higher in San Jose than most other California markets. A median San Jose home will cost you a whopping $817,000* while the median earner can expect to bring home $83,787. Affordability may be a serious concern in San Jose, even for those bringing home $83,787 annually, as they would not be able to afford a median-priced home.

With a DTI of 36 and zero debts, an individual earning $83,787 can expect to qualify for a maximum monthly mortgage of $2,514. Using the general affordability rule, that same individual should expect to spend $1,745 to $1,955 if they want to spend 25 to 28 percent of their gross monthly income on housing. However, the mortgage for a median-priced home in San Jose would be $3,822 each month. Both calculations indicate that you’d have to be earning well over the median in San Jose.

Oakland

Oakland, once known as San Francisco’s less expensive neighbor, is also now seeing steadily rising housing prices. The median Oakland home now goes for $586,800* while Oakland residents make a median household income of $52,962.

The DTI calculation suggests that with a DTI of 36 and the salary of a median Oakland household, the maximum mortgage payment an individual could qualify for is $1,598. However, the monthly mortgage payment on a median-priced Oakland home with a traditional 20 percent down payment and a 3.5 percent mortgage rate would cost $2,764—unaffordable on the median Oakland salary. The general affordability rule also indicates the median home in Oakland would be unaffordable for a median earner with a suggested monthly housing cost of only $1,103 and $1,235.

While the high prices in some California markets are discouraging to potential homebuyers – and shed light on affordability issues for homeowners who are struggling to stay in their homes – the numbers vary significantly by market. Affordable areas exist, but there are certainly a lot of areas where low to moderate income Californians face homeownership challenges.

*Median home prices are reflective of market data from February 29th, 2016 on Zillow’s Home Value Index.

If you are dealing with an unaffordable mortgage, please consider Keep Your Home California, a free mortgage-assistance program that offers as much as $100,000 in principal reduction. You can call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org.The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays.

 


Foreclosure crisis profiteers: Knowing the enemy

Our previous two posts dealt with the origins of the Foreclosure Rescue Scam and provided some characteristics to help homeowners recognize a scam from a safe distance. Even armed with good information, it’s sometimes hard to differentiate the good guys from the bad.

The scammer is well rehearsed at sounding smart, compassionate and sincere. At Keep Your Home California, we investigate these people fairly often and we seldom find conclusive evidence of their misdeeds. In this post, we will provide you with some practical steps that you can follow to review and identify these con artists. Warning: None of these techniques are foolproof and it’s very difficult to identify a scammer with any level of certainty.

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It is our hope that by doing a little research, you might uncover enough “red flags” to steer you away from potential danger before you lose any money. Here are a few simple steps that you can take to perform a high-level review:

  • Review correspondence from the potential Scammer. It’s likely that most of your contact with a scammer will be by email and telephone. The scammer typically doesn’t want to meet face-to-face. It’s unlikely they have an office and they might be located nowhere near you. Look at their email address. Is there a company or organization designation? Very often, scammers use public email services such as Hotmail, AOL or Gmail because they don’t work for a legitimate organization. A public email address is a red flag.

 

  • Ask about and verify licenses. Sometimes the scammer claims to be an attorney or claims to have a real estate license. They may tell you not to contact your lender, lawyer or credit counselor. Ask for their license or bar number and then verify the license with the State Bar of California or the California Bureau of Real Estate. Even without a number, you can search by name.
    • For an Attorney Search, go to http://members.calbar.ca.gov/fal/membersearch/quicksearch. Contact the attorney using the phone number listed in their profile, not the number given to you by the Scammer, to verify that the person listed is actually the person who contacted you.
    • To verify a Real Estate License, go to http://www2.dre.ca.gov/PublicASP/pplinfo.asp. Independently locate a phone number, using the internet or other genuine phone directories, and contact the person to verify that the person listed is actually the person who contacted you.

 

  • Evaluate their website … if they have one. The absence of a website is a major red flag. However, most scammers have a website. And, because they often have to change names to elude being caught, their websites are usually very sparse. A few pages without much real content and almost never the names, or photographs, of any employees, managers or executives. Their “Contact Us” page will usually be limited to an online contact form. No physical address, no phone numbers, no email addresses.

 

  • Check their physical address. If you do happen to have what appears to be a physical address, put it into Google Maps and see what appears. Go to the “Street View” if it is available. You might see an office building or a private residence but, more often than not, you will see a shopping center and one of the tenants in that shopping center will be a UPS Store, or similar mailbox service. Red flag!

 

  • Perform an Internet search. Use an effective search engine and look for the name of the company, of any individuals you can identify, and also search phone numbers that you have been given. If you poke around enough, you just might find useful information such as previous complaints.

 

  • Requests for fees. Any request for fees or money before any services are performed, payments in cash, money order or “wire transfers” are all warning signs.

Please remember that you might be dealing with criminals and we aren’t advocating that you become a private investigator or vigilante. Do not, in the course of your review, misrepresent yourself or violate anyone’s rights or privacy. If your research indicates that you are likely dealing with a Scammer, do not confront them, simply disengage.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net.