In California, many homeowners have built significant equity in their properties due to rising home values. However, if you're facing financial hardship — such as difficulty keeping up with mortgage payments, delinquencies, repairs, taxes, divorce, or family issues — this equity can make you a prime target for sophisticated scams and predatory schemes. Fraudsters and companies exploit vulnerability, promising quick fixes to foreclosure, fast cash, or relief from financial woes, only to strip away your hard-earned home equity or even your entire property.
Here are some of the most common scams and predatory practices currently threatening California homeowners:
1. Foreclosure Rescue Scams
Scammers pose as "experts" or "consultants" offering to stop foreclosure and save your home, often charging high upfront fees for loan modifications or negotiations with your lender — but deliver nothing. In many cases, they pocket the money and disappear, leaving you deeper in trouble. The California Attorney General warns that fraudulent foreclosure consultants specifically target homeowners behind on payments.
California Department of Justice - Foreclosure Rescue Scams: https://oag.ca.gov/consumers/general/foreclosure_scams
Los Angeles County authorities also highlight how these fraudsters reach out through ads, mail, or door-to-door pitches while advising you to ignore your lender.
LA County Department of Consumer and Business Affairs - Foreclosure Rescue Scams: https://dcba.lacounty.gov/portfolio/foreclosure-rescue-scams
2. Equity Skimming and Sale-Leaseback Schemes
In these scams, you're convinced to transfer your home's deed to the "rescuer" in exchange for promises that they'll handle payments and let you rent back with an option to repurchase. Once you sign over the title, they may take out loans against your equity, collect rent without paying the mortgage, or sell the property — leaving you evicted and with nothing.
The California Department of Real Estate identifies equity skimming and related deed transfer schemes as major threats to distressed homeowners with built-up equity.
California DRE Consumer Alert on Real Estate and Mortgage Crimes: https://www.dre.ca.gov/Consumers/ConsumerAlerts/ConsumerAlert_202510_REandMortgageCrimes.html
3. Deed Theft and Title Fraud
Fraudsters forge documents to transfer your property's title without your knowledge, often using stolen identities to sell the home or take out loans. These crimes are rising in California, with scammers targeting high-value properties.
The California DRE urges homeowners to monitor records and warns about unauthorized deed transfers.
California DRE Consumer Alert on Deed and Title Fraud: https://www.dre.ca.gov/Consumers/ConsumerAlerts/ConsumerAlert_202510_REandMortgageCrimes.html
4. Long-Term Exclusive Listing Agreements (e.g., MV Realty's Homeowner Benefit Program)
Companies like MV Realty offer upfront cash (often a few hundred to thousands of dollars) in exchange for a 40-year exclusive right to list your home if you ever sell. They record a lien on your property, and if you don't use them, you face a penalty — typically 3-6% of your home's value. This clouds your title and complicates sale, refinancing or inheritance.
The California Attorney General sued MV Realty for unfair and deceptive practices and secured a preliminary injunction requiring lien removals.
California AG Press Release - Lawsuit Against MV Realty: https://oag.ca.gov/news/press-releases/attorney-general-bonta-files-lawsuit-against-mv-realty-over-predatory-real
Similar actions in Florida resulted in a major judgment against the company.
Florida AG Judgment Against MV Realty: http://www.myfloridalegal.com/newsrelease/attorney-general-james-uthmeier-secures-judgment-against-mv-realty-scamming-florida
5. "Quick Cash" Home Buyers (e.g., We Buy Ugly Houses / HomeVestors)
Franchises under the "We Buy Ugly Houses" brand target distressed sellers with fast, no-hassle offers — often far below market value. Investigations have revealed tactics like pressuring elderly or vulnerable homeowners, misrepresenting property values, and aggressive legal action to enforce lowball deals.
A ProPublica investigation exposed how these franchises sometimes exploit sellers in distress.
ProPublica - The Ugly Truth Behind “We Buy Ugly Houses” : https://www.propublica.org/article/ugly-truth-behind-we-buy-ugly-houses
6. Modern Sale-Leaseback Arrangements (e.g., EasyKnock)
Companies like EasyKnock buy your home, let you rent it back with an option to repurchase — but at inflated prices, high rents, and added fees that make repurchasing nearly impossible. Many homeowners end up losing their equity permanently.
NPR reporting detailed how these deals can function as disguised high-cost loans, contributing to lawsuits, investigations, and EasyKnock's eventual shutdown.
NPR - Company that turned homeowners into renters abruptly shuts down: https://www.npr.org/2024/12/06/nx-s1-5218625/sale-leaseback-rent-mortgage-easyknock
How to Protect Yourself
• Never pay upfront fees for foreclosure help — it's illegal in many cases.
• Do not sign over your deed or title under any circumstances.
• Never sign documents under pressure — take time to review with trusted advisors.
• Avoid long-term liens or agreements for "quick cash" help.
• Contact your lender directly and seek free advice from HUD-approved housing counselors.
• Verify any company with the California Department of Real Estate or Attorney General.
• Monitor your property records and sign up for free deed notification services in your county.
Contact Lawyers Realty Group for Expert Help
Before signing any long-term listing agreement, quick cash purchase contract, sale-leaseback arrangement, or home equity investment agreement, seek independent legal, financial, and real estate advice to protect your interests. These companies employ sophisticated legal teams and draft complex agreements that can trap you for decades or strip away your equity.
If you're facing financial stress and want to protect your home equity, don't go it alone. At Lawyers Realty Group, our Attorney/Realtor® provides tailored insights to navigate these predatory schemes, remove improper liens, explore safe alternatives like strategic listings or loan modifications, and help you retain your hard-earned equity.
Call (949) 264-0966 for a free legal analysis with no obligation. We're here to fight for California homeowners and help you keep what you've worked so hard to build.
