Record Number of Real Estate Bad Actors

Wednesday, August 08, 2012

After years of complaints that it was too soft on the industry it was supposed to be policing, the California Department of Real Estate announced it revoked a record number of licenses during the last fiscal year.

A total of 781 real estate licenses were revoked, compared to 686 the year before. Another 190 were suspended for cause—an increase of 80% from a year ago—and 138 people surrendered their licenses while disciplinary action against them was pending.

The 1,109 license revocations, suspensions and surrenders doubled the number from five years ago. A record number of Desist and Refrain Orders, 213, were also issued to deter people or entities without licenses from participating in activities that generally require the credential.

A statement from the Real Estate department blamed the collapse of the real estate market for a surge in disciplinary activities in 2010, and uses nearly the same language to describe today’s state of affairs.  The department said it has filed more than 500 actions against 1,400 entities since 2010 that were allegedly involved in illegal foreclosure rescue scams and short sale scams.   

One of the ongoing complaints about the department is that its disciplinary activities include a high percentage (more than 50% pre-2009) of cases that do not involve real estate transactions. Typically, they include such crimes as driving under the influence of alcohol, domestic violence or petty theft. Critics question this focus, considering the department’s mandate to protect consumers from real estate fraud.

–Ken Broder


To Learn More:

California DRE Revokes Record Number of Real Estate Licenses (Department of Real Estate) (pdf)

California Revoked Record Number of Real Estate Licenses in 2011-12, Officials Say (by Mark Glover, Sacramento Bee)

Department of Real Estate 2011 Annual Report (pdf)

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