Is this a source of lessons learned? California Revokes Record Number of Real Estate Licenses

[Mike L. Williams]

The California State Department of Real Estate (DRE) says it revoked a record number of real estate licenses for cause in 2009, and accepted another record number of license surrenders from real estate professionals facingdisciplinary action. All told, over 775 licensees in the state had their license revoked or simply surrendered their licenses while facing accusations last year.Over the past two fiscal years, the DRE averaged 446 license revocations and 59 license surrenders. In 2009, license revocations jumped over 50 percent, to 672, while license surrenders skyrocketed nearly 80 percent to 105. The 122 cases that resulted in license suspensions in 2009 remained relatively unchanged from the 125 license suspensions averaged in the past two fiscal years.The downturn in the real estate market is a big reason disciplinary actions are up, with foreclosure prevention cons a large contributing factor, the state department said.“With so many people struggling to stay in their homes, foreclosure rescue and loan modification scams have risen dramatically,” DRE Commissioner Jeff Davi said. “And what is even more unsettling, a majority of offenders involved in loan modification scams are not even licensed, which limits a consumer’s ability to obtain restitution or verify the legitimacy of a business.”In 2009, the DRE initiated over 2,000 investigations involving loan modification complaints, which represents 25 percent of all cases. The department issued over 180 desist and refrain orders to nearly 348 different respondents performing loan modification services, ordering them to stop or change their business practices.Of those, the DRE discovered 60 percent were not licensed and ordered them to cease licensed activity, including offering loan modification services. In addition, nearly 100 real estate licensees have been accused of violating the real estate law in connection with loan modification complaints. According to the DRE, many of the completed cases have been referred to law enforcement agencies for criminal prosecution.In order to help inform consumers to stay away from the bad actors, the DRE posts on its website all the recipients of desist and refrain orders and accusations in loan modification complaints along with a copy of the order. The department also makes real estate license verification available to consumers on its site.Homeowners that are defrauded by a licensee and obtain a fraud judgment in civil court, but are unable to collect on the judgment, may be able to receive restitution from the DRE. The agency administers a recovery account for fraud victims that can pay a victim up to $50,000 for a transaction.

[John Accornero]

Statistically, it was once said that 1 in 10 people in California have a real estate license. This is just a drop in the bucket. Money breeds corruption and its no wonder we are just a notch above used car salespeople in some eyes. Yet everybody has a gimmick too..." I do this, this , and that". It would be really leveling the field if the DRE got into issuing customer service surveys...how many mishandlings go on that are never reported? HMMM

[Donna Lavin - CDPE, SFR]

I am glad to hear one state is doing something. We need DRE in every area to revoke the license for unethical and I will just leave it at that description. I understand if someone just wants to cause trouble and have you reported out of anger then I feel you should be heard. However, if proven in the wrong after three times hello DRE do not allow them back into the business. In the Chicago area we have had two agents license suspended six times. They were suspended for a short time, fined and then back to business as usual. The public is not aware and they see their signs on billboards of being the best, selling homes in three days etc., What service are the DRE doing for the public or other Realtors that have never been suspended? I know the department make real estate license verification available to consumers, but most consumers are not aware of the site or that you have the ability to do a search. I feel strongly that if you have 3 suspensions you should not be allowed to ever have a license again.

[Johnny Huang]

Good, we should police our own and make sure things are done right for everyone.

[Steve Adkins]

WOW, great post and good info for all of us to read. I don't think we will see these issues fully addresses for years to come, but it's good to know one state is doing something about it.