Pricey Real Estate Prompts Scammers To Target Senior Homeowners
This is KPBS midday edition. I'm Maureen Cavanaugh amid California's record shattering housing prices. The state's senior homeowners are sitting on a gold mine and it has made them marks for con artists as part of our statewide collaboration covering the California Dream. PBS is Amita Sharma looks at the tricks scammers use 70 year old Marianne Welch has always wanted to pass down the two bedroom Sunnyvale home she inherited from her mom to her seven grandchildren. So imagine how she felt when she went to her mailbox and 2016 hoping no letter it contained completed paperwork to buy her house. I was surprised because it's not for rent or for sale or for anything. The letter offered to pay Welch seven hundred fifty thousand dollars for a house that is the young techies dream a house that is within walking distance of Apple Google and LinkedIn and a house that is worth more than one and a half million dollars. The letter even came complete with directions on where the sender hoped Welch would sign her consent to sell. That makes me very very very angry to say the least. If they're doing that to me they're going to be doing it to others. They are. We've been seeing an uptick in cases that involve direct solicitations to elderly homeowners to sell their homes potentially for well below fair market value. No official statewide stats exist on real estate fraud against seniors. But anecdotally prosecutors across California like Santa Clara County deputy district attorney Sherry Bellard says it's enough of a problem to measure warning the elderly. She believes California's super heated housing market is what is driving scammers. So is the age of their targets and they remember buying their home for forty thousand dollars. But in these crazy upswings of market value they have no idea that their property might be worth eight hundred thousand one million two million dollars. Real estate opportunists find their prey trolling public records. Santa Clara County real estate fraud coordinator Duane Shawanda says they then target seniors with fliers sometimes asking ominous questions like these. You want to cash up before war with North Korea breaks out or third notice how much longer before I hear from you. The homeowner says hey I never got a first or second notice. It took two notices to 84 year old Carl law and her 89 year old husband George offering to buy their one acre lot in eastern San Diego County before they got mad. They estimate the land is worth fifty thousand dollars. They were offered eight hundred dollars in cash. The first shot I thought was just stupid joke the second time I thought this guy is up to something and you can send out hundreds of dollars to get hit once you make a fortune. They speculated the person carefully picked them to lowball. It looked like he was just thinking OK these guys have had this since 79. They're very old now. They probably are a little goofy. Prosecutors say some cameras go door to door to find senior homeowners or they go to public places even churches and strangers aren't the only ones trying to steal real estate from the elderly relatives try to. California Attorney General Javier Basara says seniors and sincere relatives should be aware of these scams. He urged people to report real estate fraud quickly and he suggests that seniors save every document in case a real estate deal goes south. Always keep good evidence keep your records and know that there are people you could turn to. Who for a living try to protect our community. Joining me now is California dream project reporter K.P. CBS's Amita Sharma. Welcome. Thank you. It's good to be here Maureen. How did you find out this type of senior fraud scam was happening. Well I have an elderly friend who lives in another county who told me that she and her husband who have owned their home for 36 years are constantly inundated with flyers in their mailbox and daily phone calls from random people asking sometimes pressuring them to sell their house and the offers come with promises to do the transaction without inspections without a real estate agent which will obviously save on commission save the seller on commissions. So I started calling district attorneys up and down the state and found that for the most part a lot of seniors in California have been hit with these high pressure tactics to sell their homes. The San Diego County DA's office said real estate fraud against seniors is the fastest growing crime in their real estate fraud section state attorney general's office also said it's a growing problem. However no official statewide stats exist on the prevalence of the crime. And I should say that what is driving all of this is the fact that California's housing market is so heated. Now you spoke with two potential victims who were savvy enough to see the offer as a scam. And you say they were angry. Yes they were angry and very indignant because the connotation of these unsolicited offers was that the person who was making them was assuming that these seniors immensely compromised that they were stupid and would fall for selling their homes or their property land. In the case of the laws for way below market value the folks sending out the flyers again with offers to carry out inspections cut out real estate agent are designed to be so enticing that the seniors should they hope fall for it. And prosecutors are underscoring that the people who are sending out flyers are hoping that the senior home owners don't know the true value of their homes. And prosecutors tell me that when a senior bites and does sell their home the buyers flip the property within months for a much much higher price. So if an older person let's say who has mental impairments did sell his or her house to one of these scammers would it be legal though. Doesn't someone have to be of sound mind to sign a binding contract. You would think Santa Clara County Prosecutor Sherry Bellard told me it may be a crime to buy property from an elderly homeowner who lacks the mental capacity to enter into a contract. The problem is is that some of the victims of this have just enough mental capacity to get them into trouble so they understood that they were selling their home and signed on the dotted line but maybe they didn't realize that the selling price was way less than what they could have gotten. Or maybe they didn't realize how much it was going to cost then go rent an apartment someplace or buy another home where that they would have to move out immediately. So in those cases it may be hard to undo the transaction. Now San Diego County Prosecutor Valerie Tanny told me that sometimes her relatives will take advantage of a mentally compromised senior we've all heard of that and have that person signed documents that were fraudulently created. And if prosecutors can prove that they can do those transactions in some cases now that law I'm told is somewhat new. So it's still being tested. Now the prosecutors you spoke with obviously know that this is a problem. What are they doing to warn seniors about this scam. Well the Santa Clara County DA's office issued a public service announcement to seniors warning them to be cautious about these unsolicited offers to buy their homes. That warning came with the advice that seniors should not sell their home if they feel pressured they should retrieve paperwork that they will be paid once the deed is signed and have a place to live in advance of selling their home and GA's across the state are being educated about what's going on so they can respond more effectively if they receive complaints about this problem. You have a second part to your senior fraud investigation. Tell us about what's coming up tomorrow. It's about a story of an elderly man in San Diego. He has clear cognitive disabilities and yet lenders are approved for property assessed energy loans for him. These are loans that are used to finance energy efficient home projects improvements and they are paid back by tacking on the repayment to property tax bills. So this man has taken out the loans that he doesn't really understand. And now his property tax bill has gone from 300 dollars a year to seventeen thousand dollars a year. He's now in danger of losing his home because he only brings in eleven thousand dollars a year in Social Security income. We'll be listening for that I've been speaking with PBS is a Meeth Sharma. Thank you. Thank you Maureen.
Seventy-year-old Mary Ann Welch had always wanted to pass down the two-bedroom Sunnyvale home she inherited from her mother to her seven grandchildren.
So she was astonished when she found a letter in her mailbox in 2016.
“It said we’d like to buy your house, and I was surprised because I had not put it up for rent or for sale or anything,” she said.
The letter offered to pay Welch $750,000 for a house that is a young techie’s dream. It’s a house that is within walking distance of Apple, Google and LinkedIn offices. And it’s a house that currently is worth more than $1.5 million. The letter even came ready with paperwork, complete with directions on where the sender hoped Welch would sign her consent to sell.
“I saw the contract for me to sign and I was furious,” Welch said. “If I had Alzheimer’s or if I was demented at all, I would have signed it thinking I would get all this money. I wrote a letter to the (district attorney). If they’re doing it to me, they’re going to be doing it to others.”
“We’ve been seeing an uptick in cases that involve direct solicitations to elderly homeowners potentially well below market value,” said Cherie Bourlard, Santa Clara County Deputy District Attorney.
No official statewide stats exist on real estate fraud against seniors, but Bourlard said it’s enough of a problem to merit warning the elderly. She believes California’s super-heated housing market is driving scammers and so is the age of their targets.
“They have no idea of the value of the homes they’re sitting on,” Bourlard said. “They remember buying their home for $40,000 but in these crazy upswings of market value, they have no idea their property might be worth $800,000, $1 million, $2 million.”
Bourlard said some elderly victims of real estate fraud have just enough mental capacity to get them into trouble.
“They might not clearly understand what they’re doing,” Bourlard said. “But they have enough capacity to where the transaction is not voidable. Studies show as we age, we become less savvy in financial transactions.”
Real estate opportunists find their elderly prey by trolling public property records. Then, they make contact.
“Direct purchasers are looking at assessor’s records and determining homeowners, who have very low assessed values, are likely to be elderly homeowners and are targeting them with fliers,” said Duane Shewaga, Santa Clara County real estate fraud coordinator.
Some of the fliers ask ominous questions like, “Do you want to cash out before war with North Korea breaks out,” or “Third notice, how much longer before I hear from you?”
“The homeowner says I never got a first or second one from you,” Shewaga said.
It took two notices to 84-year-old Carol Law and her 89-year-old husband George Law offering to buy their one-acre lot in eastern San Diego County before they got mad. They estimate the land is worth $50,000. They were offered $800 in cash.
“The first time I thought it was a stupid joke,” Carol said. “The second time I thought this guy is up to something.”
They speculated the person carefully picked them to make a low-ball offer.
“It looks like he was thinking, `OK, these guys have had this since 1979, they’re very old now,’” Carol said. “They probably are a little goofy.”
San Diego County prosecutor Valerie Tanney said some scammers go door to door to find senior homeowners, or they go to public places.
“I’ve had numerous cases where they approach and befriend people and use religion and the trusting nature of people at churches to victimize,” Tanney said.
Strangers aren’t the only ones conning the elderly out of their real estate assets. Loved ones try too.
“We get complaints from one family member against another family member that the person caused a relative to alter what was their previous estate plan at a time when that person didn’t have the capacity to make that decision,” Tanney said.
She advised seniors and sincere relatives to educate themselves on current scams. She urged people to contact authorities to report real estate fraud quickly to police and district attorneys’ offices. She also advised seniors not to sign any paperwork without first consulting an expert such as a lawyer, a financial planner or a real estate agent.
California Attorney General Xavier Becerra suggested that seniors save every document in case a real estate deal goes south.
“Always, keep good, good evidence,” he said. “Keep your records and know there are people you can turn to.”