The number of potential fraud cases reported to a San Francisco home equity hotline have increased each year since its inception in 1996. Hard Sell identifies new programs to combat such fraud and abuse, most of which have been implemented since the release of Consumers Union's groundbreaking 1995 report on home equity fraud. However, many of the most successful programs are limited to certain geographic areas or narrow audiences. In addition, Governor Wilson last year vetoed two important consumer protection measures. In California, we have successful fraud-busting programs that no other state in the country has.
Many people simply fall through the limited safety net of protection.
Unscrupulous lenders continue to use four common practices to sell high-cost home equity loans to California homeowners, regardless of their ability to repay the loan. Consolidate various types of debt into unaffordable home equity loans. There are new protections, earlier notification of potential fraud and increased consumer education programs to help consumers avoid becoming victims. The legislature passed a landmark bill that went into effect in 1996 to fund real estate fraud units within local district attorneys offices. California is the first and only state in the nation to have units dedicated to pursuing these criminal actions.