October 1, 2026

DRE Warns of Reemerging Advance-Fee Scams in Real Estate Loans

Sacramento, California – The California Department of Real Estate (DRE) urges consumers and licensees to be aware of upfront fee loan scams.

Consumers and real estate agents should be wary when advance fees are requested as part of a consumer loan.

What the Scam Can Look Like

1. The scammer either uses a legitimate loan originator or lender's license or will create a false license.

2. Misleading Loan Advertising Claims (False Promises):

1. The loan is a 100% financing loan, i.e., no down payment needed.

1. They work with lenders or loan products that others don't have access to.

1. Consumers have to pay an upfront origination fees to start the process.

1. The upfront fee is refundable.

1. The consumer is guaranteed to get the loan.

3. Once the consumer pays the upfront fee, that fee suddenly becomes non-refundable.

4. And that consumer no longer qualifies for the loan or the scammer will delay the loan process.

Collection of advanced fees require an advanced fee agreement, and the agreement must be pre-approved by DRE.

What Consumers Can Do

Always Verify Details
Scammers promote high-return real estate investments that are either nonexistent or misrepresented, leading to financial losses for investors. Verify a real estate agent's license with the DRE at: California Department of Real Estate.

Contact Your Real Estate Agent
Contact your real estate agent to flag your concerns with the request for advance fees. Many agents have managed many real estate transactions and can identify predatory behavior.

Ask Questions
Consumers should always ask questions and never feel rushed or pushed to make a quick decision. Take your time and if you feel under pressure, that may be a red flag.

Contact DRE
If you are asked to pay advance fees, conduct greater research and talk with your agent. When in doubt, contact DRE at: https://dre.ca.gov/Contact.html.

How Consumers Can Report Suspected Fraud

If you believe you have been a victim of a real estate crime, suspect predatory behavior in your real estate transaction, or have a concern or complaint about a real estate salesperson or broker, you can file a complaint with DRE: https://dre.ca.gov/Consumers/FileComplaint.html

xxx

The Department of Real Estate is the regulatory agency that enforces the Real Estate Law, Subdivided Lands Act, and Vacation Ownership and Timeshare Act.DRE oversees the licensure of approximately 410,000 licensees. The Department’s mission is to safeguard and promote the public interests in real estate matters through licensure, regulation, education, and enforcement. Consumer protection is its highest priority. For more information, visit: www.dre.ca.gov.