The governing body of San Diego County is focusing its eyes on possibly raising the fees for some real estate property filings ostensibly to drum up more funds for real estate fraud investigations.

This potentially new revenue stream is being considered by the assessor’s office for a number of reasons, not the least of which concerns a new California state law – Senate Bill 1342 or SB 1342 – intended to help counties that were scorched by the recent foreclosure crisis clear some of their housing-fraud case backlogs.

As of Jan. 1, the maximum fee counties are allowed to charge for select real estate transaction filings paperwork jumped up from $3 per filing to $10. The money from these fees has traditionally been funneled into a trust fund for real estate prosecution and probes.

According to the legalese in SB 1342, the $3 maximum per-filing fee was “insufficient to adequately fund real estate fraud prosecutions and needs to be increased.” Some of the specific documents directly affected include notices of default – which is typically the opening salvo in the foreclosure process – and trustee deeds – which are filed once the foreclosure transaction is completed.

Counties Face Lingering Fallout From Housing CrisisFraud_dictionary entry

Riverside and Ventura counties have already raised their filing fees. Ventura County increased its fee to $6 per filing. In Riverside, it’s now $10.

San Diego County and others are likely to wait and see if the fee hike is challenged in court, specifically by Sacramento-based Howard Jarvis Taxpayers Association. The group argues that the fee hike is a special tax and therefore unconstitutional if enacted without a two-thirds vote of county residents.

Twenty-two counties in the state, including San Diego, charge filing fees to maintain real estate prosecution funds, based on an October report from the Legislative Analyst’s Office.

Because of the fund, California counties were able to lock in 200-plus real estate-crime convictions from 2011-2012, the report states, including 23 in San Diego County. Those convictions represent $656.6 million in monetary losses.

If no legal challenges surface, San Diego County Clerk-Recorder-Assessor Ernie Dronenburg would like to propose a filing-fee hike to the county Board of Supervisors early in the year for approval.

Home foreclosures and mortgage defaults in the county have fallen drastically since the height of the recession, but the fallout from the housing crisis still lingers.

“We’re always struggling for resources to try to combat the (real estate fraud) problem,” said Stephen Robinson, who heads the economic crimes division for the San Diego County. He added that the fund has helped pay for a real estate unit, including three lawyers, three investigators, two paralegals and a secretary. Also, additional resources are welcome because mortgage-fraud cases are time-consuming and complex.

“There are definitely cases that we could work if we had additional resources,” Robinson said. “It would be difficult for a police department to say, ‘I’m going to give a detective one case to work on for six months.'”

Tags: , , ,

This is filed under National Markets.


     Twitter It!