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UPCOMING SPEAKING EVENTS

Navigating the Perilous Waters of Investor Fraud

Investor fraud remains a formidable challenge, exploiting the trust and financial ambitions of individuals aiming for growth. This form of deceit, ranging from misappropriation of funds to disseminating false information, employs a variety of tactics to trap its victims. Among the most notorious is the Ponzi scheme, a strategy named after Charles Ponzi. These schemes promise high returns through alleged lucrative ventures but instead pay old investors with the capital from new ones, creating a mirage of success until inevitable collapse, leading to significant losses.

A recent illustration of the destructive nature of investor fraud involved Kumar Arun Neppalli, a former Oxnard employee, who plead guilty to 17 counts of wire fraud in connection with such a Ponzi scheme. Neppalli’s scheme, which preyed on the Indian American community in Cary, North Carolina, promised hefty returns from a non-existent real estate development. Utilizing his community status and feigned insider knowledge, he managed to swindle investors out of substantial savings, showcasing the perilous exploitation of trust within specific communities.

Guarding against such schemes involves proactive and thoughtful action on the part of an investor. Some potential defensive strategies include:

• In-depth Research: Prior to any investment, conduct exhaustive research on the opportunity, scrutinizing the track record and any legal discrepancies associated with the parties involved. Skepticism towards offers of unusually high returns for minimal risk is prudent.

• Verification of Credentials: Ensure the investment offer comes from individuals or entities with legitimate registrations and compliance with regulatory standards.

• Caution Against Pressure: Stay wary of any investment urging rapid action or secrecy. Such tactics aim to circumvent thorough analysis.

• Skepticism towards Unsolicited Offers: Exercise caution with unexpected investment proposals, particularly those via direct outreach methods like cold calls or social media. Genuine investment opportunities are generally presented through official and reputable avenues.

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• Trust Your Gut: If an investment seems implausibly advantageous or evokes suspicion, heed your instincts. Consultation with financial advisors or well-informed colleagues before committing is advisable.

Awareness, skepticism, and due diligence form the cornerstone of defense against investor fraud. By staying informed and trusting one’s judgment, real estate professionals and investors have the best chance of shielding their financial interests from the devastating impacts of fraudulent activities.

CASE OF THE MONTH

De Martini v. The Superior Court of San Mateo County

In the intricate landscape of real estate transactions, disputes can often arise, leading parties down a complex path of legal proceedings. A recent case sheds light on the intricacies of such disputes and the significance of lis pendens in property matters.

The saga began in 2020 when an agreement was made to sell a commercial property. However, as is sometimes the case, a dispute erupted, prompting the parties to enter arbitration. Unsatisfied with the outcome, one party sought to confirm the arbitration award through legal channels and recorded a lis pendens on the property. This action, intended to signal the pending litigation, marked the beginning of a legal battle that would take twists and turns.

Following a successful judgment confirming the arbitration award, the case was abandoned after the other party successfully moved to expunge the lis pendens. Seemingly undeterred, the party initiated a new action aimed at compelling the completion of the sale and once again recorded a lis pendens on the property. This move triggered a legal showdown, with the argument that court permission was required to record a subsequent lis pendens under the relevant legal provisions.

The matter came before the Court of Appeal, where a petition was made for a writ of mandate. In a decision that would have implications beyond the immediate parties involved, the court ruled in favor, highlighting critical points of law and procedure.

Central to the court's decision was the interpretation of relevant code governing the recording of lis pendens in successive proceedings. The court clarified that this provision indeed requires a claimant to obtain court permission before recording a lis pendens on the same property in a subsequent proceeding if a prior lis pendens has been expunged. This ruling underscored the importance of judicial oversight in managing the impact of lis pendens on property rights and transactions.

Moreover, the court addressed the standard of proof required in determining the probable validity of a real property claim, emphasizing the preponderance of evidence standard over the prima facie standard applied by the trial court. This shift in standards reflects the court's commitment to ensuring a thorough examination of the merits of a claim before allowing it to encumber real property through a lis pendens.

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In the aftermath of the court's decision, clarity emerged in the realm of property disputes, reaffirming the principles of due process and fair adjudication. The case serves as a reminder to parties involved in real estate transactions of the importance of understanding the legal mechanisms at play, particularly when disputes arise.

As stakeholders navigate the complexities of property transactions, the significance of lis pendens and its implications cannot be overstated. In the dynamic landscape of real estate law, informed decision-making and adherence to legal procedures are essential to safeguarding property rights and ensuring equitable resolution of disputes.

CalHFA's Dream For All Program Coming Back

In the spring of 2023, the California Housing Finance Agency (CalHFA) introduced a groundbreaking initiative: no-interest, no-monthly-payment loans aimed at helping lower-income residents overcome financial barriers to purchasing their first home. The response was overwhelming and the entire budget of nearly $300 million was exhausted in a mere 11 days.

Bringing back the program for 2024, California has allocated an additional $225 million to the program for this year. With this infusion of funds, CalHFA aims to continue supporting aspiring homeowners, but with a revamped approach. This spring, rather than operating on a first-come, first-served basis, the program will select qualified applicants through a lottery system.

In addition to the new selection process, new eligibility criteria have been developed with an aim at getting the funds to those most in need. Now, applicants must not only be non-homeowners themselves but also have parents who are not currently homeowners. By focusing resources on Californians facing significant housing challenges, the program seeks to maximize its impact and address critical housing needs across the state.

The Dream For All program is one avenue that is making homeownership more accessible for all Californians. It is not the only program designed to assist first time homebuyers. Aspiring homebuyers are encouraged to stay informed and engaged as they navigate the evolving landscape of housing assistance programs in the state.

More information on the Dream For All program can be found on the official CalHFA website here:

https://www.calhfa.ca.gov/dream/index.htm. 

Information about other financing programs available through CalHFA can be found at:

https://www.calhfa.ca.gov/homebuyer/programs/index.htm.

California offers a range of programs to assist first-time homebuyers, including grants, loans, and other resources designed to make homeownership more accessible and affordable. Here’s a summary of notable programs available:

• Pathway to Homeownership Closing Cost Assistance: This grant program, established by the California Association of Realtors’ Housing Affordability Fund, provides up to $10,000 to help cover closing costs for eligible first-time buyers in California who are members of underserved communities and meet certain income limits.

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• Federal Programs: Including FHA Loans, which require a down payment as low as 3.5% and are available to buyers with lower credit scores; VA Loans, offering zero down payment options for veterans and service members; and USDA Loans for rural homebuyers with zero down payment required. Additionally, Freddie Mac Home Possible Mortgages and Fannie Mae HomeReady Mortgages offer low down payment options for low-income borrowers.

• Local Programs: Various localities in California offer their own first-time homebuyer assistance programs, such as the City of Norwalk, County of San Diego, City of Oakland, City of Los Angeles, and others. These programs often include down payment and closing cost assistance.

For more detailed information on eligibility, application processes, and to find out which programs best suit your situation, you can research these programs online or work with a real estate professional in your community that is familiar with these programs.

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