Riverside County to Charge More for Real Estate Document Filings

Despite one board member's questions about its justification, Riverside County supervisors Tuesday approved doubling the fee charged for filing a variety of real estate documents to raise revenue for anti- fraud investigations and prosecutions.

In a 3-1 vote, with Supervisor John Tavaglione absent, the board hiked the Real Estate Prosecution Trust Fund fee from $3 to $6 per document. The change takes effect in 30 days.

The fees are imposed whenever an individual or business records a deed of trust, notice of default, notice of trustee sale, affidavit, lien, lease or quitclaim deed, as well as other documents filed with the Office of the Assessor-Clerk-Recorder.

Revenue generated from the fees is placed into an account from which the District Attorney's Office withdraws funds as needed but which are restricted for investigations and prosecutions of mortgage and foreclosure-related scams, according to county officials.

The assessor's office receives a relatively small portion of the money to cover costs associated with mailing "courtesy notices" that alert homeowners whenever a document has been filed that impacts his or her property.

Assessor Larry Ward and District Attorney Paul Zellerbach initially proposed that the board hike the fee from $3 to $10, citing state legislation that permits an increase to that amount. But Supervisors John Benoit and Kevin Jeffries objected to what would represent a more than 200 percent jump in document filing charges.

Jeffries also disliked what he described as vague language in the resolution calling for the fee increase, noting that too many unanswered questions made him uncomfortable backing it.

"I went through this proposal backward and forward, and all it says is there's money going into a fund, not how it's going to be spent," Jeffries said. "It's like we're writing a blank check, and I can't sign off on that."

Zellerbach told the board that without the increased funding from higher fees, his office would continue to lack the necessary staff to get ahead in ferreting out and prosecuting fraud.

The D.A. pointed out that in fiscal year 2010-11, the agency received well over 900 complaints from the public regarding potential scams, but only 60 investigations could be conducted -- followed by a dozen criminal prosecutions - - because of limited resources.

A staff of eight people make up the D.A.'s Real Estate Fraud Unit, which often has to plow through tens of thousands of pages of documents to uncover fraud and abuse, Zellerbach said.

He told the board that he's in dire need of a full-time forensic accountant.

"I don't know how much it would cost to hire one," he said. "We need one to help expedite these investigations."

The $10 filing fee would generate an estimated $5 million a year, according to Ward.

Both Gene Wunderlich of the Southwest Riverside County Association of Realtors and Paul Herrera of the Inland Valley Association of Realtors expressed support for the fee hike.

"This fertile real estate market has been a draw for fraudsters and scam artists," Wunderlich said. "They're starting to see that Riverside County is no longer easy pickings. This is a war we can win together."

Supervisors Marion Ashley and Jeff Stone favored the $10 fee, but seeing the opposition, compromised and sought approval of a $6 fee, leaving open the possibility of assessing the larger charge at a later time.

"I'm a strong anti-tax advocate," Stone said. "But this fee is going to generate money that will be fully utilized to protect the public."

Benoit agreed there was a compelling argument to at least double the fee and joined Ashley and Stone in supporting it, while Jeffries opposed.