Dozens of real estate professionals – people who have been charged with real estate-related crimes or sued by the state for fraud- related misdeeds, or who have pleaded guilty to such wrongdoing – who are still licensed and have no notations, flags or disciplinary sanctions listed on their records with the Department of Real Estate. This means they are authorized to sell homes and originate mortgage loans.

The number of alleged and admitted criminals still licensed by the state could be higher.

Law enforcement agencies and prosecutors said they were unable to provide a list of all people charged with mortgage fraud over the past few years. A local Sacramento Newspaper looked at 2010 press releases from the U.S. attorney's office and the state attorney general's office and past news reports to compile a list of people who had been charged with a real estate-related crime or sued by the state in recent years.

The paper then ran those names – about 260 total – through the Department of Real Estate's licensee database and used other public records to confirm their identities.

At least 45 of the accused or convicted wrongdoers were listed as licensed brokers or salespeople by the Department of Real Estate, and consumers would have no way of knowing of the accusations. Another dozen have had their licenses suspended or revoked. The remainder either did not work in the real estate industry (borrowers who lied on mortgage applications, for instance), did not have a license or had an expired license. 

Convicted but licensed.  So what does it take for a California real estate broker to lose his or her license? Real estate department spokesman Tom Pool said the agency is required to take certain steps before suspending or revoking a license.

The process starts with a complaint or accusation, which leads to legal filings by both department investigators and the accused. Then comes a hearing before an administrative law judge, who issues a ruling. That ruling goes before the real estate commissioner, who accepts or rejects it.

"We can't use the arrest or the indictment as the basis for disciplinary action. We have to wait for the ultimate conviction," Pool said.

Yet some of the people listed as licensees in good standing already have pleaded guilty to mortgage fraud-related crimes.

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