Attorney General Jerry Brown announced today arrest warrants for five people allegedly  getting homeowners in foreclosure to pay $10,000 and save their home by deeding their property to a “land grant” company. 

The Federal Land Grant Company, run by Bill Hutchings and wife Xiaoke Li out of San Diego, reportedly attached a survey of the Spanish Land Grant of 1872 and said the deed reinstated the land grant. More than 300 properties were transferred to the company in San Diego, Riverside, Los Angeles, Orange and San Bernardino counties, Brown said.

The San Diego District Attorney’s office and FBI agents served arrest warrants and three search warrants at one of the company’s seminars in San Diego on Wednesday. Among those arrested: Hutchings, 62, Li, 43, Edgar Martinez, 30 and Diego Gil, on charges of conspiracy, grand theft and deceitful practices. Another warrant was issued for Shawna Landis, 29, of Sorrento Valley.

Brown offers this gem to those who think a land grant could protect them:

“There hasn’t been any legitimate use of the land grant since the conclusion of the Mexican-American war,” Brown said. “If some fast-talking scam artist offers a quick escape from foreclosure using archaic documents, be extremely suspicious.“

Amen.

It’s time for our Broken Dream Home feature, where we unleash our frustration on the market on a poor, hapless soul who bought into the feverish buyer market of the last three years. Today’s broken dream home is a beauty in Vacaville: a 4-bedroom, 2.5-bath, 2,663-square-foot Edwardian charmer sitting on the market for 203 days (that’s almost 7 months.) It’s only been reduced once, on Nov. 13, from $749,000 t $719,000.

I think its time on the market says that no one will pay that price for the house. The owners sure didn’t in 2006.

Doing my research via PropertyShark and Ziprealty, I found that the house was bought April 14, 2006 for $699,000 by the family that now owns it. The family before that bought the home in 1996 for $240,000, which almost tripled in 10 years. They made out like bandits.

I don’t think it will be the same outcome for the current residents who look likely to lose money on the home. However, if you do buy the house, there’s a chance you may get your own weenie dog (dachshund) to guard the back yard.

I’m sure you saw this on Inside Edition, the Los Angeles Times or even WSJ. We are all a big too into schadenfreude, are we not? Oh, yeah, we are. I feel better cashing in my plastic bottles to buy groceries if I know that Jose Canseco is living in a modest house and owes $2.5 million to Washington Mutual. Read on and on:

“I do have a judgment on my home and it to me is very strange because it didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else,” he said in an interview that aired Thursday.

“I live in a much smaller home. I’ve got way less than I had before,” Canseco told INSIDE EDITION’s Jim Moret. 

Jim Moret asked Canseco, “Are people thinking, ‘Hey if this can happen to Jose Canseco, it can happen to me’ ?”

“It’s happening to anyone and everyone,” was Canseco’s answer.

Maybe his new book, Vindicated, will help him pay the rent.

So, you found your dream house! Excellent!

But what do you know about your neighborhood? Hopefully, you investigate before you buy.

My intrepid reporter friends, especially those with children, love this Web site, Megan’s Law,  and will not buy a house without analyzing it repeatedly.  (California only.)

The other one, although not as informative but can be cathartic for some, is RottenNeighbor. Some samples are “Nutcase Lives Here” or the more common “Barking Dog.”  (For maximum hilarity, look at the little red houses in Clayton.)

Check out what people have to say about you your friends’ neighborhoods. Brace yourselves!

It’s time for our semi-weekly feature and today we visit the beautiful city of Livermore. Yes, the I-580 may be murder during rush hour, but this house on Cindy Lane is *thisclose* to Lawrence Livermore National Laboratory. You might be able to walk it, as long as you have security clearance, that is.

This 2,064-square-foot, three-bedroom, two-and-a-half-bath, single-family home was built in 1989 and is selling for $699,000.

OK, maybe it’s a good deal, but then you realize it has been reduced three times in the last year (yes, I said year) from a high of $810,000 in February 2007 to $699,000 just last month. Sad part? The previous owners paid $780,000 for the property on June 9, 2006.

So that adds up, if the house does sell for $699,000 which  may not happen, to a loss for the present owners of $81,000. Congratulations, Cindy Lane, you are this month’s broken dream home!

It’s time for my regular feature that delights real estate agents everywhere!

 Today’s home is in Vallejo, which has some of the highest rates of foreclosure in the nation. It’s a cute golden, two-bedroom, one-bath bungalow offered for $171,100 by Re/Max Gold. It’s on a 3,267-square-foot lot with a guesthouse in the back. (The price, incidentally, is the lowest in Solano county for a single-family house.) 

History from Zillow and PropertyShark show the house was initially sold in May 2002 for $185,000. The formerly little gray house (from the aerial photo on Zillow) was sold again 7/29/2005 for $320,000 — which was a 73 percent profit in three years, or essentially a gain of $45,000 a year.

Unfortunately, this is called “Broken Dream Home” after all, and the owners lost the home to foreclosure in October. (It’s marked as “Sold” for $274,350 to HSBC Bank USA, according to PropertyShark.) Now the house is being offered at a 37.6 percent loss and even less than its selling price in 2002.

 Congratulations, 420 Louisiana St., you are this month’s broken dream home!

Today’s Broken Dream House comes from San Ramon — where suburbia meets the freeway interchange.

It’s a “doll house” at 1,452 square feet, with three bedrooms and two baths. The asking price, after 194 days on the market is $719,000.

The history on this house, built in 1978, starts with its first resale in 1992 for $250,000. It was sold again in 1997 for $247,000 to Gregory V. and Kathryn M. Didion, according to PropertyShark.

They, in turn, sold it to its current owners, for $730,000 in 2006. That’s a 195.5 percent increase in 9 years, or approximately $53,667 profit a year just for living in the house. Wow!

Of course, that was the height of the market. Its current owners aren’t so lucky trying to sell in 2007. Their $730,000 house is now on the market for $719,000, a loss of $11,000.

Congratulations, you are today’s Broken Dream home!

What’s not to love about Crockett?

There’s the view, the C&H sugar plant, the vertigo-inducing streets . . . And this house.

This three-bedroom, two-bath, 1,564-square-foot house has a view, updated kitchen, two wood-burning fireplaces, two patios and a wraparound deck where you can see this great view of your neighbor’s backyard and telephone poles. Excellent!

On sale for $490,000 (down from $510,000,) this house once sold in November 2005 at $537,500. That’s a loss of $47,500, or the equivalent of a part in a Will Ferrell movie!

And after 113 days on the market, the price may be going down again. Congratulations, 494 Clark St., you are this month’s Broken Dream House!

You may recall this home I wrote about in August.

According to Zillow.com it was sold just before Xmas 2005 for $675,000. Eight months later in August 2006, the home was bought for $839,000. Now in 2007, its current owners, who have owned it for a year are trying to sell, at first for $879,000 — then $849,000.

The first buyer made out very well, a $169,000 profit (that’s more than $20,000 a month!) but the last owner who bought in 2006 at the height of the market will not be seeing that kind of profit.

Apparently, the owners have come down from their previous price of $849,000 to $799,000, meaning they have lost approximately $40,000 on this flipping wonder.

Congratulations, you are the Broken Dream Home of the Month! Again!

Broken Dream Home’s 1st Law of Real Estate: Real Estate is not a short-term investment.

My story today about the Polk house for sale, highlighted a segment of real estate few people talk about. Yet it’s one many people deal with on a regular basis.

Most deaths that occur in the house are natural deaths of people who may have lived there for decades before finally dying there. With more and more people using hospice services and preferring to die at home rather than a hospital, it will probably be more commonplace.

One Alameda listing even stated recently “a natural death occurred in this house.” I think being upfront helps everyone. Could you imagine not finding out until a few months after you bought your house that it was the site of a grisly murder? While it may not affect everyone, I think it would bother me.

That said, I visited the Polk house and I didn’t feel creepy or weird. I even sat in the poolhouse talking with the agent and still no bad vibes, but then again, I’m not buying it.