The California Department of Real Estate (DRE) revoked 633 real estate licenses for the fiscal year ending June 30, a 10% increase over the previous year and a new record.

The DRE is the state department that issues the licenses. In addition to the revocations, the DRE suspended 163 and reported 90 license surrenders. Total disciplinary actions by the DRE have increased 60% over the last three years, and the trend is likely to continue. More than 5,400 investigations have been opened.

DRE commissioner Jeff Davi said the deceit is taking a new form.

“Until recently, loan modification scams were the most problematic, but now we are uncovering schemes that center on short sales,” Davi said. “The DRE will continue to vigorously pursue and revoke the licensees of errant operators and get them out of the real estate business.”

The trend in scams seems to be following demand. When borrowers flocked to new loan modification possibilities under the Home Affordable Modification Program (HAMP), third-party companies charged desperate borrowers thousands for modifications they promised but never delivered.

Now, with the government’s Home Affordable Foreclosure Alternatives (HAFA) program taking hold and boosting demand for short sales, scam artists are beginning to take advantage.

Before HAFA was set to launch, lenders were building buffers to protect themselves from short sale fraud. The May cover story of REO Insider covered the impending trend. One agent reported an instance where the listing agent of a short sale also owned the property and intended to receive a commission on the transaction. He had a “straw” broker in place to conceal the fact that he was representing himself.

Davi urged potential homebuyers to log onto the DRE licensing database to check out real estate agents and brokers before employing them. The database shows whether they have a license, whether they’ve ever been disciplined or whether they’ve had their license revoked.

Write to Jon Prior.