Nielsen was able to recoup $143,410 in lost equity from Wright and Hurst, but it came more than two years after purchasing the home.

"It was a miserable time," Nielsen said. "I learned a lot of things in the whole process. A lot of times people think, 'My friend isn't going to take advantage of me.' In the loan documents, you want to make sure that all of the paperwork is there. You need to take the time and go down through each thing in the paperwork and make sure you understand it."

Nielsen's story is not new. Utah has a long history of investment rip-offs. In 2007, the state's residents can expect to see more schemes, with real estate scams topping the list, according to the division's top 10 investment scam predictions.

Real estate scams include:

• Promoters who use credit scores of investors to buy and sell homes.

• So-called "hard money" lending that is used to finance high-interest home loans.

• Investment scams in which promoters solicit an investor's home equity to make an investment.

Klein said hard money lenders promise investors 2 percent to 4 percent interest per month, with the guarantee that the money is secured by property.

"They say it is secured by the property and yet if you go look at the county recorder's office your name shows up nowhere on the trust," Klein said. "It is a very big scam."

The second most popular scam Utahns appear to be falling for is note brokering, in which companies advertise on the Internet and on television infomercials about how to purchase real estate notes at a discount, list them on a Web site sponsored by the company and resell them at a profit.

The businesses that advertise note brokering charge steep fees for the courses, Klein said, but fail to tell people that they need to be licensed by the state.

"I would not do that, nor would I recommend anybody to be involved in those kinds of situations," said James Wheeler, senior vice president and assistant branch manager at D.A. Davidson & Co., a Montana-based brokerage firm with offices in Utah. "It appears that (companies) are making their money off the course."

Klein said: "If the investment is passive and you're relying on someone else's expertise, then it is a security and they need to be licensed. Anybody offering an investment has to be licensed."

Aside from the more mainstream scams, there is a flurry of computerized models and investment tools that promise money to investors by buying and selling options, Wheeler said.