Rental Scams Continue. Now with REO Properties.

A few weeks ago I touched on the rental scam happening on Craigslist.

A new approach by the scammers now involves REO properties.  As reported by the National Association of Realtors…

The scam works like this: After a house is sold at foreclosure, a scammer then posts an ad online trying to rent out the home before the new owner moves in. Interest renters then contact the scammer about leasing the property, and they are asked to submit their personal credit information for the lease application as well as two months of rent.

It’s often not until the would-be renters try to move in that they realize they’ve been duped: The key to the house doesn’t work or they find the house is for sale or even that the previous owners are still living there. There have been some cases where scammers change the locks in the house and give the renters a working key. It’s the real estate listing agent who then often discovers the renters living there and the scam.

Freddie Mac and real estate professionals are working together to find the fake Internet rental ads. When they do, they are having the ads removed immediately. They’re also warning renters on how not to be duped from the ads, such as always verifying the home’s status through a listing agent or through county records.

Here are a few tips from Freddie Mac for protecting yourself as a potential renter:

  • Check if the property is for-sale. Google the address to see if the property is listed or drive by to check for “for sale” signs in the yard. (Check HomeSteps.com to find out if Freddie Mac owns the property. If we do, report the rental ad by calling 1-800-4FRAUD-8.)
  • If there is a “for sale” sign or online sale listing, call the listing agent immediately to confirm the status of the house. (Be suspicious if you’re told by the advertiser not to call the listing agent.)
  • Verify who owns the house by checking the county land records, which are usually available online.
  • Never send personal credit information over the Internet until you have independently confirmed all of the facts about the rental property being advertised.