rental fraud
Our Mortgage Fraud Task Force has continued to meet - and meet with some success. We have now had a meeting with our District Attorney, Rod Pacheco, and have had meetings and conversations with members of his White Collar Crime task force that encompasses Real Estate Fraud. Our initial concerns regarding their apparent lack of involvement have been somewhat assuaged. Although we have yet to see an indictment handed down against any of the perpetrators in our area, we have been assured that they are actively working on it.

We are also attempting to provide mls access to the DA as a means to expedite their evidence gathering. This matter is trickier than it might appear at first blush as we can't be in a position to just open our database and allow law enforcement or anybody else to just have a field day with Realtor records (even though seemingly every half-wit website in the country can scrape it at will).

The classic mortgage fraud scam illustrated in prior posts, overbidding asking price by $100k+ and skimming the difference, has morphed now that our market has collapsed. In addition to  short sale, foreclosure and credit repair scams, we are seeing a huge surge in rental scams. Elizabeth Weintraub from Sacramento pointed out one of these schemes involving Craigslist - but that is just one of many.

One we are starting to see frequently is where an individual will access a bank-owned home and advertise it as a rental at very attractive rates - typically $200 or so under market. Due to the large number of people here who have lost their homes to foreclosure and are having trouble finding a rental, this deal looks very attractive. The scamster will then arrange meetings over the course of a couple days meeting prospective renters, signing paperwork, giving them copies of keys and taking their first and last months deposit. In the most egregious of these we have uncovered so far, the perpetrator rented the same property to 15 different people, pocketing $3,400 from each. It was only when multiple families started showing up with moving vans a couple days later they discovered they had been duped. Not only did they not have a place to live, many were now out of a previous apartment or lease and were also out $3,400 in hard earned money they didn't have to spare in the first place.

We are also seeing a big upswing in renters finding out their house is being foreclosed on and they are getting evicted. In many cases the owner was already delinquent when they rented the property, or he stopped making payments as soon as they moved in. 6 or 7 months later they awake to a notice tacked to the door notifying them of trustee sale, move out. They have no rights and no recourse except to try to find a new place ASAP and move. Meanwhile the owner has not been making house payments for 7 months as well as pocketing the rental income. Many times this owner has already purchased a new home showing this one as a rental with the full intention of taking whatever cash they can and walking. In some cases the owner has even threatened the renter with legal action if the renter stops making their payments in spite of the fact they are being evicted.  That takes balls.

If you are in a position to advise rental clients, please let them know 'if it looks too good to be true...' and be careful about renting a place from a Guido who meets you at a property with a dead lawn on Wednesday afternoon. Doesn't take a Karnac to see the answer to this one.
Gene Wunderlich - Selling Southwest California Homes including Temecula, Murrieta & The Southern California Wine Country
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6 Comments on Rental Fraud - Advise Prospective Tenants to Be Wary!

MAY
07
2008
122,852 Points 2 Featured Posts Localism Sponsor Outside Blog
Gene.....we are hearing stories in our area about this happening and it is pretty scarey.  thank you for the update and post.
12:22am • #1
269,220 Points 4 Featured Posts
Gene - Thanks for the info. I've had a couple of calls from people renting who found out the home they were renting is being foreclosed on, and they want to be preapproved to try to buy it instead of having to move and displace their family. Another piece of this sad puzzle...
12:30am • #2
597,029 Points 106 Featured Posts Localism Sponsor Outside Blog Hit Router
I really hope that law enforcement makes examples of these low lifes.
2:09am • #3
1,501,742 Points 355 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Gene...

The problem is that in most cases law enforcement does not take these crimes seriously. In most cases, these predators are clearing much more money than they could in a bank robbery, yet they are treated as petty thieves,

I'm glad to see that law enforcement in your area is on top of the problem, hopefully their example will be followed in other jurisdictions.
6:44am • #4
223,809 Points 35 Featured Posts

Unfortunately LOCAL law enforcement is totally ill-equipped to deal with crimes of this nature and our DA is just coming to the table and is overwhelmed. With the rental scams, we become aware of these after the fact, as do the victims, and there is little hope of catching the perpetrators who have pocketed their ill-gotten gains and moved down the road. One can only hope that the same 'renter' shows up at another site where the same guy is working the grift and beats him within an inch of his life and then holds him for police. Otherwise we will only defeat these scum through education and public awareness.

6:01pm • #5

Gene,

Thanks - I ran across your blog doing some background for an Association I am trying to put together here in Indianapolis that provides accreditation and a code of standards and ethics to anyone person or companyy involved with homeowners in distress.  Would especially like to put some type of oversight into private investors because it is literally the wild, wild west and there is no sheriff in town.

I ended up spending some time on your other blogs and found them intelligent and humorous.  I see we have a lot in common.  Check out the blog I wrote today about estate taxes and the massive wealth transfer this country is going to see in 2010 and tell me what you think!
7:27pm • #6

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