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Beware: Impostor landlords targeting Freddie Mac REOS

Written by on Wednesday, 07 November 2012 6:00 pm

In today's rental market, it's necessary for renters to be just as vigilant about vetting the landlord, as the landlord is about pulling background checks on renters.

Scam artists masquerading as landlords are trying to cash in foreclosed homes by advertising them as rentals on the Internet.

Once the pretend property owner has your money, he or she is off to another real estate ruse and you may not learn you've been taken until your fully-loaded moving van pulls up to the home.

In some worst-case scenarios, the lying landlord managed to get the locks changed and the tenants actually move into the property, only to be summarily evicted by the real property owner.

Talk about that sinking feeling.

Vet your landlord - especially if it's an individual advertising on the Internet, says Joan Ferenczy, Freddie Mac's vice president and Robert Hagberg, Freddie's associate director of fraud investigations.

Freddie Mac holds approximately 53,000 properties nationwide that are either for sale or under contract.

The property-for-rent ploy

Freddie Mac says here's how deceptive delinquents dupe would-be renters:

Once Freddie Mac forecloses on a home, the flimflam advertiser posts it for rent and tries to nab a tenant before it can be sold to a new owner. Craigslist is a popular haunt for these swindlers.

Potential renters, who contact the crook about the ad, must submit personal credit information and two month's rent, as part of the lease application.

The jig is up when the unwitting mark attempts to move in and discovers he or she doesn't have a working key, the house is for sale, the previous owners are still occupying the property, or worse, all of the above.

Not only is the victim out of a home and perhaps a few thousand dollars lighter, the miscreant has made off with personal credit information he or she can use to steal the victim's identity and commit acts of identity fraud

The grift isn't new, just persistent.

Earlier this year, property managers and real estate agents reported rental scammers working both sides of the street .

Imposters not only fake properties for rent, fake renters also run a game on landlords - in both the long-term traditional rental market and the short-term vacation rental market.

Freddie Mac's fraud unit has joined forces with some 2,300 real estate agents who list Freddie's HomeSteps homes. Freddie enlisted the agents to help identify and quash bogus rental ads.

Unmasking phony property owners

To spot landlord come-ons, again, beware and follow Freddie Mac's guidelines, and others included here.

• Never rent a property sight-unseen. Your desperation makes you vulnerable to a host of housing-related scams.

• Know the going rate for rents in your area. A property listed with a below-market rent is a red flag.

• Determine if the property is for sale. Web search the address and phone number in the ad, check the multiple listing service in the property's area and drive by to check for a "for sale" sign. reveals if Freddie Mac owns the property. Report rental fraud by immediately calling 1-800-4FRAUD-8 (1-800-437 2838).

• 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 the advertiser tells you not to call the listing agent.

• Verify who owns the house by checking with the county recorder or other public records office. Public records, more and more often, are available online.

• Verify the landlord's identity. A government licensing agency regulates licensed property managers and real estate agents. If the landlord is an individual property owner who won't take the time to verify he or she is the property owner, he or she probably isn't a landlord you want. Nevertheless, don't take the landlord's word for it. Obtain independent verification. Ask to talk with former tenants or otherwise determine the landlord is the property owner.

• Refrain from sending personal credit information over the Internet. Never send personal information over the Internet until you have independently confirmed all of the facts about the rental property and it's owner.

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  About the author, Broderick Perkins

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.