Rent skimming and other foreclosure scams - Home Owner Beware.

FinanceMortgage & Debt

  • Author Dan Havey
  • Published December 11, 2009
  • Word count 1,136

Real Estate & Mortgage 8 - Foreclosure Meltdown Fraud and Scams Dec08 â€" Foreclosure Sharks & Scams

Part 8 (Excerpt)

Rent skimming and other foreclosure scams â€" Home Owner Beware.

And what rent skimming is, a shark as I like to call them, a shark will go out and find a vacant house, and they will go in and change the locks and maybe clean it up a little if need be but then they will rent it out to somebody. They will move that person into the house, they will get their $1,000 or $1,500 a month rent payment on the house, and 3 or 4 months down the road the repo man comes knocking on the door and says, hey you have to get out. He says this to the tenant of course and the tenant says, hey you don't own the house, and it turns out that the guy that they were paying rent from for the last 3 or 4 months didn't own the house either.

So you are talking about somebody, a shark, who goes out and finds a vacant house, breaks in, changes the locks, cleans it up, puts it up on Craig's list and rents it out and collects the money. He never owned the house, he never had any rights to the house, then all of a sudden the sheriff shows up and says you have to go. How can that be legal? Well it's not legal; it's not legal at all. Because the person who rented you the house knows that they don't own the house, now of course the tenant doesn't know that.

Now under Fannie Mae's new guidelines, that tenant, if they are lucky enough to have Fannie Mae own that property, or own that note, you may actually get to stay in the house because Fannie Mae has some new guidelines that if they have a tenant in the house, they will re-sign a contract with them and let them stay in the house. It didn't say how long but they will let them stay in there for a while.

Wow, that is fantastic. I actually didn't know about that, so Fannie Mae is getting into the property management business. Yes, our government is now becoming a landlord as well as the entity that likes to just hand out trillions of dollars. I believe that you and I have a differing of opinion on this, Dan. I actually think that that is the right thing for Fannie Mae and Freddie Mac to do, primarily because if they sell right now they will sell at a huge loss and they have an opportunity to pick up some capitol at some point, don't you think?

Well, I don't know, it all depends on whether property values keep going up or property values keep going down. But the real issue becomes, is our government in the business of owning real estate? And we can argue about this all day long. There is no need to; there is too much other information you are going to talk about, too many other sharks out there.

What is the crime, I mean realistically, some guy goes in, breaks into the house. Sounds like its breaking and entering to me, then he is collecting monies on a vacant house and well there are a number of crimes, I have to admit I don't have the statute with me but I do know in Arizona there is a statute specifically about this very practice. And that would be Terry Goddard's website? I would suspect that you could go there and find it.

But real quick here before we run out of time, there are two other quick things I wanted to talk about one just happened to a friend of mine recently where her daughter moved out of a house that she had been living in for years and she moved to another state and the house went vacant. Well, she hadn't been gone for more than a few weeks and the mother, who was going to help her work on a short sale, went over to the house one day and found that the locks were changed.

And I immediately think, Oh, Oh we're dealing with a rent skimming situation here. Well it turns out the lender, who does not own the house yet, because there has not been a foreclosure sale, came by, saw the house was vacant, opened the door, changed all the locks on the house and now essentially is not really willing to give the keys to the owner. I couldn't quite figure that one out, especially when I found out that two weeks later they still had not gotten the keys from the lender.

So just be careful of that and the one thing I want, the last thing I will talk about is that a buddy of mine works repos over in California and I think its happening here a little bit, where what will happen is when you are in a foreclosure situation you will have all kinds of people knocking on your door. Some of these people want to come by and buy the stuff out of your house.

Now there is certain stuff you can sell. Anything in my mind that is not physically attached to the property you can sell. Stuff like a washer, a dryer, and a refrigerator, you can sell that stuff. But you are really not supposed to rip the cabinets off the wall, or rip the pipes out of the wall, and sell it to somebody who is coming by knocking on your door offering you $1,500 for everything in the house. That is what is going on in a lot of cases in California; in fact they are completely trashing houses.

Now the other thing you have to look out for is you are obligated under your deed of trust to not destroy the property when you leave. So I am just putting that out there, just be really careful when these people come by and offer you some money and you are hurting for it, just be really careful because you don't want to trash the house before you leave.

And that is really good advice. They can come after you, maybe they will, and maybe they won't. But that does not matter you are committing a crime; you just should not do it. And the other thing if you think you are maybe involved with a rent skimming scheme you can go to maricopacounty.gov and see who actually owns the property. And again if you think that you are having trouble you obviously want to call the Attorney General's office and talk to them about it if you think that in anyway that the person you are writing that rent check to doesn't own the property...

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