Freddie Mac Officials Warn Renters Against Foreclosure Rental Scam

by 10 Oct 2012

(TheNicheReport) -- As the number of American families looking for rental properties increase, so do the number of nefarious individuals seeking to take advantage of them. According to a recent blog post on Freddie Mac's official website, swindlers are advertising the government-sponsored entity's Real Estate Owned (REO) listings and passing them off as rental homes. When hopeful renters get in touch with the grifters, they are usually relieved of thousands of dollars in bogus security deposits, advance rent payments and administrative fees.

Too Good to be True

Freddie Mac Vice President Joan Ferenczy and Director of Fraud Investigations Robert Hagberg posted the warning on October 8th. The apparent modus operandi is as follows: Scammers identify homes that have recently gone through the foreclosure process and that are listed in Freddie Mac's REO portfolio. These properties are managed under the HomeSteps program, which tries to set a standard of good practices with regard to foreclosed homes and other distressed properties. 

In some regional housing markets where rentals are in high demand, large families are looking for single-family residences rather than apartment units. The fraudsters preying on these hopeful renters are posting listings with rental amounts that are well below the market rate in order to make them more enticing. Victims of this wicked scheme are falling for the old "too good to be true" act of trickery. 

The HomeSteps properties are often in better shape than their counterparts found in the REO portfolios of private mortgage lenders. Freddie Mac has a vested interest in selling these homes, stimulating the U.S. housing market and curtailing neighborhood blight, and thus the HomeSteps listings are usually very attractive -but they are not for rent.

Stopping the Flim-Flam

The scoundrels perpetrating this latest rental scam take the publicly available information from HomeSteps to make a sham listing on sites like Craigslist, a busy hub for the rental marketplace. These homes may have had their "For Sale" signs stripped and their locks may have been changed in order to perpetuate the con. In some cases the swindled families have moved in, only to later be surprised by a visit from real estate agents or even deputies from the sheriff's office. 

Freddie Mac has called on its network of more than 2,300 real estate agents to be on the lookout for sham listings. Officials are working with online rental marketplaces to quickly take down fake postings. They advise renters to check the address of any suspicious rental against the listings in the HomeSteps website.


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