Do Not Buy, Rent, Rent to Own, Or Sell a Property Until You Read This
Since the real estate market crash, fraud is at an all time high. The only way to protect yourself is to learn the signs of a scam and the recent laws and programs put into place to help victims. There have been 398,604 tenants evicted from homes already this year due to landlords in foreclosure and that number is growing daily. Most of the time when this happens, the tenant is completely unaware that their home is in jeopardy. This is called rent/equity skimming. It is a felony in most states and can be prosecuted.
Now to back up a little let me explain how and why this is happening. The first and most wide-spread reason is simply that these property owners are victims of bad loans. Their mortgage arms come due and without being able to refinance they are faced with foreclosure. At first they may try a loan modification, if they use one of these ‘companies’ many times they don’t work and they end up losing up to $2000, just to let the someone else call their bank for them. Even if the property owner is smart enough to go to the bank themselves the statistics on these are so poor that it only helps 6% of all property owners in the United States. After a modification fails, they try to sell, however, in most of these cases, the property is worth less than they owe and with the tightened lending markets, there are even less buyers which make their chances of selling even slimmer. Eventually the property owner gives up and moves’ knowing their ill fate is Foreclosure then Bankruptcy. However, since foreclosure takes several months, some property owners decide to rent the property out until the bank takes it back. The renter moves in and pays rent each month until they get the foreclosure letter from the bank saying that the owner has not being paying on their loan. The tenants in complete shock are quickly evicted by the bank. Even worse, some property owners offered a rent to own/lease option with the tenant and collected between $3000-$10,000 dollars up front. Since the property owner will be forced to file bankruptcy with the foreclosure, the tenant will never be able to get their ‘option money’ back. The owner of the property is simply angry and is trying to get some money back on their investment they will lose.
If you think that’s bad, just keep reading it gets worse. The next Real Estate scam is called a ‘Renter Shark”, this person, drives through a neighborhood, finds a vacant property. Breaks in and changes the locks, sticks a ‘for rent’ sign in the yard and then rents the property out. The tenants rent/lease option a home from a criminal, and then one day, someone stops by for the bank and finds people living in the home and evicts them. Again complete shock to the poor family/persons living in the home that will now be displaces and probably financially strained.
The good news is that there have been new laws put into place to help protect renters. There are other scams but, these are the most common right now. They are felonies in either case and will be prosecuted.
To learn more about these scams and how to protect yourself go to: Protect Yourself From Real Estate Fraud.Com