Rental Scams: Don't Fall For Them

One of the downsides of all the home listings on the internet is the abuse of them by hijackers.  They

go to sites such as Zillow and Trulia, choose a property and turn a legitimate listing into a so-called rental ad, with the listing agent not finding out until he/she receives a bunch of phone calls about a "rental".  In a very expensive and limited rental market, a renter is doubly frustrated when finding out that the seemingly good deal is too good to be true.  So not only is it a waste of time for those searching for a rental property, it's also an extreme annoyance to the listing agent whose listing is illegally used as a dupe and all the misdirected phone calls, as well as the time it takes to correct the situation on the listing site. 

The smarter people knew before they called me that $1200 per month rent for a 2800 sq. ft two-story house in a nice neighborhood of $500,000-$600,000 selling prices was suspicious, but they called me anyway after they drove by the property.  Some actually called the name given on the fake rental ad, which of course used my listing photos and information as if it were their own, and were told to send money before they would be given any more information.  This is the tipoff--a legitimate landlord or management company does not request money, i.e., security deposit or rent, up front for information. 

And another scenario may be that the rental does not exist at all.  Yet another is a rental sign in front of an actual advertised property that is for rent, or it may be a bank-owned property for sale.  In this situation the false advertiser is attempting to get business by re-directing prospective renters to actual rentals--one company has been complained about in California, yet they popped up again with their red and white rental signs on wooden stakes posted on properties that are not their rentals. 

For more information, contact the Federal Trade Commission.  Avoid sending money to people you don't know.

Are You a California Owner of A Timeshare Property? Beware of Fraud

Timeshares . . . can be a flexible vacation option for many people.  It's a form of property ownership shared with other owners, usually for resort condominiums and vacation home purposes, and can often be utilized in various states and even countries, and offer cheaper accommodations than staying in a hotel or B&B for a week.  The downside is, timeshare ownership may be tough to sell in a down market; there just isn't a huge demand for it when money is tight and/or the market values have declined.

The California Department of Real Estate has just issued a warning and consumer alert concerning the latest wire transfer fraud schemes being perpetrated on timeshare owners. 

Beware of websites, or any other marketers, promising and to buy or help you sell or rent a timeshare, after an upfront fee is paid.  Scammers are requesting payment by money order, wire transfer, bank cashier's check, or upfront cash by the victim, after which they disappear and no further sale or rental of the timeshare takes place.  Vacation timeshares are popular in California, Hawaii and Florida, but properties owned in Mexico are popular targets right now, so avoid dealing with telephone calls or e-mails.

Do not fall for something that sounds "too good to be true", and the DRE advises the owner to contact the timeshare resort developer concerning the communications he/she may be receiving.  The DRE states that amounts wired by gullible owners range from $3250 to $85,000.

Beware of any requests for upfront money to be wired to anyone's account for work not yet done!

Here is more information about who to contact and what you can do if you have been scammed (i.e., the California Attorney General; local district attorney and law enforcement; FTC; FBI, and others.

And, please be aware that in California, proper licensure for upfront fee payment must be obtained.

Please don't let yourself be taken in by fraudulent schemes.

What is a HAFA short sale?

Short sales have not gone away by any means.  Although the number of actual short sales for residential properties has decreased greatly just since the beginning of 2012 in the south Los Angeles County/north Orange County region, the number of homeowners estimated to be in an "underwater" value position is about 25%-30% of the market. A search in today's MLS in the City of Long Beach, out of 492 active residential listings, about 71 are listed under short sale conditions, or about 14% of the active market.  Interestingly, the number of short sales in October 2012 compared to October 2011 has actually increased by 28% overall in the same general region, with short sales being about 6% of the combined market in all the local cities of this local region.

There are, however, reasons for a decline in short sales, one of which is there is still a great number of owners who go into foreclosure without ever attempting to list their home first; next, some do list their home but are unsuccessful in selling before the bank takes it over.  Nationally, more than 7 out of 10 homeowners go into foreclosure without visible intervention.

Currently, there are over 100 lenders participating in the HAFA (the government-subsidized Home Affordable Foreclosure Alternative), including Citimortgage, Bank of America, Wells Fargo, and many servicers.

For a homeowner to participate in this program, there must be certain requirements met--your home must be listed with a local real estate agent, and the necessary documents must be submitted before December 31, 2013, and close by the following September of 2014.  First, it must be a loan other than one by Fannie Mae or Freddie Mac, or insured by FHA, or the VA.  It must be a first trust deed originated before Jan. 1, 2009, and the loan amount for a house or a condo (1 unit) must be under $729,750. The borrower must comply with the specific timelines in this program. The borrower may have more than one property approved for sale under this program, but cannot have purchased a property in the last 12 months..  Last but not least, the borrower must be in a hardship situation.

Now, HAFA will not apply to all borrowers because about 60% of California's mortgages were issued under Fannie Mae, which is excluded from HAFA.  (But Fannie Mae and Freddie Mac also have hardship program, please contact me for information.)  The bank or servicer may not attempt to collect any additional sums (i.e., cash or note) from the borrower after the property is approved for a HAFA sale, and the bank may not complete a foreclosure sale if the borrower complies with the HAFA sale terms.

There's about 9 steps to complete (including close of escrow) to go through a successful HAFA short sale.  What are the pluses? You may have some financial incentives to move under this program, and you may also be able to obtain a release of your second lien. 

Are you being scammed?  See this video here for the 5 basic trouble signs you want to watch out for.

The same banks have their own "cooperative" short sale programs which are similar to the HAFA program; currently Bank of America in particular is doing an outreach to certain borrowers.
For more specific information see Making Home Affordable and a HUD telephone number to call for housing counseling. 

This is a sale which requires the assistance of a real estate professional.  Please contact me for more specific information which can be e-mailed to you about this program.  Please remember you may have other options (do you think you still have equity in your property? that actually happens), and there are other short sale programs being offered right now, some of which offer a great deal of cash incentive to the borrower, so please call me about the HAFA or any other short sale program. Don't let your house go into foreclosure if you can possibly help it.

Julia Huntsman, 562-896-2609

Borrowers are always advised to seek advice from their tax and/or legal professionals.