Tuesday, May 12, 2009


Over the past three years, I have probably looked at 1,000 REO foreclosures in the Denver metro area. I've seen (or smelled) everything, from abandoned pets to smashed out drywall to bathrooms flooded on the way out the door.

And so, invariably, conversations with many of my clients come around to the "foreclosure market" and the trials and tribulations therein.

We know that everyone has keys to these homes, that window coverings, dishwashers and ceiling fans "disappear", that the banks won't convey appliances ("if they're still there at closing, it's a BONUS")... but I'm increasingly shocked at how brazen people have become with rental scams.

The Federal Trade Commission recently issued a warning that online rental listings are often used as ruses by fake landlords to filch funds from unsuspecting renters. The warning states:

“These scams play out a number of ways. Some scammers hijack a bona fide rental or real estate listing by changing the e-mail address or other contact information, and placing the modified ad on another site. The altered ad may use the name of the person who posted the original ad. Other rip-off artists make up listings for places that aren’t for rent or don’t exist, and try to lure you in with the promise of extra low rent. Their goal is to get your money before you find out."

I've also heard of cases where people in the final stages of foreclosure rent out their homes, sometimes to multiple parties (with staggered move-in dates), collecting first and last month's rent (plus security deposits) before heading out-of-state with the loot.

There is a lot of desperation in our economy, and sometimes it manifests itself in ugly ways. You must keep your eyes wide open in dealing with people you don't know. You need good counsel in making financial decisions, and you need to align with people who will protect your interests.
I'm amazed at the creativity of scammers, and the willingness of the scammed to go along. Now more than ever, we all need to keep a heightened sense of awareness about who we are dealing with when we pick up the phone or tap on a keyboard.