Fraudsters posting foreclosures as fake rentals

Freddie Mac’s fraud unit is teaming up with real estate professionals to sniff out bogus rental ads of foreclosed properties.

“We’re hearing more reports about fraudsters trying to cash in on the housing crisis’s remaining foreclosed homes by advertising them as rentals on the Internet,” a Freddie Mac blog post warned about the Craigslist rental scams.

The scam works like this: After a house is sold at foreclosure, a scammer then posts an ad online trying to rent out the home before the new owner moves in. Interested renters then contact the scammer about leasing the property. They are asked to submit their personal credit information for the lease application as well as two months of rent.

It’s often not until the would-be renters try to move in that they realize they’ve been duped. The key to the house doesn’t work, they find the house is for sale, or that the previous owners are still living there.

There have been some cases where scammers change the locks in the house and give the renters a working key. It’s the real estate listing agent who then often discovers the renters living there and the scam.

Freddie Mac and real estate professionals suggest verifying a rental home’s status through a listing agent or through county records.