This has become a more common problem for people who file for Chapter 7 bankruptcy (and who have lost or will lose their home through foreclosure). Even if you have not filed bankruptcy you need to be aware of this scam if you’re seeking to rent a house, especially in the Fresno area and Central Valley.
Chapter 7 (13) bankruptcy filers often believe that since they gone through bankruptcy or have lost a house to foreclosure their house rental options are limited. They feel they have a scarlet letter printed on their rental application, so they more often fall victims to this increasing scam. They are in the mental position of “I’ll take what ever I can get” – and the scam artists know this.
The scam works like this: A prospective tenant approaches a landlord who is advertising a great deal; the tenant explains their financial situation (including the bankruptcy and foreclosure), or the landlord does not ask. The usually ask the landlord: “will a bankruptcy stop me from renting a house.” Legitimate landlords will usually dig deeper into your application, but the scam artists won’t.
The tenant pays a first, last and security deposit. All is good. They move and settle into their new home.
What the landlord does not tell them is that the house or apartment complex is in foreclosure or about to start the foreclosure process. One a Notice of Default is filed it takes about 4 to 6 months before the tenant realizes the situation (foreclosure notices are often sent directly to the house, real estate agents or other representing the mortgage company my contact you about vacating the premises.
The landlord seeing the writing on the wall is just going to collect the rent and not pay the mortgage.
Weeks or months later, you receive notice that the house is being foreclosed upon and that within weeks or months the Fresno County Sheriff (or whatever county you live in) will be locking you out of your new rental house.
In many instances where my Fresno bankruptcy clients have later told me about this scam the “owner” knew before he rented the house that house was destined to be lost in foreclosure and all of the rent and security deposit went direct into the landlord’s pocket – not the mortgage company.
Even though the tenant may not have lost pre-paid rent since it takes somewhere between 30 to 90 days to evict a tenant following a foreclosure (trustee sale), the tenant is stuck with having to move again – paying another deposit, moving costs, loss of work and family time and the emotional and physical frustration of finding a new (and acceptable place to live – think school district or distance from work).
To make sure the house your about to rent is not in foreclosure check out the county recorders office (its public information) and check the property’s status. If there is a Notice of Default recorded – run, don’t walk away from this “opportunity.” You can also check out this site www.RentalForeclosure.com, a free site for this purpose.
Disclaimer
Fresno-Bankruptcy-Lawfirm.com is owned by the Law Offices of Jeffery D. Rowe. We are a debt relief agency. We help people file for bankruptcy relief under the Federal Bankruptcy Code (Title 11 of the United States Code). If you would like to discuss your situation in further detail, please call our Fresno offices at: (559) 228-1500 or our Merced office at: (209) 722-3700 to schedule a consultation.
