Recently, ABCnews.com reported the story of Saman Hasnain, a Pakistani beauty queen who allegedly tricked dozens of San Jose homeowners into a bogus refinancing scheme. With the help of her husband, Hasnain lured naive homeowners with promises of new mortgages and cheap rates. Needless to say, these new and improved mortgages never materialized and the homeowners were left in the dark.
Although Hasnain and her husband are being charged with 28 combined counts of conspiracy to commit grand theft, they fled the United States and returned to Pakistan. Because Pakistan has no extradition treaty with the U.S., it is possible the couple will never stand trial. Meanwhile, a number of victims lost their homes in the scam.
Although it is impossible to guarantee anyone from fraud, following a few key precautions can greatly reduce your vulnerability. The Federal Bureau of Investigation lists the following tips on how to avoid mortgage scams:
- Get referrals for every mortgage professional you are considering doing business with. Afterward, check their licenses with the state, county or city regulatory agencies.
- Do your own research on the local market. Have a solid idea of what homes are selling for in your neighborhood. The more you know, the less easily you’ll be fooled.
- Beware of “no money down” loans, or anything that appears to good to be true. Although there are a number of legitimate home loans that require no money down (i.e. va mortgages, USDA rural housing loans), be cautious of lenders who try to push these types of loan products. They may be trying to coerce you into something you can’t afford.
- Never allow anyone (even real estate or lending professionals) talk you into making false statements on your loan applications.
Never sign a blank document or a document containing blank lines or missing information. Even if the person you’re dealing with assures you they will “fill it in later,” you don’t know what they’re going to fill it in with.
For more information and resources on protecting against real estate scams, visit the FBI’s mortgage fraud webpage here: http://www.fbi.gov/about-us/investigate/white_collar/mortgage-fraud
Vacation Rental Scams
While listening to Clark Howard, a radio host and consumer advocate who shows listeners how to save money, recently I learned about a scam that’s becoming more common on craigslist that rental property owners should be aware of. Unscrupulous individuals (to put it kindly) post fake vacation rental ads online, accept the booking and payment up front, and when the renter arrives to begin their stay only to learn they have been scammed.
Read Clark’s full description of the issue here: http://www.clarkhoward.com/news/show-notes/craigslist-vacation-rental-scam-gaining-momentum/nFkG/
While it’s important for anyone considering renting a vacation home direct from the owner to be on the lookout for this racket, it’s also critical that property owners know about it. You might see potential renters who are a bit more wary in light of this existing scam. Taking a cue from Clark’s tips to renters here are a few ways to show that you are trustworthy and have a real property to offer:
- Post the listing in several locations so that it can be easily verified.
- Ask previous renters to post reviews on property rental sites, Google places, and anywhere else that is available to you.
- Accept credit card payments. You can do this through Paypal without a complicated setup.