How To Spot Fraudulent Posts

Identity thieves have increased their presence in the housing and rental markets making it even more important for potential homebuyers and renters to do due their diligence and know the warning signs of a scam.

The housing bubble caused many homes to be pushed into foreclosure and the owners into the rental market, and scammers are using a myriad of ways to steal personal information and money from unsuspecting victims. According to Raul Vargas, fraud operations manager for Identity Theft 911, many of the scams are occurring online.

Vargas explains that many of the scams involve an online post about an available property to rent and when someone is interested, the scammer sends a rental or lease agreement that requires a plethora of personal information like birth date, Social Security number and current address. Some even ask for bank account information to verify eligibility. The unsuspecting renter ends up giving up the information hoping

Some scammers post bogus properties online and target renters moving from another city or state.  “Everyone renting looks online to find a great price,” and the scammers know that, says Steve Weisman, a college professor at Bentley University and author of 50 Ways to Protect Your Identity in a Digital Age. Typically the fraudster will list a rental online with a market price far lower than others in the area. The listing will have a real address and photographs and the renter will be asked to either wire a deposit or send a money order to hold the rental. “The renter doesn’t get to see the place and the next thing they know they don’t have a place,” says Weisman. “It’s very easy to copy a listing and put up a phony one.”

Scam go both ways: People with a property to rent can also become victims. Weisman cites a popular scam that involves someone living outside the country agreeing to move into a rental unit sight unseen. The “renter” will even send a deposit of six months rent to ease any fear. A few weeks later, the scammer will call to back out of the agreement and tell the landlord to keep two months of the rent for the trouble and send the rest back.  The landlord cashes the check, sends the money back and a week later the check bounces. “Even though you waited a few days for the check to clear the bank doesn’t tell you that it’s only provisional credit. The bank takes back the money when the check truly does bounce,” says Weisman.

While scammers have become more sophisticated, renters and landlords can stay one step ahead.  Being aware of some red flags will prevent them from losing any money or sacrifice personal. According to Vargas, if the person asks for personal information via the Internet and/or asks you to send money via a money order or a wire transfer ,which isn’t easily traceable, should all serve as red flags. He also recommends never sharing personal information without meeting someone and checking their credentials.

Experts suggest out-of-town movers to work with a licensed agent to find a place to live. To verify if an online posting is legitimate, Weisman recommends searching the address and if it turns up on multiple sites with different names, there’s a strong change the listing is a scam listing. The tax assessor’s office can provide the homeowner’s name of the particular property and many of the offices have websites making it easier for renters to check public information. “Be wary if the place is dramatically priced less than others and always check out who the real owner is,” says Weisman.

After a Foreclosure or Short Sale

Have you gone through a foreclosure or short sale in recent years?  Ever wonder how long it will be until you qualify to purchase again?  This handy chart takes the guess work out of this sometimes complicated process.  Please feel free to contact Kelly Zitlow if you feel that you are ready to purchase and would like to know how much you qualify for.

 

Mortgage Debt Relief Act Expiring

WASHINGTON — Beginning on Jan. 1, people who lose their home to foreclosure will be required to pay federal taxes on any unpaid mortgage the bank can’t recoup through an auction. The same will be true for homeowners whose loan principal is reduced by a mortgage modification, with the wiped-out loan being treated as taxable income.

The new tax obligation will hit because the Mortgage Forgiveness Debt Relief Act expires at the end of the year. The 2007 law was passed to save struggling homeowners from getting whacked twice, first by the sagging housing market and second by the Internal Revenue Service. Its expiration could push more people to remain in homes worth less than their mortgages, slowing the housing market’s recovery.

“The housing market is in its first stages of recovery, making now the worst time to take this exemption away from homeowners,” Rep. Jim McDermott (D-Wash.) told HuffPost. McDermott has introduced one of the bills geared toward extending the exemption.

“This exemption allows homeowners to write down their mortgages and refinance without incurring a hefty tax bill,” he added. “This ultimately lowers monthly mortgage payments, leaving more money in the hands of homeowners at a time when they need it most. If Congress does not act, the gains the housing market has made will be wiped away.”

The Washington Post reported on Friday that a number of former White House economic advisers and other economists consider the sagging housing market to be one of the greatest obstacles to recovery. Yet Treasury Secretary Timothy Geithner and others in the administration think there is little more they can do to help struggling homeowners, according to the Post.

Extending the tax exemption would help. The exemption, which can be as much as $2 million per household, covers individuals who negotiate a principal reduction on their existing mortgage, sell their house short (i.e., for less than the outstanding loans), or participate in a foreclosure process.

Under normal circumstances, homeowners who sold their house for less than the balance of the mortgage — and were forgiven the difference by the bank — would have to pay income tax on that windfall. Negotiating a reduction in the mortgage principal would also generate tax liability.

For example, an individual who owed a $400,000 mortgage might decide to sell the house, now worth $300,000 on the local market. If he sold the property short and the bank forgave the extra $100,000 — an arrangement that benefits the lender because it recoups more of the original loan than would a foreclosure — the IRS would consider that amount as income, on which the borrower could owe thousands of dollars in taxes.

“This has the effect of pulling people up with one hand, and hitting them in the face and knocking them over the cliff with the other,” Sen. Jeff Merkley (D-Ore.) told reporter David Dayen back in August.

An extension of the tax exemption would appear to be a common-sense means to help stabilize the housing market, but the political turmoil around the fiscal-cliff negotiations means common sense may not win out.

“The challenge is that a single-issue tax provision of this type — of any type, frankly — just simply doesn’t move on its own,” said Linda Goold, tax counsel for the National Association of Realtors

. “It will be part of a package or it will not move. … It is really tied to the future of what happens with the big deal and then whatever they come up with after that relating to the provisions that either have or will be expiring.”

For more information, please see the IRS website with detailed information about the act.

The Aladin Group’s New Blog Series

The Aladin Group has come out with a new youtube blog series called “5 Things Your Realtor CAN’T Tell You!” Subscribe to their channel HERE! Check out Part 1 of 5 below! Enjoy!

This series will be very helpful for prospective buyers! There are some great questions that need to be asked but Realtors can’t legally or morally give the answers to.