Michigan Attorney General Dana Nessel has issued a consumer alert about housing scams. At time when the nation is facing an affordable housing crisis, instances of fraudulent landlords stealing from residents have been reported around Michigan, especially the Detroit area. Nessel’s office tells us more:
Michigan Attorney General Dana Nessel is reissuing consumer alerts related to housing scams following reported instances of bad actors taking advantage of unsuspecting Detroit residents.
Last week, NBC News and Outlier Media published findings from a four-month investigation focused on the “fake landlord” scam in the city.
The report notes that in some cases, “people who have lost their house to foreclosure have kept collecting rent from tenants without letting on that they’re no longer the landlord. In others, con artists have broken into vacant houses, changed the locks, listed them for sale or rent, then collected payments from victims. Some fake sellers have even filed false deeds to make fake sales look legitimate, lawyers and experts say.”
“I was appalled and saddened to read the hardship these victims are facing at the hands of scam artists who target tenants,” Nessel said. “The best way to prevent a scam from happening is to know the red flags to look for, so you can spot them before a bad actor tries to take advantage of you or someone you know. It’s also important to remember my team is ready to investigate consumer complaints. We just need help from the public in reporting suspected scams.”
In response, Nessel is reissuing two consumer alerts that are among her library of resources consumers can review anytime on a variety of topics.
The AG’s Home Lending and Foreclosure Rescue Scams Consumer Alert highlights ways scam artists have targeted consumers in danger of losing their homes or homeowners who have equity in their homes but not cash. The elderly and those with low incomes or poor credit are particularly vulnerable.
Here are tips to protect your home:
When reviewing mortgage choices, consider a Federal Housing Administration (FHA) insured mortgage. FHA loans have low down payment requirements and easier credit and underwriting standards. Additionally, unlike most conventional lenders, FHA lenders are required to follow foreclosure prevention procedures designed to assist the homebuyer in keeping his or her home through rough times.
If you do not get straight answers from a prospective lender or feel uneasy about the arrangement, seek a loan from a different lender.
Be sure your loan agent is employed by a lender that is a licensee or registrant and therefore authorized to sell mortgages in Michigan. To find out if a lender is authorized to sell mortgages in Michigan, contact the Department of Insurance and Financial Services (DIFS) Monday through Friday 8 a.m. to 5 p.m. at 877-999-6442. You may also search for licensees on the DIFS website.
Read and understand everything you sign.
Obtain copies of everything you sign.
Never sign a blank document.
Don’t sign a power of attorney without discussing it with somebody you know and trust.
Get all promises, as you understand them, in writing.
Nessel’s Rental Listing Scams Consumer Alert explains ways bad actors will promote a property that isn’t a legitimate listing to cheat an interested renter out of money.
Fraudulent rental listings typically happen in two ways:
Hijacked Ads – Some scammers may copy a listing from a legitimate real estate listing and place it on a different website. It all looks legitimate, but in reality, the bad actor is promoting a property they’re not affiliated with.
Phantom Rentals – Other scammers may make up a listing to cheat an unsuspecting renter out of money. These will often offer to rent the property far cheaper than other listings in the area.
“Never pay for a rental property without seeing it in person and meeting with the landlord,” Nessel said. “You should also search the listing online to ensure it wasn’t copied fraudulently. Do your homework and trust your instincts if something feels off about a listing – even if it offers a big savings in your rent payment.”
More tips on how to avoid a rental listing scam can be found in the consumer alert.
Online there are also additional resources for landlords and tenants.
Your connection to consumer protection is just a click or phone call away. Consumer complaints can be filed online at the Attorney General’s website, or by calling 877-765-8388.
