Dear Liz: I’ve noticed several ads on reputable websites that beckon renters to consider taking over mortgage payments for financially strapped homeowners. Typically, the payments are ridiculously low for sprawling estates in multimillion-dollar neighborhoods, so I’ve paid them little attention until recently. I saw an ad for a normal family home in a good neighborhood renting for well below market value.
Interested but cautious, I called the toll-free number and spoke to an actual person who said the company represents homeowners in pre-foreclosure. They try to match qualified renters (there was an income requirement, but no credit check) with struggling homeowners in a win-win situation: Renters get into desirable properties, paying “rent” directly to mortgage companies, and homeowners avoid foreclosure.
This matchmaking arrangement sounds logical and appealing for both parties. However, something that sounds too good to be true usually is. Still, I can’t help but wonder whether there is a shred of legitimacy to such arrangements. If so, where can I find credible information and legitimate opportunities to help a struggling family while benefiting my own?
Answer: Think this one through a little more. Why would anyone — homeowner or “rescue” company — leave money on the table by charging below-market rents on desirable properties and to people of uncertain creditworthiness? Out of the goodness of their hearts? That’s a stretch.
Just because an ad appears on a reputable website does not mean the advertiser is a reputable business. A common scam these days is for con artists to promise homeowners salvation from foreclosure by taking over their mortgage. The scammers rent out the house but simply pocket the rent payments. The home goes into foreclosure, the renters get evicted and no one wins but the bad guys.
You can read more about foreclosure scams at the Federal Trade Commission website.
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