Renters and Owners: Beware of Craig’s List

The marketplace is filled with “listings” on Craig’s List for rental of properties at prices that are too good to be true. The scammers are posing as local property owners who actually are out of town. They change the locks, enter the house, and prepare it for sale or rent. The owner comes back and finds a renter who demands that the lease be enforced as to possession, because the scammers were either apparent agents or actual agents of the owners. Suddenly the owner of a parcel becomes embroiled in litigation that takes their home off the market and possibly forces them into foreclosure or bankruptcy.

Prospective renters are taking a risk if they do not confirm the title of the property, the status of the property with respect to foreclosure, and the actual identity of the “broker” and the “owner” demanding proof thereof. If you put down first and last month rent, plus security of whatever, you could be kicked out in a matter of days unless you can show that the owner received some portion of those funds. The funds will never be recovered from thieves who are spending the money as they get it.

More sophisticated scammers are sending deposit checks to the real owner to have them cash it. When that happens, the law enforcement people might have no choice but to call it a civil matter. It is not inconceivable for the renter to challenge the title of the owner in such a situation although the law states otherwise.

The acceptance of the money (consideration) is one thing. But if the complaint says that a stranger stole their identity and then sold or rented the house, they might be opening the door for a challenge to that owner if defective title was acquired in a foreclosure sale that was faked by the banks, or where title was obtained from someone who obtained defective title.There is an open question about the right to challenge title where the sole reason for the eviction alleged is that the title is in the hands of the Plaintiff. Under the rules, a simple denial of that fact is a question of fact that must be heard by the court.

If it stays in a summary eviction proceeding the trial could be in a matter of days. But if the renter files in a higher court using causes of action challenging the right of the present “owner” to challenge the executed transaction because they didn’t suffer any damage (i.e., they didn’t own the house anyway and therefore were not entitled to proceeds of sale or rental)

That being the case, the argument could be made that the “strangers” had as much right to pose as the owners and agents of the named owners with or without their knowledge. Unlikely any renter would win on such an issue but possible that it could get by a motion to dismiss and tie up the property in litigation for months plus appeals.

This is the problem (see Grethen Morgneson’s article in New York Times about MERS) caused by MERS and pretender lenders, none of whom handle any money, accept any payments, or engage in any financial transactions with the homeowner who thinks they are getting a loan from the named payee. They are ALL naked nominees without a stake in the transaction.

The situation gets thick with fog as documents are piled on documents each one reciting that the previous document was valid even though the original document at the base of the pile was invalid, unenforceable and lacked the essential attributes of a valid contract — offer, acceptance of the same terms as the offer, and consideration (funding).

5 Responses

  1. from NY Times article:

    “…Under the MERS system,” they wrote, “questions of authority and accountability arise, and determining who has authority to negotiate loan modifications and who is accountable for misrepresentation and fraud becomes extraordinarily difficult.”

    It’s not difficult if the whole truth is revealed. The truth is very simple. The entities foreclosing or taking your payments are simply debt collectors of unsecured debt, who—under FDCPA—have NO RIGHT to take your property. PERIOD.

    The truth is simple. Fraud is complicated.

  2. http://www.nytimes.com/2012/09/02/business/fair-game-mortgage-registry-muddles-foreclosures.html?_r=1&ref=gretchenmorgenson

    …A MERS spokeswoman declined to comment, citing the pending litigation. Elise Wilkinson, a spokeswoman for Wells Fargo, said that as trustee of the securitization, the bank “would not be in possession of any information regarding a foreclosure action.”

    “All such information would be in the possession of the mortgage loan servicer,” she said, “which is the party responsible for initiating and managing all aspects of the mortgage loan foreclosure process.” That was the HomEq Servicing Corporation, which is no longer in the business, the Wells spokeswoman said.

    Ditto for WMC. Why didn’t it recognize early on that it had sold the Kline loan years before, saving Mr. Kline legal fees? Rick DeBlasis, a lawyer handling the matter at Lerner Sampson & Rothfuss of Cincinnati, declined to comment, saying it was part of the class action.

    It will be interesting to watch that case unfold. But in a unanimous ruling against MERS last month in Washington State Supreme Court, the judges described their problems with the registry. “Under the MERS system,” they wrote, “questions of authority and accountability arise, and determining who has authority to negotiate loan modifications and who is accountable for misrepresentation and fraud becomes extraordinarily difficult.”

  3. @Shadowcat
    You are right that the TRUE homeowner has the right to choose
    Their Title Company using due diligence.
    What I am referring to here is when someone “buys” property
    From someone who is not the true owner. The rule of Nemo Dat states
    – you have to own to sell it., but that is not what is going on in the
    – marketplace.
    “Buyers” sometimes with knowledge and sometimes without have
    “bought?” property from sources not the true owners .
    A Title agent, a supposed expert should know when a Title is not good.
    Fidelity knew the title was not good when they insured one of two properties
    Stolen from me., but Fidelity assumed if they get caught they have the means
    And connections to fight in court even if they have to pay off a judge to keep
    possession of the property with a forged deed.
    In ML v. Astoria Federal S &L Judge Alice Schlesinger knew the foreclosure
    Judgments were void ab initio since the case was in Federal Court from
    MAY 9 1997 thru July19 1997 and the judgments signed in NYSC on
    June30 1997.
    When I went back to NYSC to open up the case , Astoria Federal’s new attorney admitted they didn’t own my two condos when their previous corrupt debt collector
    Attorneys auctioned off my two condos to straw buyers.
    Fidelity Title knew this and insured their clients forged title anyway .
    Attorney David K Fiveson’s client could not obtain Title Insurance for her forged deed so when I brought them all back to NYSC they lied and said they had title insurance from
    A scam company they called Coronet Title.
    BUT WHEN YOU HAVE A CORRUPT JUDGE LIKE ALICE SCHLESINGER
    SHE DOES NOT CARE WHAT THE LAW IS
    AS LONG AS SHE GETS HER MONEY

  4. Marilyn, … a Smart Homeowner or Potential Homeowner has the Legal Right to CHOOSE thier own Title Insurer. A nice stroll to the Office and Insurer You TRUST and request a Title Commitment & Ins Policy showing the Exclusions (items not covered by Ins) to Pass Legal Title and General Warranty Deed to potential future buyers (or .. ut ummm, Yourself). Right? Just Askin? *Smiles*

  5. The rental market scammers are apparently copying what Fidelity Title excels in – pretending non owners are owners . Fidelity knowing insures forged deeds because
    all you need is an attorney ready to file many motions in the court so that the issue of who is the true owner gets lost.

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