Archive for Friday, December 26, 2008

Bond scam targets homeowners

December 26, 2008


The latest scam aimed at cheating homeowners involves “private offset bonds,” which falsely appear to have the backing of the U.S. Treasury.

Q:Our home has been on the market for several months. We recently received a full-price offer from an investor who would purchase the property with a written “private offset bond” that is guaranteed by the federal government. How do these bonds work?

A:Often, they don’t. So-called private offset bonds are at the core of a small but growing type of scam that fraudulent investors are using to bilk owners out of their homes or their equity, the U.S. Treasury Department recently warned.

Offset-bond schemes can take several forms. In many, the con artist offers to purchase a property by signing the bond over to the seller instead of paying cash or applying for a traditional mortgage. It’s a tempting offer to desperate sellers, because the deal supposedly could close within a few days, rather than the months it could take for a loan application to be processed in today’s tougher lending environment.

The bonds, however, are often fake. Though the document might look real and appears to have the signature of Treasury Secretary Henry Paulson on it, private bonds or promissory notes are never guaranteed by the federal government, the agency says.

In addition, the only type of bonds that the feds will print on paper are savings bonds. All others are issued electronically, so there’s little chance that the bond the investor is offering to give you for your home is legitimate.

The bogus bonds also are being used in attempts to purchase cars and other vehicles. The Treasury Department is asking consumers who are suspicious about a buyer’s offer to report the proposed deal to the agency’s investigative hot line (800-359-3898) and call the local police or sheriff’s department.

More information about this and other recent scams can be found at the Treasury’s Web site,

Q:I recently received an e-mail that said California homeowners must purchase a hunting license before setting a simple mousetrap in their own home. Is this true?

A:California probably leads the nation in kooky laws, but requiring homeowners to get a hunting license before laying mousetraps on their property is not one of them.

I have received the same e-mail myself. It’s based on a misunderstanding of a state law that was approved nearly seven years ago, which stiffened the requirements for professional hunters, trappers and rodent-extermination companies to get a state-issued license.

The law exempts homeowners from the licensing requirement if they want to set a mouse or rat trap in their own home. That’s because another measure that was passed several years earlier demands that “every person possessing any place that is infested with rodents ... shall at once proceed and continue in good faith to endeavor to exterminate and destroy the rodents by poisoning, trapping and other appropriate means.”

Q:I lease a unit in a large apartment building, but I have missed my last three monthly payments because I was injured in a car accident in the summer and have not been able to work since. My landlord has been very cooperative in helping me arrange an informal repayment plan, but now the building is being sold and he says my rent must be all caught up before the sale is completed next month. If I can’t make the payments by then, can the new owner evict me for the rent I owe to the current owner?

A:Yes, probably. Though rental laws vary from one area to the next, the buyer of an apartment building usually assumes all of the seller’s liabilities and debt.

Your letter states that you have an “informal” agreement with the current landlord to repay the back rent that you owe. But if the deal with your current landlord isn’t in writing, or if the seller hasn’t disclosed it to the buyer, the buyer will likely have the right to evict you for nonpayment and also to sue you for the rent that you have not paid for the past few months. Contact your local rental-housing agency or rent-control board for more details.


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