Freddie Mac’s fraud unit is teaming up with real estate professionals who list HomeSteps homes to sniff out bogus rental ads of REO properties — a growing problem, according to Freddie Mac.

“We’re hearing more reports about fraudsters trying to cash in on the housing crisis’s remaining foreclosed homes by advertising them as rentals on the Internet,” writes Freddie Mac in a recent blog post warning about the Craigslist REO rental scams.

The scam works like this: After a house is sold at foreclosure, a scammer then posts an ad online trying to rent out the home before the new owner moves in. Interest renters then contact the scammer about leasing the property, and they are asked to submit their personal credit information for the lease application as well as two months of rent.

It’s often not until the would-be renters try to move in that they realize they’ve been duped: The key to the house doesn’t work or they find the house is for sale or even that the previous owners are still living there. There have been some cases where scammers change the locks in the house and give the renters a working key. It’s the real estate listing agent who then often discovers the renters living there and the scam.

Freddie Mac and real estate professionals are working together to find the fake Internet rental ads. When they do, they are having the ads removed immediately. They’re also warning renters on how not to be duped from the ads, such as always verifying the home’s status through a listing agent or through county records.

Source: “Caveat Renter: Fraudsters Falsely Advertising REO as Rentals,” Freddie Mac Blog (Oct. 8, 2012)

Nowadays, if you’re looking for any of these things, the best place to look is probably Craigslist, an online classified site categorized by city.

However, the technology that has made it easier to find what you need has also made it easier for scammers to take advantage of the unsuspecting. Craigslist is a perfect example of that. On any day of the week, you can find hundreds of local listings that include apartment and home rentals, cars for sale, concert and play tickets, jobs, and every conceivable secondhand item you can think of. But scammers are very creative and have put together elaborate rouses to trick even the savviest buyer.

The good news is that you don’t have to avoid Craigslist and all of its wonderful opportunities to avoid being “taken.” You just need to know what to look for.

Here’s a rundown of the most common Craigslist scams along with advice on how to avoid them.

Source: http://www.moneycrashers.com/types-common-craigslist-scams/