My First Clear Scam

Peon and J are searching for housing in the Bay Area.  The good ones are taken within hours, so we don't have a chance on those.  So far, Peon has seen a few that seemed odd--as in, someone is attempting to part me from several thousand dollars of my money without providing me housing--but today I got my first "classic" scam.

Now some people may think I am naive and, in some ways, I am.  But even I can see all of the red flags here:

the "owner" lives and works in New York
the "owner" invites me to look at the neighborhood, the outside of the house and the yard
the "owner" wants our personal information (but oddly, not our Social Security numbers)
the "owner" expects that, should I like the house, I will send him $2000 and expect the keys by return mail

I am suspicious at this point, but then the "owner" proves that he is a moron, that our schools suck at teaching critical thinking skills.  One of the things I always do in looking at a potential rental is check the property out on Trulia and Zillow.  I do this because I want to make sure that the property is not about to go into foreclosure, and that it isn't for sale.  I don't want to move twice in a few months.  In fact, I've found two or three houses that were likely about to be abandoned to the bank.  We passed on them, but I did find that the soon-to-be-former owners were charging fairly high rents, taking as much money as possible on the way out.

Anyway, there the property was, on Trulia, at a slightly different address.  But I'm good at research, and was able to find the correct location.  It was for rent, but for $450 more a month in rent, and with a local landlord.  I both reported the listing to Craigslist and called the landlord to suggest that he put a notice at the property warning prospective tenants of the scam.  Then I sent a return email to the scammer.  I was not a nice lady.

Grrr

Peon is always distressed when people make silly arguments.  Silly arguments are not good for us.  It's not good for the quality of debate.  It makes people dumb.  It requires that those of us who think an argument is silly to note it, wasting time that might better be spent playing computer games and reading trashy mysteries.

The latest silly argument is being made by landlord groups opposing State Senator Mark Leno's security deposit legislation.  It would simply require that landlords maintain security deposits in separate bank accounts, pay interest on those deposits, and suffer mandatory punitive damages if they wrongfully withhold deposits.  Not exactly burdensome when tenants are forking over a couple grand.

We will admit that landlords are a beleaguered lot these days.  It's difficult to argue against protection of security deposits when so many of your fellows suffered foreclosure on their properties and skipped off with their tenants' security deposits.  it looks bad, and people don't feel much sympathy for you.  But they've tried.

And what do they claim?  Well, it would be so difficult to keep track of the interest.  Yeah, the $1.00 or so that would be paid on most deposits?  Hell, just email your tenants and tell them to take the sum off their rent.  And that they would have to send 1099s to their tenants.  Probably not at all, but certainly not for a dollar.  The IRS doesn't care about anything less than $10.  Anyone who has a savings account knows this.

If you don't have better arguments than that, hang it up.

Moore and Shawnee

If you want to donate to the Oklahoma relief effort, you can do it here.  Or if you want to buy stuff for the Occupy effort, you can go to their Amazon site and purchase needed supplies.  I gave money, but that's because the relief effort can use the money most effectively.  (During Occupy Sandy, New York's group asked for goods early on, as they had no way to move stuff for several days.  That's not true in Oklahoma City.)

Facebook

I dumped my Facebook account.  Now I have it back again.  I'm not sure why, except that I want to see L's (daughter of fried A) pictures of Hawaii, and that's where she's posting them.  I'll probably be the only person on Facebook with two friends.

Hedge Funds Again

Whenever a hedge fund is involved in something, I start looking around for the government bailout that is soon to follow.  While I've been critical of a lot of the hand-wringing over the investments in single-family rental housing (oh, the awful tenants, how will they maintain the properties etc.), a couple of things are making me just a little nervous.  The first is that Colony Capital is setting up for an IPO, which could mean they are seeking to diversify their investor base. A couple of other groups are planning the same thing. Not necessarily a bad thing as an investment strategy, but it could be an indication that the initial investors want out...

Of course, this doesn't benefit tenants at all.

But apparently there are some funds that have run out of foreclosures and other distressed properties and gone into buying new houses.  New houses have a "new" premium--everything is unused, pristine and all that stuff.  But the house loses its "newness" the minute someone moves in, so the resale will be for a not-so-new house.  That makes me nervous--these people have so much money that they can now make bad decisions.

Obnoxious Self-Promotion

I wrote the Letter of the Week in the Sacramento News and Review.  Now don't you wish you'd skipped this entry?

Oh, Pity the Poor Banks

It's so sad.  Our megabanks are suffering.  I mean, we let them get away with all sorts of stuff--making bad loans, selling them to investors, shorting the investments as they sold them to investors, getting the government to bail them out, other stuff we all know about.  But now cometh the California Homeowner Bill of Rights, which makes said megabanks behave themselves--minimally.  It doesn't send the Board of Directors and major players off to prison.  It doesn't make them pay a fine.  All it does is require that they not conduct themselves like gangsters, that their dealings with distressed homeowners be clear and transparent, that they not do things to sneak through foreclosures on the unsuspecting.

Alas, we find that the Bank of America can't even do that.  A scant five months after the legislation came into effect, we have a case in which the agent for the bank double-tracked a homeowner--allegedly negotiating while filing a Notice of Default and attempting to proceed to foreclosure.  You'd think this was one of the simple rules: you will negotiate in good faith and not encourage people to sell their first-borns to keep their homes, all the while proceeding with the foreclosure.  Not only it it bad form and a specific violation of the law, but it's also easy for a distressed homeowner to show that she has asked for a modification.  There's paper evidence all over the homeowner's dining room table.

But it costs so much money!  The bank has to pay its own attorneys, the attorneys for the distressed homeowner etc. etc.  Awww.  Maybe BofA should have realized that a lot of lawsuits aren't worth the trouble.  That's what the rest of us do.  Too much hassle.  Not enough return.  Surely BofA has an economist somewhere on staff who could see that the recovery through foreclosure didn't justify defending this lawsuit.  Or they could have just obeyed the law in the first place.

Yves Smith has a really good piece on the same subject.

A Couple of Notes on Foreclosure

First, there have been a bunch of stories noting that foreclosures have increased since March.  That happens every year.  With a couple of notable exceptions during the depth of the crisis, foreclosures are always higher in the second and third quarters, lower in the first and fourth.  So you want to look at the year-over-year, and foreclosures are falling.  They should be, given the number of people who have already lost their homes. A lot of properties that homeowners might have struggled to keep on through the ARM rate adjustment in 2012 were, in fact, owned by landlords who bailed when prices collapsed.

Second, most of what I hear from tenants makes me angry.  But every so often I get a story that's more than just ordinarily appalling.  You know, stories where the bank just changes the locks on the tenants or turns off the water or whatever.  Nasty, piggy behavior.  Even as the crisis lessens, though, there are still some of those.  To wit: a California homeowner rented out rooms in his home.  One was rented in 2012, and two in 2013. The foreclosure sale was this week.  "Wait," you say, "the landlord must have known when he rented out at least two of the rooms that the building was about to be foreclosed."  Yes, indeed.  "But, surely," you say, "the owner told the tenants what was happening.  Or they saw mail lying around the house."  You've gotta be kidding.  The landlord is squeezing as much blood as possible on the way out the door.

In this case, it gets worse.  The landlord has been offered a "cash for keys" agreement if the property is vacated within 15 days, and the landlord wants the tenants to move so that he can collect the money. Yeah.  Unfortunately there's an exemption in California's foreclosure protections, just for tenants who live in the same unit as the owner.  It may be that the Legislature really believes that no owner would keep such information from people sleeping in the next room.  It may also be that tenants who rent rooms are low-income and not worthy of the protection afforded even other tenants.

Nook Grief

I love my Nook.  But it recently (yesterday) caused me grief equaled only by the grief involved in setting up the wireless connection when I first got it.  J finally solved the problem then, and he did it again.  But what is most irritating is that Barnes and Noble has known about the problem forever and didn't bother to fix it.

The problem was that the latest Nook update won't work with Adobe unless you have an ID and a password.  In the olden days--before yesterday--I got my library books through Adobe and then transferred them to my Nook.  Simple.  Easy.  Even I could do it.  But then I left my wireless on too long and the Nook updated.  (I don't use the wireless unless I'm buying from B&N, as the wireless uses a lot of battery power.)  Then it wouldn't let me get library books.  I had error messages.  There were no books.

I wept.  I screamed.  I tore my hair.  I called to J.  "Fix it," I said, "or I'll never be able to get another book from the library and I'll have to buy them."  J set to work.  He took my computer, he took my Nook, and then magic happened and I was restored to ebook borrowing.  Unlike many people, I did not have to restore my entire library, or re-set everything on the Nook.

But I'm still irritated that Nook didn't solve this problem months ago.