Mortgage Fraud and Fraud Reporting
Freddie Mac is committed to helping the mortgage industry fight fraud. As part of our fraud prevention effort, on October 7, 2011 we added a new chapter to the Multifamily Seller/Servicer and Delegated Underwriting for Targeted Affordable Housing Guides to contain our requirements for the identification and reporting of fraud. Although Chapter 7, Fraud Prevention, Detection and Report does not go into effect until January 1, 2012, Multifamily Seller/Servicers are strongly encouraged to begin implementing these requirements immediately.
The new chapter includes Freddie Mac's requirements for Seller/Servicer reporting of mortgage fraud and suspected fraud. A Seller/Servicer must report to Freddie Mac when the Seller/Servicer has a reasonable belief that one of the following is occurring or has occurred during the origination or Servicing of Mortgage:
- Misrepresentation, misstatement or omission related to the Borrower or Borrower Principals including sources of funds, other indebtedness and other assets
- Misrepresentation, misstatement or omission related to the Property, including property valuation, property value, occupancy, income and property use
- Misrepresentation, misstatement or omission of any other information related to a Mortgage or related real estate transaction, including, undisclosed seller or other third-party incentives, loan performance, mortgage purpose, kickbacks, an undisclosed relationship between parties to the transaction when Freddie Mac requires that the transaction be an "arm's length" transaction
- Theft of custodial funds or non-remitted payoff funds
- The involvement of a person or entity on the Freddie Mac Exclusionary List in the origination, sale or Servicing of the Mortgage or in the related real estate transactions in violation of Section 2.18 of the Multifamily Seller/Servicer Guide
To assist in meeting Freddie Mac's fraud reporting requirements, we are also providing two new Freddie Mac fraud reporting forms – one for origination-related fraud, and the other for servicing-related fraud:
To report fraud or suspected fraud, please complete the appropriate form and e-mail it to firstname.lastname@example.org. In addition to using the fraud reporting forms, you may contact Freddie Mac regarding fraud in the following ways:
Phone: (800) 4FRAUD8
Mail: Attn: Institutional Investigations
8200 Jones Branch Drive
McLean, VA 22102-3110
About the Fraud Investigation Unit
Established in 1989, the Fraud Investigation Unit (FIU) is responsible for the prevention, detection, investigation, and resolution of mortgage fraud. In addition to our core responsibilities, the FIU's job duties entail:
- Assisting law enforcement with criminal investigations and making referrals to state licensing and regulatory boards.
- Participating in national, regional, and industry mortgage fraud task forces.
- Providing training to the FBI, state regulators, lenders, and Freddie Mac employees.
- Participating in various speaking forums to discuss fraud trends