Detected Any Mortgage Fraud Schemes Lately?
August 22, 2012
The face of mortgage fraud and the methods of committing this type of crime are constantly changing. With evolving technology and so many different fraudulent schemes, defrauding lending and servicing institutions has become all too common in today's market. The Freddie Mac Financial Fraud Investigation Unit researches and follows housing market fraud trends and has put in place important guidelines to assist you and your organization in protecting against mortgage fraud.
Most recently, in the Single-Family Seller/Servicer Guide (Guide) Bulletin 2012-13, to provide Servicers easier access to a complete statement of our mortgage fraud requirements, we restated our information on Fraud Prevention, Detection and Reporting, to Guide Chapter 57 in Volume 2 of the Guide. This new Chapter 57 is identical to Chapter 7 in Volume 1 of the Guide, which was implemented two years ago to address fraud risks and provide mortage fraud requirements to all Seller/Servicers.
Additionally, over the past few months Seller/Servicers were reminded to report fraudulent or possible fraudulent activity to us by completing and emailing the appropriate form to email@example.com. You may also submit the information required in the form via fax or regular mail.
- Fax: 571-382-4883
- Mail: Attn: Institutional Investigations
8200 Jones Branch Drive
McLean, VA 22102-3110
Currently, one of the most prevalent mortgage frauds reported by Seller/Servicers is unremitted payoff funds. This occurs where a closing agent fails to remit payoff proceeds from a refinance or home sale to the original lender. As a result of the Servicers’ fraud reporting, Freddie Mac was able to stop several nationwide closing agents from misappropriating payoff funds. Not only were further closings terminated with these agencies, but law enforcement agencies and state regulators worked closely with Freddie Mac to shut these organizations down.
Being vigilant with your prevention efforts, following Guide requirements, and keeping up with industry trends, we can continue to work together to combat mortgage fraud.
Get More Information
Make sure to visit our Mortgage Fraud Trends Web page to read articles about the importance of reporting mortgage fraud. Other resources about Fraud include:
- Mortgage Fraud website
- Quality Control Resources and Fraud Prevention Web page
- Freddie Mac Fraud Hotline: 800 4 FRAUD 8