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REALTOR®: Freddie Mac Warns Borrowers about Foreclosure Fraud Schemes

Monday, January 7, 2008

After a new survey revealed one-in-four delinquent borrowers go to the Internet before their bank or lender for information about avoiding foreclosure, Freddie Mac, one of the country’s largest investors in residential mortgages, has produced an Internet video dramatizing a common foreclosure fraud scheme.

Freddie Mac decided to produce the anti-fraud video for You Tube after a 2007 company-sponsored study discovered 25 percent of delinquent borrowers go to the Internet first for mortgage information, only slightly less than those who call their mortgage lender (28 percent) or bank (32 percent). GfK Roper Public Affairs & Media, a division of GfK Custom Research North America, conducted the survey of 2,400 borrowers.

The two-minute video demonstrates how con artists can:

* Get copies of foreclosure notices at City Hall or a county courthouse;
* Persuade distressed borrowers to give up the deeds in exchange for suspicious promises to solve their financial problems;
* Use the deeds to secure new loans for themselves; and
* Let the new loans go into foreclosure, which means the homeowners looking for help can still end up losing their house.

“With fraud reports on the rise, we are using every communication channel out there to warn borrowers about these fraudsters and urge borrowers to call their lenders when they fall behind on their mortgage," said Ingrid Beckles, vice president, Servicing and Asset Management, Freddie Mac. “By working with our servicers, Freddie Mac is now helping an average of 1,000 delinquent borrowers a week avoid foreclosure through forbearances, repayment plans or other workout options."

The anti-fraud video can be found at http://www.youtube.com/AvoidFraud.

The San Mateo County Association of REALTORS®, a professional trade organization representing over 3,800 REALTORS® and affiliate members engaged in the real estate business on the Peninsula, strongly advises homeowners who anticipate they are going to miss a mortgage payment to contact their mortgage company immediately. Both homeowner and mortgage company may be able to work out a solution early.

SAMCAR Realtors also encourage troubled homeowners to call 888-995-HOPE (or visit 995HOPE.org) for advice. This toll-free, confidential hotline is sponsored and funded by the Homeownership Preservation Foundation, a non-profit dedicated to preventing foreclosures. Through the hotline, the foundation offers free advice and counseling to homeowners.

SAMCAR is supported by a vast network of resources, including the California Association of REALTORS® (C.A.R.) and the National Association of REALTORS® (NAR), the nation’s largest trade association. These Realtor associations provide a network of experts and publications that help their members to better answer their clients’ housing-related questions.

The San Mateo County Association of REALTORS® (SAMCAR) is a professional trade organization representing over 3,800 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula. SAMCAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in San Mateo County.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Julie Ziemelis, Director of Public Affairs, e-mail , or phone (650) 696-8214.

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