Short Sale Fraud Rising, Freddie Mac Wants Your Help
Short Sale Fraud Rising, Freddie Mac Wants Your Help
Freddie Mac is reporting an increase in short sale fraud and is reaching out to the real estate community to educate them about the signs of short sale fraud and ask for their help in reporting it when they see it. Freddie’s investigation unit is reaching out to REALTOR® associations through seminars and articles in educating real estate professionals to better detect short sale fraud.
The mortgage giant is reporting cases of some real estate professionals hiding better offers from Freddie Mac and the distressed home owner or even rigging sales at a low price so that the property can later be flipped for a higher profit. Also, Freddie Mac reports a growing number of “flopping” schemes, in which a scammer buys a short sale from Freddie or banks by using a fake title or loan document and then sells the property to a legitimate buyer at a higher price.
"There are many conscientious real estate professionals who want to do the right thing,” writes Shelley Poland, a vice president at Freddie, and Robert Hagberg, the associate director of fraud investigations, in a blog post. “We often receive calls in our servicing, quality control, fraud investigation, outreach, and HomeSteps divisions from real estate agents who know they've seen something inappropriate and won't look the other way. They understand that real estate fraud turns a shortsighted profit at the cost of the public's long-term confidence in home ownership and the housing industry."
Source: “Freddie Mac Alerts Real Estate Agents to Rising Short Sale Fraud,” HousingWire (Aug. 22, 2011)
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