Freddie Mac's Fraud Video Warns Borrowers

Freddie Mac produced this video to educate borrowers who face foreclosure about a fraud scheme where “a con artist will seek out a public notice of foreclosure and approach the potential victim with documents and the promise of sorting out the debt,” thereby tricking the homeowner into signing over the deed to the house.

“Avoid Fraud” video [YouTube]
Official “Avoid Fraud” website [Freddie Mac]

“Online video helps troubled borrowers spot fraud” [Reuters]


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  1. tokenblackgirl says:

    This is very common in NYC…i was a paralegal at this firm and had
    that happen to two clients. they were old women and didn’t know what
    they were doing.

    One lost two properties.

    That is so fucking mean.

  2. Parting says:

    @tokenblackgirl: If it’s proven fraud, shouldn’t the victim be able to reverse it?

  3. BigNutty says:

    Big here in L.A. and some guy is in jail and all over the news for doing this. Should be shot or hanged as this type doesn’t even deserve jail or prison.

  4. Kezzerxir says:

    The thing about stealing a house is once you still it, its kind of hard to hide.

  5. Chamber005 says:

    Yeah — this seems crazy risky messing with someone’s deed. I know some guys who did the whole foreclosure flipping thing, and the most important thing they did (for the homeowner and themselves) was to video record the actual contract signing.

    They were doing it the “right” way (though there really is no correct way so far as the government’s concerned!). These guys would purchase the home that was soon to be in foreclosure at no higher than 90% loan-to-value; using the proceeds of the purchase the borrower would pay the buyer 10% as a kickback and would set up a bank account that would automatically withdrawl the monthly (including taxes and insurance) payment.

    For instance, a person owns a 200K home and goes into foreclosure (for whatever reason). The balance on the home is 100K. Buyer comes in and purchases the home for 160K (80% loan-to-value). After closing the homeowner pays the buyer 20K. That money’s gone because of the buyer’s risk. Homeowner has 40K in cash now. Homeowner sets up a bank account to cover 13 payments including taxes and insurance (let’s say they’re paying a total of 2K per month so that’s 26K for the year). Borrower now has 14K left in excess funds. They can use that to pay off expenses, etc while improving their FICO. Also, borrower has 13 months cancelled checks which is imperative is rentee is selling to renter.

    13 months later the homeowner buys back the property from the investor at 85% and is back on track.

    The problem is, most bail-out investors don’t do it the “right” way; they simply bail the person out and then charge rent and if the person doesn’t pay they kick them out. Idiots. There’s so much more money to be made if people weren’t such friggin idiots.