Affinity Fraud found by Freddie Mac

Freddie Mac published a blog post June 8, detailing the case of an Affinity Fraudster. “The idea behind ‘affinity fraud’ is to exploit the baseline trust that generally exists within an ‘affinity group’ – i.e. a group defined by a common heritage, language, ethnicity, workplace, or circle of friends.” In this circumstance, the fraud was perpetrated by winning the trust of a faith based group of consumers. In exchange for an upfront fee, the fraudster preyed upon his victims by promising to keep them out of foreclosure. He took money from distressed borrowers and did nothing for them.

According to Freddie Mac, there are basic steps distressed borrowers can follow to avoid fraud and becoming a victim of unscrupulous fraudsters:

  • Call your mortgage servicer. Only your servicer can modify your mortgage or finalize a plan to avoid foreclosure. Visit Freddie Mac’s Mortgage Resource Center or MakingHomeAffordable.gov to learn about your options.
  • For reliable advice before you call your servicer, call 1-888-995-HOPE or seek free assistance from a HUD approved counselor.
  • Doubt anyone who promises to stop a foreclosure in exchange for an upfront fee.
  • Doubt anyone who promises to pay your mortgage and rent your house back to you if you give them title to your home.
  • Don’t sign documents (like a Quit Claim Deed) that transfer the title to your home to anyone. Genuine mortgage workouts do not require you to transfer title.
  • Don’t sign documents with errors or blank spaces.
  • Don’t sign documents you don’t understand or aren’t sure about.
  • Contact Freddie Mac to report suspected fraud at (800) 4FRAUD8 or at mortgage_fraud_reporting@freddiemac.com.

To read the blog post in its entirety, go to: http://www.freddiemac.com/blog/homeownership/20150608_fraudster_sentenced.html

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