Liars will go to great lengths to deny wrongdoing. So what do you do when someone claims innocence, yet your suspicions remain?

That’s what one of our Single-Family Fraud Risk (SFFR) investigators experienced in a case in which the denials were so convincing, the perpetrator got away with the crime. But not for long.


We discussed the origins of this case in a previous True Lies article. At that time, we knew that it involved the fabrication of CPA letters intended to establish credible borrower income and assets.

One of our Seller/Servicers had observed suspicious behavior coming from a mortgage brokerage. They followed Freddie Mac’s requirements for suspected fraud and reported their concerns to our Single-Family Fraud Risk (SFFR) team.

Our initial investigation confirmed that many of those letters contained forged signatures and unsubstantiated information; but who was responsible for these misrepresentations aimed at qualifying borrowers for loans owned by Freddie Mac?

The investigator turned to the borrowers, who were not aware of the information contained in the letters and had never requested that the letters be created.


After further investigation, we found evidence that the loan officer (LO) and loan officer assistant (LOA) at the brokerage had fabricated CPA letters and other business documents to fraudulently satisfy underwriting requirements.

When he admitted his guilt, the LO implicated the LOA, explaining that the LOA was not only aware of what he was doing, but participated in it.

When separately confronted by her employer, the LOA reluctantly admitted her role, adding that she did so only because she knew the LO was going to confess. However, she later changed her story, insisting that she was coerced by her employer into signing an admission of guilt. 

She strongly denied any involvement and convinced the state regulator to conclude that she was innocent. They declined to move the case forward.

But Freddie Mac’s SFFR investigator still had her suspicions.


In a letter to Freddie Mac, the LOA denied everything she had previously admitted, including statements of guilt made to her employer.

The LOA vehemently insisted that she had no knowledge of anything the LO was doing. She further protested that she didn’t even work at the same branch as the LO and therefore could not have participated with him in this fraudulent activity.

Following her instincts, our investigator continued digging. She learned that the LOA did, in fact, work at the same branch as the LO – at least some of the time – and still had access to the LO’s files, even after she moved to a different location.


Based on the investigator’s further digging, Freddie Mac concluded that both the LO and the LOA were culpable. We placed them on the Exclusionary List. Following that, law enforcement pursued their own investigation.

Eventually, when presented with all the facts again, the LOA finally told the truth: She had aided in document falsification to get the loans approved. Her actions – as well as her initial denials – jeopardized her credentials and her reputation.


In the mortgage industry, otherwise decent people may see an opportunity to cut corners, bend the rules or even break the law to get a loan done. They may rationalize their actions and their words may not always match their behavior.

As soon as the mortgage brokerage was notified by the lender client about their suspicions, they took the right steps to look into this situation. And our SFFR investigator focused on the facts, not the LOA’s words of protest.

If an individual is truly innocent, we should be able to verify the facts that resolve the concerns. But if you suspect that a player in the loan origination process is lying, report your suspicion to Freddie Mac. 

To stop fraudsters before they get too far:

  • Contact the Freddie Mac Fraud Hotline at 800-4 FRAUD 8.
  • Send us an email to [email protected].
  • Submit a question or report suspected fraud through our short feedback form.