True Lies: Forged CPA Letters in 10 Loans
When one of our Seller/Servicers 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 SFFR investigator opened an investigation, focusing on ten loans with several aspects in common:
- All ten loans were originated by the same loan officer.
- The borrowers were all either self-employed or owned or managed a restaurant.
- Each borrower’s loan file contained a letter from the same certified public accountant (CPA).
The letters appeared authentic, including the CPA’s letterhead and signature. Some of the letters mentioned use of funds, stating that borrowers could withdraw money from their business’s profits to help pay for a home without negatively affecting the business.
However, when our investigator interviewed the CPA − whose name appeared in both the letterhead and as his signature − the CPA confirmed that the letters were not from him.
Employees involved in the origination of the ten loans claimed that they couldn’t find a CPA who would validate the use of the borrowers’ business funds to qualify them for their loan.
Verifying Borrower Information
The falsification of the letters themselves cast doubt on the information contained in the letters and other information in the loan files.
The falsification of documentation in these ten loans didn’t end with the CPA letters; the investigator also learned that, in some cases, borrowers’ loan files included altered profit and loss statements and at least one falsified verification of employment (VOE).
If you’re not certain whether a letter from a CPA is valid, contact the person whose name appears on the letterhead and ask them to verify that they wrote the letter and confirm that the borrower in question is actually one of their clients.
- Ten loan files contained letters from a CPA that appeared authentic.
- Our investigator doubted the letters’ veracity; the CPA confirmed they were forged.
Let us know by contacting the Freddie Mac Fraud Hotline at 800-4 FRAUD 8. You can also submit a question or report suspected fraud through our short feedback form.