Freddie Mac, one of the nation's largest investors in residential mortgages, has posted a video on YouTube to keep borrowers from losing their homes to cons. In this time of rising mortgage rates, desperate homeowners have been lured by offers of assistance – only to be cheated out of equity they’ve built up and tricked into transferring ownership of their home. Freddie Mac reportedly created the anti-fraud video after a 2007 company-sponsored study discovered that 25 percent of delinquent borrowers go to the Internet first for mortgage information.
Freddie Mac's two-minute video uses actors to demonstrate how con artists can:
- Get copies of foreclosure notices at city hall or a county courthouse;
- Persuade distressed borrowers to give up property deeds in exchange for suspicious promises to solve their financial problems;
- Use the deeds to secure new loans for themselves; and
- Let the new loans go into foreclosure anyway.
On a related note, the Attorney General’s Office has requested legislation to reduce foreclosure rescue schemes. This important bill would require a written contract with clearly disclosed terms. It would also require that the homeowner receive at least 82 percent of the difference between the property’s fair market value and the underlying mortgage in the event of a sale to a third party.