Fake Employer Mortgage Fraud Widespread in California

A mortgage scam in California where fraudsters provide fake employer information on loan applications is more widespread than originally suspected, Fannie Mae said in a new fraud alert.

Fannie warned lenders about the scam in May, when it was first identified in Southern California. The new alert expands the scope of the fraud to Northern California and also adds 10 alleged fake companies being used on the fraudulent loan applications.

It’s unclear whether the geographic reach of the scheme has spread since the initial warning or if it was occurring statewide to begin with. However, the fake employers have been found in loan applications taken between 2015 and 2018.

“If one of these entities is disclosed as the borrower’s place of employment, exercise due diligence in reviewing the entire loan file,” Fannie Mae advises in the alert. “Lenders must exercise caution in these situations and take appropriate steps.”

Other red flags associated with the fraud scheme include:

• Brokered and other third-party originated loans
• Employment and salaries listed that seems disconnected with borrowers’ ages or experience
• Short times listed for current jobs
• Previous employment listed as “student”
• Paystubs with generic formatting or that don’t include withholdings for medical and retirement benefits
• Letters for substantial gifts that can’t be reverified

Fannie Mae’s list of the alleged fake employers includes 45 companies with California addresses:

https://www.nationalmortgagenews.com/news/fake-employer-mortgage-fraud-widespread-in-california-fannie-mae-warns