In an industry letter this week to its sellers and servicers, Freddie Mac Executive Vice President Paul Peterson said that the company has become aware of serious allegations of loan origination improprieties and fraud in certain parts of the country and is actively pursuing its own investigation. Areas of the Pocono mountains of eastern Pennsylvania have received publicity from the allegations in connection with loan originations over the past several months.
Mr. Peterson said that these allegations have been made primarily in local newspapers and in various lawsuits, including a class action lawsuit filed on behalf of Borrowers in the United States District Court for the Middle of Pennsylvania. The lawsuit accuses certain local builders and lenders of “inducing customers” to purchase new construction houses “at prices well in excess of the houses’ actual fair market value.”
“At this time, we are gathering data from multiple sources and taking time to fully and fairly analyze information pertinent to each area of concern,” Mr. Peterson said in his letter. “We are also working closely with law enforcement agencies in these areas.”
The letter said that Freddie “abhors any action that denies homebuyers fair treatment in the purchase of decent, safe and affordable housing,” and that it “is committed to working with mortgage originators, servicers and others in the real estate community to help more families become successful long-term homeowners and realize the full benefits of homeownership.”
