Fannie Mae, the Federal National Mortgage Association, has a Mortgage Fraud Program that alerts the industry about frauds and potential frauds.
The organization has come up with a list of over 60 apparently fictitious companies that have provided fake employment verification using fake pay stubs.
Borrowers who are trying to get a mortgage to buy a house would list these companies as their employer and utilize bogus paperwork, such as W-2 Forms and paycheck stubs to prove that they have enough income to qualify for the loan
What I don’t understand is why are all these fake companies based in California?
As a matter of fact, Fannie Mae lists as one of the red flags for potential fraud as:
“California (geographic common denominator)”