Responding to a Freddie Mac "Quality Control Program" letter

[FEDUKE404]

Today I received in the mail a very formal set of documents, including "Quality Control is performing a post closing audit for the above mentioned applicant. Please review the attached document and confirm if the information provided is valid and accurate." The letterhead/cover sheet appears to be legit and shows an Edmund, OK return address.

Among other things, they have included photocopies of the client's 2012 and 2013 Forms 1040 (pages 1 and 2 only), along with the "please re-verify....indicate correction" etc. response boxes on each tax document. The two returns have now been "signed" by the clients (both showing a date in early 2014), although the returns were timely efiled with use of Forms 8879.

They also show, in bold letters, "PAYMENT OF CHARGES NOT AUTHORIZED."

I have never seen anything like this. My first response is to ignore the whole thing, if for no other reasons than client privilege and my time that would be wasted on such paperwork. And on a more relevant level, the mere filing of the two tax returns by me should already imply the obvious.....the returns verify what the client provided to me at the times of preparation, using normal preparer due diligence but not an audit-type inquiry to verify what was shown.

Oh yes: There is no telephone response number, although there is a "Refund Fax Number" shown.

Suggestions? ? ? ?

Thanks!

FE

[Roland Slugg]

I would not respond to that. Wouldn't even consider it. I would, however, advise my client that I received it.

You said the letterhead LOOKS legit ... but is it? In your post you didn't say who sent it. My instincts tell me it's some sort of phony BS ... a phishing scheme of some kind. The only part that concerns me is the tax return pages. How were those obtained?

You also indicated the doc refers to a "post closing audit." That would indicate that the loan in question is a done deal. If that's true, there is nothing to gain by responding to that "official looking" letter.

One more thing: Look at the envelope it came in. Does the postage say "Presorted Standard?" If so that means it is "junk mail."

[Y2KEA]

Is a postage paid envelope included for the returned documents?
If not, I would ignore it.
If an envelope is included, I would return all documents without any answers and include a cover sheet to the effect of:
Due to federal privacy protection laws, I can neither confirm nor deny at this time that these are my clients. Send me a section 7216 release with the original documents & I will review my files in order to ascertain if they are. My fee for filling out your forms is $XXX. This is payable in advance. If the fees are not paid, you will not get a response.

[FEDUKE404]

Initial response to Monday posts

I have minimal doubt the inquiry is legit. My major concern is privacy of the client AND whether I am (professionally or otherwise) bound to respond to such a request.

Letterhead (cover sheet) shows following:

Freddie Mac ("We make home possible")
Quality Control Program
3001 Technology Drive
Edmond, OK 73013-3734

Enclosed with the letter are the aforementioned copies of the 2012 and 2013 Form 1040, as well as a photocopy of a document showing IX. Acknowledgement and Agreement form. All three bear the signatures, which I recognize, of both the husband/wife involved. Shown on that third document is "Acknowledgement. Each of the undersigned hereby acknowledges that any owner of the Loan, its servicers, successors and assigns, may verify or reverify any information contained in this application or obtain any information or data relating to the Loan, for any legitimate business purpose through any source, including a source named in this application or a consumer reporting agency."

The outer envelope shows it was mailed from ZIP code 73013 on 08/20/2014, and postage is 40.6¢ (First Class Presort rate?). FWIW, the ZIP code on the (postage prepaid) return envelope is 73013-9969 which, if I understand the USPS, is likely a post office box containing those numbers? The control envelope does show 3001 Technology Dr (same as on cover sheet) as well as a bar code (who knows!!) at the bottom.

I do recall having contact with the clients in late spring of this year, where they asked for (additional) copies of their 2013 and 2014 income tax returns. At the time they advised they were involved in a refinance matter. The source of the funds for the refi was not mentioned. However, one can reasonably assume the loan was processed??

Pending further advice and input from TTB members, I am leaning toward ignoring the whole thing (privacy mainly) or something close to what Y2KEA has suggested. It might be necessary to restate that the cover letter has, in very large letters inside a box, "PAYMENT OF CHARGES NOT AUTHORIZED," which I assume means an invoice to "Freddie Mac" would be automatically ignored.

Once I have a better idea of where I might/might not be going, I will definitely contact the clients to get their version of the story before I take any further actions.

I will check in here later. Thanks for the input!

FE

[WhiteOleander]

If the loan company wants to verify that the copies of the returns they mailed to you are the returns that were actually filed, all they need is to request a transcript. It seems to me they are asking you to confirm the actual income reported on the returns. No way.

[FEDUKE404]

Link of relevant interest

Found with a Google search:

LINK --->>> Read Me!!

FE

[JohnH]

I've received these letters on clients before. That's a common auditing technique and they're probably legitimate, but I'm not going to try and find out. I just stuck them in the clients' file and left them there unanswered. No way I'd confirm anything to a third party.

[Roland Slugg]

Here's a link you might find informative and useful. http://www.freddiemac.com/singlefami..._practices.pdf

Chapter 5 would appear to be the relevant one.

It appears to me that Freddie Mac's QR program is between that agency and the lenders it buy loans from. I don't understand why you got that letter and request for information/verification. I would not respond.

[JohnH]

It also tells you something about how careless the agency is with confidential info.

[Burke]

I got one of these letters in 2012 on my own daughter's loan, as I was the tax preparer, regarding the 2010 and 2011 returns. It is a "post-closing" quality control measure mandated by their own guidelines. It stated that FreddieMac Quality Control had contracted with ADFITECH to review a percentage of loans each month on a random basis. (Return address same as given in these posts.) FMAC apparently furnishes the tax return copies with a letter to the preparer to verify accuracy, with the SSN's truncated. I suppose in cases where the return is mailed in, it could be a fraudulent return and not what the preparer actually prepared. With e-filing by a paid preparer, unlikely. The only thing the preparer does is answer two questions: "Is the information on the attached tax document accurate for the year(s) indicated?" and "Does the information on the attached document reflect all the applicable amendments?" Also attached should be a photo of an authorization signed by the loan applicants that says in part "....Each of the undersigned hereby acknowledges that any owner of the Loan, its servicers, successors and assigns, may verify or re-verify any information contained in this application ............." The only information on the letter to identify the client is the last name and some code numbers at the bottom. Only that is returned to the QC controllers. This is assuredly the result of the "liar loans" once so prevalent. Whether it accomplishes anything, I can't say. It certainly is a CYA move on the part of the buyer of the mortgage. And since that is a taxpayer-subsidized entity, well, you can see where this is going.....

[ttbtaxes]

I would not respond, period.

Unless we get consent from our clients in advance, we can't even acknowledge the taxpayer/loan recipient is a client.

[Burke]

I think you are not giving weight to the authorization form the clients have signed to get the original loan, which authorizes the release and/or re-verification of the information to the lender, its successors and assigns. And since your name/address is on the return, FMAC already knows who prepared it and that they are your client. I would still contact the client to let them know what is going on; if they had an objection, I would ignore it as well. I don't think the loan can be rescinded unless fraud were involved.

[FEDUKE404]

Initial request issue

I think you are not giving weight to the authorization form the clients have signed to get the original loan, which authorizes the release and/or re-verification of the information to the lender, its successors and assigns. And since your name/address is on the return, FMAC already knows who prepared it and that they are your client. I would still contact the client to let them know what is going on; if they had an objection, I would ignore it as well. I don't think the loan can be rescinded unless fraud were involved.

Your point is correct and duly noted. Obviously, they do know that I was the preparer of the relevant tax returns.

I am, however, still having a bit of a problem with the request to "confirm if the information provided is valid and accurate."

Suggestions?

FE

[S T]

Just received one these "Freddie Mac Quality Control" requests, with copies of 2012 and 2013 form 1040 page 1 and 2. I am not inclined to sign and return. It is a "post closing notice"

I agree with prior postings on this thread, they can verify by obtaining IRS transcripts, I should not as preparer of the return have to verify.

They included a Borrower's Certification and Authorization, signed by the borrower/taxpayer, however, I see nothing in the "Authorization" to realease Information (5 items) that applies to me as a preparer personally.

I am just going to save to the Client's file, notify the client that I am not responding to the notice.

Any other thoughts on the matter of "verifying" tax documents by lenders?

Thanks

Sandy

[TAXNJ]

4-21-15 mortgage companies

See 4-21-15 "MORTGAGE COMPANIES" Thread/Post

Might be same issue different name