Dip in FHA 2010 Market Share Stems from Fewer Reverse Mortgages, says GAO
23.05.12
The communication shows the FHA’s loan volume growing from less half a million, and $70 billion in mortgage bond in 2006, to 1.7 million loans, for $319 billion in 2010. These numbers represented a abatement from 2009′s levels of 1.9 million loans and $350 in mortgage warranty, which the GAO attributes to a decrease in the number of refinance and reverse mortgages FHA insured.
Nevertheless, the FHA insured 40% of all home mortgages, the communiqu found, up from 4.5% in 2006.
“While FHA has taken steps to identify risks in its single-family programs, it has not combined these chance assessment efforts and lacks annual assessments and tools to anticipate risks from changing conditions,” says the GAO.
“FHA should upon an integrated risk assessment strategy, conduct annual risk assessments, inaugurate ongoing mechanisms to anticipate emerging risks, and develop workforce and successively plans,” was the GAO’s recommendation. “HUD agreed with the recommendations, stating that it was either currently working toward achieving the recommendations or had plans to do so in the very nigh future.”
View the GAO report, Improvements Needed in Risk Assessment and Kind-hearted Capital Management .
Source: Reverse Mortgage Daily
Two Individuals Sentenced in Connection with $2.5 Million Reverse Mortgage and ...
23.05.12
Kimberly Mackey, 47, of Pittsburgh, was sentenced to 60 months in CHE = 'community home with education on the premises', five years of supervised release and ordered to pay more than $1.6 million in restitution. Marcos Echevarria, 29, of Palm Careen, Fla., was sentenced to 24 months in prison, five years of supervised release and ordered to pay more than $1.6 million in restoration. Louis Gendason, 42, of Delray Beach, Fla., and John Incandela, 24, of Palm Run aground are scheduled to be sentenced on Dec. 16, 2011.
A reverse mortgage, also known as a Home Equity Conversion Mortgage, allows borrowers who are at least 62 years of age to convert the even-handedness in their homes into a monthly stream of income, or a line of credit. Unequal to the traditional mortgage loan scenario, in which borrowers make monthly payments to a mortgage lender in happiness of their outstanding loan, in a reverse mortgage loan scenario, the mortgage lender purchases borrowers’ disinterest and makes installment payments to the borrower.
According to the information and statements made during the August 2011 hearing in the covering, from May 2009 through November 2010, the defendants engaged in a reverse mortgage scheme that defrauded unwitting borrowers, Genworth Fiscal Home Equity Access Inc., and the Federal Housing Administration (FHA). Working as credit officers, Incandela and Echevarria solicited seniors to refinance their existing mortgages with a reverse mortgage credit financed by Genworth. To qualify the borrowers for these loans, a third defendant, Gendason, altered true estate appraisals to fraudulently inflate the value of the borrowers’ properties. In factors, however, none of the borrowers had sufficient equity in their properties to qualify for a reverse mortgage. The defendants then submitted the fraudulently overstated appraisals to Genworth. Based on the false documentation, Genworth approved and the FHA insured more than $2.5 million in reverse mortgage loans.
As part of the strategy, Mackey, a licensed title agent, fraudulently closed the Genworth loans and did not pay off the borrowers’ existing mortgage loans. Mackey attempted to camouflage the fraudulent loan closings by preparing false settlement documents that showed that the existing mortgages had, in fait accompli, been paid off. The defendants divided up the loan proceeds and used the percentage for their personal benefit.
The defendants further engaged in a loan modification scheme to cover the existence of the Genworth reverse mortgage transactions from the original mortgage lenders, whose loans remained unsalaried. To this end, Gendason, Incandela and Mackey conspired to create fictitious offers to buy some of the borrowers’ properties, in the model of “short sales.” A short sale is a trade of real estate in which the sale proceeds are less than the balance owed on the loan to the mortgage lender, but avoids foreclosure and consanguineous costs. In other instances, to hide the existence of the Genworth reverse mortgage accommodation from the original lenders, the defendants made monthly mortgage payments to the borrowers’ true lenders.
The sentences were announced by Tony West, Assistant Attorney Non-exclusive for the Justice Department’s Civil Division; Wifredo A. Ferrer, U.S. Attorney for the Southern Division of Florida; Timothy A. Mowery, Special Agent in Charge, U.S. Department of Cover and Urban Development, Office of Inspector General (HUD-OIG); Jose A. Gonzalez, Odd Agent in Charge, Internal Revenue Service-Criminal Investigation (IRS-CI); Henry Gutierrez, Inspector in Entrust, U.S. Postal Inspection Service; John V. Gillies, Special Agent in Bill, FBI, Miami Field Office; and J. Thomas Cardwell, Commissioner, State of Florida’s Job of Financial Regulation.
“These defendants orchestrated a mortgage fraud scheme targeting some of the most W and valuable members of our community – our elders,” said Tony West, Unite with Attorney General for the Civil Division of the Department of Justice. “The court’s brittle sentences reflect the seriousness of their crime and the Justice Department’s resolve to oppose financial fraud perpetrated against consumers.”
The case was investigated by HUD-OIG, IRS-CI, the U.S. Postal Inspection Professional care, the FBI and the Florida’s Office of Financial Regulation, with assistance from the U.S. Secret Service and Genworth Pecuniary Home Equity Access. The case was prosecuted Kevin J. Larsen, a Enquiry Attorney in the Justice Department’s Consumer Protection Branch, and Assistant U.S. Attorneys Jeffrey H. Kay and Thomas Lanigan.
Informant: justice.gov
Source: eNews Park Forest
