FinCEN Forms Partnership to Combat Emerging Reverse Mortgage Fraud Says Director

February 19th, 2010 | by John Yedinak Published in News, Reverse Mortgage | 11 Comments

The Financial Crimes Enforcement Network (FinCEN), Secret Service, and HUD-OIG formed a partnership in December to help Florida law enforcement proactively identify and combat newly emerging fraud involving reverse mortgages said James H. Fries JR, Director of the FinCEN during a speech at the Florida International Bankers Association earlier this week.

“As many of you know, the HECM is an option that can give senior citizens greater financial security by providing access to some of the equity in their homes,” said Fries. “Many seniors use this money to supplement Social Security, meet unexpected medical expenses, or make home improvements.”

However, as with other mortgage-related frauds, the agency is seeing inflated appraisals and property flipping. Regulators are also seeing seniors duped into buying financial products not in their best interest and outright thefts of proceeds of the reverse mortgages.

“It is often difficult to discern that a fraud has even occurred until the victim is deceased, since a HECM loan is not due as long as the borrower is living in the house,” Freis said.

The most troubling aspect of HECM fraud is that it takes advantage of our nation’s senior citizens who have worked hard over their entire lives to own their homes said Freis.

To combat these frauds head-on, FinCEN is working closely with HUD-OIG and the Secret Service to proactively analyze data and identify hot-spots of suspected HECM and other mortgage fraud activity, providing law enforcement with a more defined battleground to direct their resources.

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The_Critic

This is a welcome development especially if they correctly identify the fraud by the activity rather than striking out at the reverse mortgage product.
CATHERINE1000

OFLMAO-

YEAH THE SAME PEOPLE THAT NOTICED ALL THE PROBLEMS IN THE MORTGAGE AND INVESTMENT BANKING INDUSTRIES ARE WORKING HARD ON THIS, WHOAAAA BOY, THAT'S NICE…………..

THIS IS JUST THE LAST HURRAH IN THE MORTGAGE INDUSTRY BEFORE IT TOO IS ALSO NATIONALIZED…………….WHICH IT JUST ABOUT IS………..

SINCE 07 MANY SENIORS HAVE BEEN ROBBED AND WITH PRICES FALLING AT CHAINSAW RATES – THESE ARE JUST MORE LOSSES FOR THE TAXPAYER TO ASSUME DOWN THE ROAD.

IF YOU ARE OLD THOUGH I HAVE TO SAY THAT THIS WILL BE THE ONLY WAY, THE ONLY WAY THAT YOU WILL SEE ANYTHING OUT OF YOUR PROPERTY IF YOU ARE 70 OR ABOVE.

PROPERTY VALUES DIDN'T COME BACK UNTIL THE 50s AFTER THE CRASH IN THE 30s……………..PENSIONS AND INSURANCE FAILING NEXT…………….SO THESE LOANS WILL BE STOPPED SHORTLY………….
hecmpro

It would be nice to see some facts, exactly how many seniors have been affected in FL , What percentage of customers who take our a HECM end of with a fraud issue ?
REVGUYJIM

I don't know what the numbers are, but I'll guarantee you they are miniscule. Nonetheless, these isolated incidents will get all the press and “reverse mortgage” will be the common denominator.
treverse

Critc:
“correctly identify the fraud by activity rather than striking out at the reverse mortgage product”

Have you been living under a rock? The reverse mortgage industry has been and will continue to be under attack!

How “THEY” identify the fraud has no relevence. What matters is how it is reported in the biased media and we all know how that will go.
Evelyn

Let's be smart and support this type of oversight. It will make us look better, the product be safer, the senior feel more secure when they or their family consider the Reverse Mortgage product. Since we have nothing to hide, let the light shine in!
The_Critic

treverse,

Like those who attack this industry you pull things out of context and make partial quotations. No one said the product would magically no longer be attacked. All I said it was a “welcome development if…”

Please read what others write before you write. Or real simple, think before you attack.
treverse

Are you kidding? You attack everyone on every topic with your long winded arrogant crap! Maybe you need to get some sleep instead of writing comments in the middle of the night! It seems to be affecting your perception.
treverse

Criic:
It would be a welcome development if 10 million dropped out of the sky into my yard also but not very realistic.
That was my point “reality”
The_Critic

treverse,

10 million what? Your comments on this tread seem more reaction than expression of clear thought.

It is all right if you do not like this proposal. Maybe I am a Pollyanna on this point but I believe it would be helpful to bring out what the fraud actually was instead of merely reporting that fraud occurred and the funds used came from a reverse mortgage.
Anonymous

treverse,rnrn10 million what? Your comments on this tread seem more reaction than expression of clear thought.rnrnIt is all right if you do not like this proposal. Maybe I am a Pollyanna on this point but I believe it would be helpful to bring out what the fraud actually was instead of merely reporting that fraud occurred and the funds used came from a reverse mortgage.

FinCEN Forms Partnership to Combat Emerging Reverse Mortgage Fraud Says Director

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