Mazella, founder and president of the Great Atlantic Group, a Staten-Island based real estate and financial consulting company was found guilty of charges of securities fraud, wire fraud and money laundering. The trial lasted two weeks and included evidence of reverse mortgage proceeds being used in the Ponzi scheme.

“Mazella encouraged several investors, typically senior citizens, to apply for reverse mortgages on their residences and to invest the proceeds with him,” according to court documents. “From approximately January 2007 until approximately December 2010, investors gave Mazella more than $14 million. By January 2007, though, the evidence showed that Mazella was operating Great Atlantic as a Ponzi scheme in which he paid returns to investors from existing investors’ deposits or money paid by new investors.

Mazella used some of the proceeds on personal expenses as well.

“The evidence at trial showed that the defendant callously and systematically defrauded his victims of their lives’ savings. Mazella’s victims, many of whom are senior citizens on a fixed income, turned to him to ensure their security in their golden years. Instead, their security was raided to fund his fraud, and they will feel the impact of Mazella’s crimes for the rest of their lives,” said United States Attorney Lynch.

The case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force.

Written by Elizabeth Ecker

The CFPB started knocking on lenders’ doors. One mortgage company told RMD it will be audited by the new agency starting next week, including an a two-week on-site visit from CFPB reps. The agency is still coming under fire for its unprecedented authority and the controversial recess appointment of its first-ever director, Richard Cordray.

In other CFPB news… the agency is under way with a reverse mortgage industry study. The deadline for the study is July 21. For that study, it will be seeking the input of industry participants. It will also do a study to develop recommendations on best practices for financial advisors who work with seniors.

Mortgage servicers signed historic settlement for $25 billion. The ongoing robo-signing saga ended in the five largest servicers, Bank of America, J.P Morgan Chase, Wells Fargo, Ally Financial and Citigroup ponying up funds to cover some consumer losses as well as steep fines for illegally foreclosing on hundreds of thousands of American homeowners. Bank of America was on the hook for a separate $1 billion sum for HAMP and FHA loan violations.

A House bill was introduced to help the FHA insurance fund in “time of crisis.” A House subcommittee approved a bill Tuesday to help the Federal Housing Administration “shore up” the health of the Federal Housing Administration’s mortgage insurance fund.

A new rule requires all mortgage lenders file fraud reports. All nonbank residential mortgage lenders will be required to submit suspicious activity reports (SARs) to the Financial Crimes Enforcement Network (FinCEN) as specified under a new final rule announced Tuesday by the Treasury.

Written by Elizabeth Ecker

“The reverse mortgage study is in progress and we are working to meet the July 21 statutory deadline,” a CFPB spokeswoman told RMD in an email. “We have started to reach out to industry participants for information, and we will continue to do so over the next several months.” That study is being conducted by the bureau’s Research and Markets team, and is a stipulation mandated by Dodd-Frank, which also specified the creation of the agency when it was signed into law in July, 2010.

A separate effort is also under way by the CFPB’s Office of Older Americans to protect older consumers with regard to financial products. That office, established in October, is led by director Skip Humphrey who told RMD in a press call upon his appointment that the office will work toward protecting seniors’ homes.

“Recommendations on best practices concerning financial advisors who work with older Americans is a separate effort and work on those recommendations is underway,” the spokeswoman told RMD. “More details about both efforts will be announced when this material is ready for public dissemination.”

Until then, reverse mortgage advisors and “industry participants” may receive calls from the CFPB on their practices for research purposes. The agency has not specified whom those participants will be.

Additionally, the agency’s enforcement of regulations concerning non-bank lenders could warrant separate visits from the CFPB, with that enforcement being projected to begin any day.

Written by Elizabeth Ecker

As part of the global, $26 million settlement, Bank of American will pay $1 billion to resolve the wrongdoing during the investigation, including an immediate payment of $500 million toward recovery for harm done to the Federal Housing Administration by practices conducted by Countrywide. The remaining $500 million will be deferred to fund a loan modification program for Countrywide borrowers with underwater mortgages, according to FHA.

Any remainder of the $500 million designated for loan modifications will be returned to the federal government after three years, according to the agreement.

“We are committed to protecting the FHA’s ability to provide assistance to qualified low income and first-time home-buyers, and this settlement goes a long way toward that end. It also puts lenders on notice that they will face serious financial consequences for violating their obligations under the FHA’s programs,” stated United States Attorney Loretta Lynch.

The joint federal-state agreement is part of enforcement efforts by President Barack Obama’s Financial Fraud Enforcement Task Force.

Written by Elizabeth Ecker

In a letter sent January 27 to Sen. Michael Sanchez (D-N.M.), NRMLA stressed concerns regarding the Mortgage Fair Foreclosure Act, which states that in New Mexico, “homeowners should be given reasonable notice of the fact of and basis for an alleged default on their mortgage, apprised of all loss mitigation methods available to them in connection with their home loans prior to the loss of their home and afforded a meaningful opportunity to participate in loss mitigation to prevent the loss of homeownership.”

The bill includes loss mitigation efforts such as a review and underwriting of income to assess a borrower’s ability to stay in the home under a revised loan modification plan, NRMLA explained. Such payment plans have no relevance to a reverse mortgage.

While it is not a reverse mortgage bill, per se, it could impact all servicers, NRMLA notes.

“If the borrower is in default under his or her HECM mortgage because of failure to pay property taxes and/or hazard insurance, HUD has robust procedures in place for servicer to assist seniors in curing such a default, including post-closing servicing related counseling with HUD-approved counselors,” the NRMLA letter states.

The provisions are designed to account for the unique features of reverse mortgage loans, NRMLA writes, urging an amendment to the bill that would exclude reverse mortgages.

View the New Mexico Senate Bill.

Written by Elizabeth Ecker

The list continues to grow. Check out the opportunities below.

Operations

• Servicing operations and management (Lansing, MI) Celink

Originators/Marketing

• Retail Sales Manager (Northern N.J.) Nationwide Equities
• Reverse Mortgage Loan Originator (Mich., Fla.) The Reverse Mortgage Center
• Reverse Mortgage Processor (Melville, NY) Urban Financial Group/Robert Wagner Reverse Mortgage
• Servicing Oversight Manager (Tulsa, OK) Urban Financial Group/Robert Wagner Reverse Mortgage
• Loan Officer – UFG/Robert Wagner Reverse Mortgage (Philadelphia, PA) Urban Financial Group/Robert Wagner Reverse Mortgage
• Fed Charter Now Hiring Reverse LO’s Nationally (Nationwide) RLO/RecruitingLoanOfficers
• Loan Officer (Nationwide) Reverse Mortgage USA
• Reverse Mortgage Sales Executive (Select States) Reverse Mortgage Solutions
• Reverse Mortgage Originator (Plainville) Reverse Mortgage of New England
• Reverse Mortgage Loan Associate (NY, NJ, PA, CT) Residential Home Funding Corp.
• Reverse Originator/Branch Manager (Not specified) Open Mortgage
• Wholesale Account Executive (NY, NJ, CT, FL, PA, ME) Nationwide Equities
• Reverse Mortgage Specialist (Various) Genworth Financial
• Wholesale Account Executive – Reverse Mortgage (Richmond) Genworth Financial
• Reverse Mortgage Loan Specialist (Various, Southeast) First Century Bank
• Reverse Mortgage Consultant (Northern CA) 1st Reverse Mortgage USA, a Division of Cherry Creek Mortgage Co., Inc.
• Reverse Mortgage Consultant (Texas) 1st Reverse Mortgage USA, a Division of Cherry Creek Mortgage Co., Inc.
• Reverse Mortgage Consultant (Washington State) 1st Reverse Mortgage USA, a Division of Cherry Creek Mortgage Co., Inc.
• Reverse Mortgage Consultant (Colorado) 1st Reverse Mortgage USA, a Division of Cherry Creek Mortgage Co., Inc.
• Reverse Mortgage Branch Manager (Nationwide) 1st Reverse Mortgage USA, a Division of Cherry Creek Mortgage Co., Inc.
• Reverse Mortgage Consultant (Southern CA) 1st Reverse Mortgage USA, a Division of Cherry Creek Mortgage Co., Inc.
• Reverse Mortgage Originators (Various) First National Bank

Visit our website for additional opportunities in the reverse mortgage industry.

The best and the brightest read RMD. Want them to join your team? Post your jobs to Reverse Mortgage Jobs Online today!

The settlement comes after months of evidence gathered with regard to servicers foreclosing on homeowners without going through the legal process of measures to help those mortgage holders refinance their loans or become current on payments in order to stay in their homes.

“This is the largest joint federal state settlement in the history of this nation,” said Attorney General Eric Holder in a press conference following the announcement. Not only will the settlement help to right the wrongs that have been done, Holder said, but there will be new measures in place to prevent future wrongful foreclosures from occurring as well.

“More work must be done,” Holder said. “We have taken steps to ensure claims released through this settlement will not interfere with current investigations.”

Mortgage industry representatives began to react Thursday following the announcement.

“A final agreement can play an important role stabilizing and providing certainty and confidence to the housing and mortgage markets,” said Mortgage Bankers Association President David Stevens in a written statement. “With all the rumors and speculation surrounding these negotiations behind us, it is now imperative that policymakers, lenders, servicers and other stakeholders work together on policies and initiatives that will allow us to get the housing market on the road to recovery. I would caution, though, that, while a positive step, this will not be a panacea for all that ails housing.”

Part of the settlement will ensure that victims of the robo-signing process, numbered in the hundreds of thousands, will receive payouts of $2,000. Another portion of the settlement will go to writing down principal on loans held in the bank servicing portfolios and some will go toward refinancing borrowers who are currently underwater on their home loans.

Written by Elizabeth Ecker

The top three issuers as of quarterly data reported in November 2011 measuring original principal balance were Urban Financial ($178 million), MetLife ($136 million) and Reverse Mortgage Solutions ($117 million). This compares with the top three issuers as of November 2010: Bank of America ($246 million), Wells Fargo ($229 million) and Reverse Mortgage Solutions ($135 million).

Ginnie Mae says that despite the changes, the outlook for HMBS issuance is bright, with several lenders stepping in to begin issuing in 2012 or already with issuance under way.

“When those issuers left, others stepped up to help volume,” says Ted Tozer, president of Ginnie Mae, noting the entries of Knight Capital Group and Quicken Loans into the issuer landscape. “People are getting out, people are getting in, but people perceive that seniors are going to need to tap into equity in their home to supplement retirement savings and social security,” he says. “The capacity is there.”

One such lender, Urban Financial Group, received its approval in the first quarter of 2011 and began issuing shortly thereafter. It has since risen through the ranks to the top-5 issuers and completing the greatest issuance of that group according to Ginnie Mae’s issuance tracking as of November 2011.

Urban has attributed much of its recent success to its HMBS pools, and reported in its fourth quarter and annual earnings conference call in January that it completed $450 million in HMBS during that quarter.

“We are very pleased that we were among the top issuers of HMBS and we fully expect to be a leading issuer in 2012,” Steve McClelland, Knight managing director and Urban Financial’s chief executive told RMD.

Another Top-10 lender received approval in 2011, but has yet to complete any issuance. One Reverse Mortgage, a division of Quicken Loans, has its approval and plans to begin issuing soon, but is mum on the details of when that will happen.

“We are following our plan and are looking at it closely this year,” Gregg Smith, One Reverse president. “It’s one of our initiatives. We’re growing.”

The newer Ginnie Mae issuers have been subject to increased capital requirements, which has ruled out some potential issuers.

The changes, along with a moratorium on new issuers, seem to have done what they set out to do, says Michael McCully, partner with New View Advisors.

“The whole point of capital requirements being revised was to level the playing field,” McCully says. “The folks coming in are relatively sophisticated. They’re all sensitive to it being a big deal and they understand the capital requirements.”

As for what Ginnie Mae is seeking, that capital is key.

“People need to be aware under Ginnie Mae rules, once the balance is 98% a loan must be re-bought,” Tozer says. “They must be prepared to show us how they’re planning to fund that buy. That’s the biggest challenge.”

Written by Elizabeth Ecker