Three defendants who pleaded guilty in a $2.5 million reverse mortgage scheme could face 30 years in prison for their crimes.
The defendants, two loan officers and one title agent, pleaded guilty today in the Southern District Court of Florida to one count of conspiracy to commit wire fraud for their participation in the HECM fraud scheme, which defrauded Genworth Financial Home Equity Access Inc. and the Federal Housing Administration.
Louis Gendason and John Incandela, former loan officers at Fort Lauderdale- and Boca Raton, Fla.-based 1st Continental Mortgage solicited individuals from around the country to refinance their existing mortgages into reverse mortgages with Genworth, according to statements made during the plea hearing. Gendason altered home appraisals to fraudulently inflate the borrowers’ home values, then submitted those appraisals to Genworth. Based on that false documentation, Genworth approved and FHA insured more than $2.5 million in reverse mortgage loans.
A third defendant, Kimberly Mackey, a licensed title agent at the time and owner of Pittsburgh-based Real Estate One Land Services Inc. fraudulently closed the loans and failed to pay off the borrowers’ existing mortgages. Mackey acted as the designated closing agent and attempted to conceal the fraudulent closings by preparing false HUD-1 documents.
The defendants then conspired to create fictitious offers to buy some of the borrowers’ properties, in the form of short sales, according to the Department of Justice.
They were charged in July, and upon their convictions, will face sentencing in November with a maximum sentence of 30 years in prison. A fourth defendant is scheduled to appear in court on August 10.
Written by Elizabeth Ecker