Reverse Mortgage Players Subject of Lawsuit by RMS Parent Company

A mortgage executive and a reverse mortgage consulting company are the subjects of a lawsuit filed earlier this month by Reverse Mortgage Solutions (RMS) parent company Mortgage Assets Management, LLC (MAM).

The executive, Cheryl MacNally, formerly held prominent reverse mortgage roles with Wells Fargo and Generation Mortgage, and has recently served as president of MAM. MacNally is no longer employed by MAM, according to the company’s legal counsel.

In the civil suit, filed by MAM in the U.S. District Court of Massachusetts, the company alleges that MacNally inappropriately directed MAM to spend millions of dollars with reverse mortgage consultancy firm Harbor View Consulting, while maintaining an ownership stake in Harbor View that had allegedly not been made known to MAM at the time the services were provided.

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MAM alleges in its complaint that MacNally continued to work for, profit from and maintain an ownership stake in Harbor View during this time, in breach of her contract with MAM.

MacNally and Harbor View have vowed to “vigorously defend” themselves against MAM’s allegations, according to a statement provided to RMD by an attorney representing MacNally and Harbor View Consulting.

In a statement provided by MAM’s legal representation, the company stated the events described in the suit are not representative of the company.

“Mortgage Assets Management (MAM) believes that the complaint speaks for itself,” the statement says. “The events described in the complaint are not representative of our organization, and MAM is focused on the future and its business of being a best-in-class asset manager and provider of mortgage-servicing oversight and supervision services.”

Prior to her roles at MAM and Harbor View, MacNally served 19 years at Wells Fargo in which she worked as the national sales manager for the bank’s reverse mortgage division. She was elected co-chair of the National Reverse Mortgage Lenders Association (NRMLA) in July of 2010 during her time at Wells Fargo alongside John Nixon, then of Bank of America and the executive currently listed on Harbor View’s website as that company’s president.

During a long and protracted bankruptcy proceeding by Ditech Holding Corporation last year, MAM was identified as a “stalking horse bidder” for reverse mortgage servicing company RMS before its sale to MAM was ultimately completed in late September, 2019.

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  • Here we go again. Another perception hit against the industry no matter how it turns out. It doesn’t matter if someone failed to do their due diligence, there was an intentional failure to disclose, or there was some kind of misunderstanding between the parties, the image of the industry is always the loser.

    The question is should NRMLA act now, later, or not at all? As NRMLA goes so does the image of our being able to self regulate for the good of the whole.

  • Hate to see this, especially during these troubled times! Don’t get me wrong, no matter when the timing is, none of us in the industry, and our seniors need this.

    This will be a Black Eye on the reverse mortgage industry for a long time to come. What is such a crime is that this is not indicative of our industry. Just like our police around the country, a small percentage of bad Apples, destroy the rest of the Bushel!

    As far as should NRMLA acting now, later, or not at all, as Jim Veale pointed out? Great question Jim!

    We will all have to see the outcome of this dilemma, but it is not a good thing!

    John A. Smaldone
    http://www.hanover-financial.com

  • Should we not all reserve judgement on the merits of the case considering we’ve not seen any evidence of wrongdoing, only an accusation and a strong denial by the accused representatives? I would surely want people in this industry that I’ve been a member of for 22 years, to if not give me the benefit of the doubt because of my reputation in this industry, give me the chance to defend myself in a court of law before passing any judgement.

    What should NRMLA do when no one has been convicted of anything yet? Cheryl has been involved in the reverse mortgage business for about 20 years and she doesn’t get a chance to defend herself before being abandoned by the industry and deemed guilty?

    God forbid that’s how our justice system works.

    These views are my own and not necessarily those of my employer.

    • Brian,

      Your points brought up are well taken and I see where you are coming from. You are right, we all should be reserving judgement on the merits of the case, considering we’ve not seen any evidence of wrongdoing yet. You are also right by pointing out at this point it is only an accusation. And yes, there is a strong denial by the accused.

      However, any type of news media releases of this nature, whether it is justified or not, unfortunately does not help our industry at this time in our society.

      Like I said in the beginning of my reply Brian, your points are well taken and should taken very seriously!

      John A. Smaldone
      http://www.hanover-fianacial.com

      • John,

        Thanks for your email, good to hear from you. I understand your point.

        However the lawsuit has nothing, absolutely nothing to do with reverse mortgages. It has nothing to do with a reverse mortgage borrower. It has nothing to do with a reverse mortgage originator. It doesn’t even have anything to do with a reverse mortgage servicer and an unhappy borrower or heir.
        It’s an internal squabble between a company and one of its employees that has been vigorously denied by the accused. It’s a personnell matter that occurs every day across all industries especially when employees have outside interests from their jobs. That’s why employment contracts are written such to ensure that self dealing isn’t tolerated. If that happened here, it’ll come out in the wash. If that gives our industry a bad name well I don’t know how to stop that because that stuff happens everywhere.

        Also, NRMLA plays an important role in our industry and we are lucky to have them thanks to the insightful individuals who put it together so many years ago. But they have no business getting involved in an internal companies policies and rules of employment, or in somehow being an arbiter or judge of whether or not those rules are followed.

        Brien

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