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Reverse Mortgage Exec Responds: ‘No Basis’ for Civil Complaint

A former reverse mortgage executive and consultant has responded to civil charges of fraud levied by her former employer, saying they have “no basis” and that the executive was dropped by the company after the acquisition of a reverse mortgage servicer. This is according to court filings obtained by RMD.

In the civil suit, filed last month by Mortgage Assets Management, LLC (MAM) in the U.S. District Court of Massachusetts, the company alleges that former reverse mortgage executive and consultant Cheryl MacNally inappropriately directed MAM to spend millions of dollars with reverse mortgage firm Harbor View Consulting, while she maintained an ownership stake in Harbor View that had allegedly not been made known to MAM at the time the services were provided.

That is not the case, according to a response to the initial complaint filed by counsel for MacNally and Harbor View. The defendants contend that MAM was “fully aware” of an ongoing relationship MacNally maintained between herself and the consultancy, and that MacNally was essentially leveraged by MAM for her reverse mortgage industry knowledge and reputation to facilitate the purchase of Reverse Mortgage Solutions (RMS) from Ditech Holding Corporation last year.

MacNally’s work allowed MAM to obtain approvals from the Department of Housing and Urban Development (HUD) and Federal Housing Finance Agency (FHFA) to acquire mortgage servicing rights (MSRs), the response reads. Once the acquisition of RMS was completed, MacNally explained that MAM remained understaffed, complicating the incorporation of RMS into its new corporate structure, the response explains.

“RMS would run independently and provide corporate services to MAM,” the response reads. “MacNally would be pushed out. Still unsatisfied with her ouster, MAM’s new guard now brings this baseless suit.”

The response goes on to deny the core allegations specified by MAM in its initial complaint. No trial date has been set, but both parties are seeking the relief of a jury trial.

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 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.