During these difficult financial times, title agents have created schemes that attempt to steal money from borrowers and financial institutions for their own benefit.
One recent example was in Minnesota where four defendants (one title agent, Kimberly Mackey, and three loan officers, Louis Gendason, John Incandela and Marcos Echevarria) have been charged for participating in a conspiracy to defraud $2.5 million in reverse mortgages and loan modifications from elderly borrowers, lenders and the Department of Housing and Urban Development.
According to the Department of Justice, the three loan officers worked at 1st Continental Mortgage in Florida where they solicited individuals who were 62 or older to refinance their existing mortgages with a reverse mortgage loan financed by Genworth Financial Home Equity Access Inc.
To persuade Genworth and HUD to fund and insure the reverse mortgage loans, the defendants allegedly changed the unsuspecting borrowers’ real estate appraisal reports to fraudulently represent equity in their properties. This scheme allegedly took place from May 2009 through November 2010 in seven states, resulting in approximately $2.5 million in fraudulent loans.
As part of this scheme, Mackey, who is a licensed title agent and proprietor of Real Estate One Land Services Inc., Pittsburgh, fraudulently closed the Genworth loans by failing to pay off the seniors’ existing liens. The designated closing agent for 1st Continental Mortgage allegedly concealed the false loan closings from financial institutions by preparing written settlement documents that claimed the existing mortgages were paid off by the borrowers, when this was not the case.
When Genworth sent more than $2.5 million in loan proceeds to the title agent, Mackey decided to wire nearly $1 million to the checking account of the three loan officers to use for their own needs. If convicted, the defendants face a maximum term of imprisonment of 30 years and a fine of up to $1 million.
“These defendants preyed on senior citizens on fixed and modest incomes. While legitimate loan modifications and reverse mortgages are useful tools to help those who need it, we will remain vigilant to make sure these tools are not misused by those who seek to line their own pockets,” said Wifredo Ferrer, U.S. attorney for the Southern District of Florida.
