The Department of Housing and Urban Development indefinitely debarred three Florida loan officers and a Pittsburgh title agent following their criminal convictions for defrauding elderly borrowers, mortgage lenders and the Federal Housing Administration.
Marcos Echevarria, Louis Gendason, John Incandela and Kimberly Mackey pled guilty to charges of conspiracy to commit wire fraud for participating in a $2.5 million national reverse mortgage scam. All four individuals are currently in prison.
The debarment prevents these scammers from conducting any type of future business with the federal government. Additionally, the scammers have to pay restitution to those affected by their fraudulent activity.
“HUD will not tolerate those who abuse the mortgage system and target elderly borrowers for their personal gain,” said HUD Secretary Shaun Donovan. “Reverse mortgages can help senior citizens on fixed incomes plan for the future, but it is shameful to bilk the elderly out of their life savings.”
The three loan officers—Echevarria, Gendason and Incandela—worked for 1st Continental Mortgage where they solicited financially vulnerable individuals who were 62 or older and pressured them to refinance their existing mortgages into an FHA-insured reverse mortgage or Home Equity Conversion Mortgage.
The May 2009 to November 2010 scheme that occurred in seven states also involved changing real estate appraisal reports to fraudulently represent equity in the properties on order to persuade HUD to fund and insure the reverse mortgage loans. In some cases, the fake short sales were also negotiated to defraud the lenders holding the borrowers' first mortgages.
As part of this scheme, Mackey, a licensed title agent and proprietor of Real Estate One Land Services Inc., fraudulently closed the loans by failing to pay off the seniors’ existing liens. She also attempted to conceal the fraudulent loan closing by preparing false HUD-1 settlement documents that showed the current mortgages had been paid off.
