The three Florida men charged with reverse-mortgage fraud on Wednesday were Palm Beach County residents who worked for 1st Continental Mortgage, with offices in Boca Raton and Fort Lauderdale.
A reverse mortgage allows a bank to purchase the homes of seniors 62 and above, then provide monthly mortgage payments to the residents. The theory is that the occupants will get steady income until they die or move out, at which point the house belongs to the bank. But Louis Gendason, John Incadela, and Marcos Echevarria would appraise the homes for more than they were worth, and, according to the Herald,
After receiving the inflated loan proceeds from Genworth, closing agent Mackey would divert a substantial portion of the money into a personal account managed by Incandela, rather than paying off the existing mortgages.
A title agent in Pittsburgh was also charged this week.
"These defendants preyed on senior citizens on fixed and modest incomes," said U.S. Attorney Wilfredo Ferrer. "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."
But those defendants aren't the only 1st Continental associates to face accusations of wrongdoing.
A quick Google search reveals a complaints forum in which someone claiming to be a customer calls out Raymond L. Moatz, an official with the company. "I have been waiting since April 2010 to get paid miserable 3700.00 dollars for a reverse Mortgage deal I closed," says the complainant.
The defendants heard charges on Wednesday, and prosecution is moving forward.
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