Marcos Echevarria, Louis Gendason, John Incandela and Kimberly Mackey, three South Florida mortgage loan officers and a Pittsburgh, Pennsylvania, title agent have been permanently disbarred following their criminal convictions on charges they defrauded elderly borrowers, mortgage lenders and the Federal Housing Administration (FHA).
As previously reported by Mortgage Fraud Blog, the defendants pled guilty to charges of conspiracy to commit wire fraud for their part in a $2.5 million nation-wide reverse mortgage scam. All four individuals are currently serving prison terms.
HUD’s debarment action effectively bans these individuals from conducting business with the federal government in the future. The Court has also ordered them to make restitution.
Echevarria, Gendason and Incandela worked for 1st Continental Mortgage, which maintains offices in Fort Lauderdale and Boca Raton, Florida. According to the government’s complaint, the three used their positions to identify financially vulnerable elderly borrowers and pressured them to refinance their existing mortgages into an FHA-insured reverse mortgage or Home Equity Conversion Mortgage (HECM). A reverse mortgage allows borrowers, who are at least 62 years of age, to convert the equity in their homes into a monthly stream of income, or a line of credit.
The complaint also notes that Kimberly Mackey, a licensed title agent and proprietor of Real Estate One Land Services, Inc., Pittsburgh, Pennsylvania, fraudulently closed the loans by failing to pay off the borrowers’ existing mortgages. It further notes that Mackey attempted to conceal the fraudulent loan closings by preparing false HUD-1 settlement documents that showed that the existing mortgages had, in fact, been paid off.
The scheme also involved changing real estate appraisal reports to fraudulently represent equity in the properties. In some cases the scheme also involved negotiating fake short sales defrauding the lenders holding the borrowers’ first mortgages.
The elderly victims lived in seven different states between May 2009 and November 2010.
This case was investigated by agents from the HUD-Office of Inspector General; the Internal Revenue Service-Criminal Investigation; the U.S. Postal Inspection Service; the FBI Miami Field Office; and the state of Florida’s Office of Financial Regulation. The case was prosecuted by the Justice Department’s Civil Division’s Office of Consumer Protection Litigation and the U.S. Attorney’s Office for the Southern District of Florida.
The U.S. Department of Housing and Urban Development (HUD) announced the indefinite debarment.
“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.”