Wednesday, April 28, 2010

FYI: FinCen Issues Advisory on Reverse Mortgage/HECM Fraud

The Financial Crimes Enforcement Network released the attached advisory guidance to assist financial institutions in guarding against fraud schemes against senior citizens who obtain reverse mortgage loans, especially FHA Home Equity Conversion Mortgage loans.
The advisory highlights new trends and schemes that law enforcement and the Department of Housing and Urban Development officials have identified, including use of unsuspecting seniors in property flipping and other fraud schemes. FinCEN also is asking financial institutions to use certain key words within the Suspicious Activity Report narrative section to assist law enforcement in identifying and prosecuting these crimes.
Some of the schemes noted by FinCEN include:  (1) theft of a senior’s loan proceeds through illegal cross selling of financial products;  (2) theft of the reverse mortgage proceeds by people the seniors trusts, such as family members, care takers and loan officers; and  (3) use of a power of attorney to obtain a loan without the senior’s full knowledge.
Let me know if you have any questions.  Thanks.


Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874


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