Florida Scam Artists (and a friend in Pittsburgh) Defraud Seniors in Reverse Mortgage Game

Here’s how I guage how old I am these days: whenever I hear about a new scam — something Internetty and Nigerian, maybe, or something over-the-phone-ish and expensive — I think, “How likely is it that I would fall for that had I not just read this warning.

In the case of a reverse mortgage scam making its way through the Florida courts, it’s likely that I’m a 77-year-old fixed-budget retiree.

According to a story running in the Miami Herald, three employees from a Florida-based mortgage company (1st Continental Mortgage, fwiw — and that’s the first trap I would fall into: “Oh, well, if they’re the first…”) got illegally cosy with a Pittsburgh title agent to defraud senior citizens through shoddy reverse mortgages. Up to the point they got caught, the four primary movers and shakers of the scam netted around $1 million.

Reverse mortgages, for those just joining us, are a type of home equity loan available to seniors aged 62 or older. The reverse mortgage releases the owner’s home equity (ah, to be so lucky as to be in a home with any equity at all; my house currently is part of a buy-one-get-one-free-with-a-Slurpee deal at the nearby 7-11) either as a lump sum or over multiple payments. The loan isn’t due until the homeowner dies, the house is sold, or the owner leaves. (There’s a will-reading I’d probably choose to skip.)

In this case, Louis Gendason, John Incadela, Marcos Echevarria — all of 1st Continental — and Kimberly Mackey, the Pittsburgh title agent I mentioned earlier, obtained $2.5 million in reverse mortgage loans from Genworth Financial between 2009 and 2010. (Clearly, behind every three not-so-great men is a woman named Kimberly with bad moral judgment.)

U.S. Attorney Wifredo Ferrer is on the Side of Right and has brought charges against the four defendants. Each faces a maximum prison sentence of 30 years. Wifredo said in a statement, “There are multiple levels of fraud in this one case. Some of these [people] are having to fight off foreclosure.”