WSJ: Reverse Mortgage Frauds Latest Twist

wall_street_journal_logo A new article from the Wall Street Journal details how a retired auto mechanic used the money he received from a reverse mortgage to pay off his existing $70,000 mortgage and "piddled away" the remaining $24,000 on things like restaurant meals for his four girlfriends, he says.

Unfortunately, the owner of the Orlando, Fla., title company that handled his loan admitted to stealing more than $1 million from several reverse-mortgage holders, including the retired auto mechanic.

[REVERSEchart]Bank of America Home Loans says the title agent never sent it the money required to pay off Mr. Ford’s previous mortgage. As a result, Mr. Ford says, the bank recently threatened to foreclose on his seven-acre ranch in Archer, Fla.

"That will put me on the streets with my cars and horses and tools," says the 68-year-old Mr. Ford. Bank of America, which says there is no immediate danger of foreclosure, adds that it is working with Mr. Ford "to find a home-retention solution."

While the article does say that such fraud is rare "is occurring in every region of the United States and reverse-mortgage schemes have the potential to increase substantially," according to a report issued by the Federal Bureau of Investigation and the Office of Inspector General.

Mortgage Fraud: A Classic Crime’s Latest Twists

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