Keeping Fraud at Bay in the Reverse Mortgage Sector
Call it lying, misrepresentation or bending the truth, but fraud by any other name remains an anathema upon the mortgage industry, costing not only reputations but cold hard cash.
Indeed, the industry’s myriad troubles the last two years may be traced to some buyer and business behavior that fell awfully close to - if not squarely within - the purest definitions of fraud.
Whether it was a lazy zero in the applicant’s income calculations, an inflated appraisal beyond what a property could fetch or terms that exceeded any hope of being met, the purpose was the same - to twist the system for personal gain; in other words, to defraud it.
A chastened mortgage community now knows better, as evidenced by new government regulation and tougher scrutiny of transactions. The effects of this cure will be felt in areas not much affected by the earlier disease.
In reverse mortgages, for example, where government oversight and control remained strong even during the “Roaring Aughts” of this decade, increased regulatory and compliance scrutiny will be apparent.
Post from: Reverse Mortgage Loan Blog
