Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
FinCEN warns of home equity conversion fraud schemes
WASHINGTON (4/28/10)--The Financial Crimes Enforcement Network (FinCEN) has warned of increased incidences of the Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) program being used to perpetuate financial crimes against senior citizens. Home Equity Conversion Mortgages (HECMs) are federally insured reverse mortgages backed by the U.S. Department of Housing and Urban Development. Specifically, FinCEN has warned financial institutions to be aware of new fraud trends, including “the theft of a senior’s HECM loan proceeds through cross selling of financial products” that violate the rules of the Department of Housing and Urban Development or the outright theft of reverse mortgage proceeds by family members, caretakers, or loan officers. FinCEN has also noted cases where a family member or other individual with power of attorney over the senior’s finances used that power to “apply for and close HECM loans without the full knowledge or participation of the victim.” “The most troubling aspect of HECM fraud is that it takes advantage of senior citizens who have worked hard over their entire lives to own their homes,” FinCEN Director James Freis, Jr. said, adding that FinCEN is “working closely” with HUD and the Secret Service to “proactively identify hot-spots of suspected HECM and other mortgage fraud activity and directly provide to law enforcement a more defined battleground to direct their resources.” FinCEN has also requested that financial institutions “use certain key words” in their Suspicious Activity Reports (SAR) to “assist law enforcement in identifying and prosecuting these crimes.” For the full FinCEN release, use the resource link.
Other Resources

RSS print
News Now LiveWire
NCUA re-schedules start of tomorrow's closed meeting to 9 a.m. ET. Open meeting still at 10 a.m. ET.
11 hours ago
.@lisamurkowski @SenatorEnzi @SenJohnBarrasso are latest to weigh in on NCUA risk-based capital proposal. See #NewsNow tomorrow for more
12 hours ago
Now up on News Now: Fed stays course on taper, interest rates http://t.co/6DntsW58vA
14 hours ago
Positive performance indicators and the potential for rising interest rates in @TheNCUA 's latest economic update. http://t.co/yptPbIGvnU
17 hours ago
The @CFPB has launched a nationwide effort to provide financial education. http://t.co/sF3FXHpv3k
17 hours ago