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Beware of Targeted Reverse Mortgage Schemes

Fraudsters can take advantage of older adults by pressuring or helping them obtain funding for home repairs by applying for a reverse mortgage and then stealing the funds from the reverse mortgage.  In this fraud bulletin, HUD OIG shares a recent case example where the fraudster was sentenced to more than 17 years in prison and provides tips on how senior homeowners can avoid reverse mortgage scams by purported contractors.

Carrington Mortgage Misapplied FHA's Foreclosure Requirements

We performed an audit of Carrington Mortgage’s compliance with Federal Housing Administration (FHA) requirements for foreclosures that started in 2022. Pursuant to the Coronavirus Aid, Relief and Economic Security Act (CARES Act), as extended by the Secretary, from March 18, 2020, through July 31, 2021, there was a pause on new and ongoing foreclosures for FHA single‐family mortgages for homes that remained occupied. We selected Carrington because it was among the first servicers to resume initiating foreclosures after the moratorium ended with a foreclosure rate above 1 percent.