Mortgage banker slapped with two HUD subpoenas over former reverse arm

by Anna Sobrevinas17 Mar 2017
Mortgage banking firm Walter Investment Management revealed Tuesday it has received two subpoenas from HUD regarding its former reverse mortgage origination firm, Reverse Mortgage Solutions, according to Reverse Mortgage Daily.

The first subpoena from the HUD’s Office of the Inspector General came to the Florida-based company in July last year. It requested documents, underwriting and appraisal practices of RMS as far as Jan. 1, 2005. The second subpoena came in January, requesting related documents on “certain specified loans.”

False Claims Act-related penalties are involved in the investigation, according to Reverse Mortgage Daily.
Walter stopped origination operations in January but is still servicing loans and existing Home Equity Conversion Mortgages.

RMS paid a penalty of $325,000 last December after a CFPB investigation its practices and said it had “understated the possibility of tax and insurance defaults” “created a false sense of urgency” by implying that reverse mortgages were only available for a limited time, and stated that HECMs could “eliminate debt.” 

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