Reverse Mortgage Solutions Fraud

Reverse Mortgage Solutions Fraud Victims Want Protections In Ditech Bankruptcy

Reverse Mortgage Solutions Fraud
Chicago area mortgage broker scammed 125 Chicago area seniors in a reverse mortgage fraud scheme involving RMS.

Victims of a Reverse Mortgage Solutions fraud scheme want their money and they want their voices heard. They are concerned that the bankruptcy of RMS’s parent company Ditech will nullify their settlement agreement.

The case involved 125 African American families and about six different HECM lenders. The result cost these homeowners and the lenders $7 million and left a number of unwitting borrowers facing foreclosure.

Three of those homeowners now have claims regarding their reverse mortgages with Reverse Mortgage Solutions. RMS is a Ditech subsidiary that either acted as the lender or servicer on the loans in the scheme.

Two years ago, a Chicago loan officer was charged with defrauding elderly homeowners in a reverse mortgage scam by taking out reverse mortgages without their knowledge or misrepresenting the terms of the loan in order to convince them to get one.

But now, Ditech is in the midst of bankruptcy that might impact these fraud victims, said J. Samuel Tenenbaum, director of Northwestern’s Complex Civil Litigation and Investor Protection Center, who is representing some of the victims.

On Friday, Tenenbaum filed a request with the bankruptcy trustee in the case. He requested the court to create a committee of consumer creditors to represent Ditech borrowers.

Tenenbaum also stated the request was based on servicing abuses Ditech and RMS consumers have suffered.

He also stated he has concerns that consumers may be without recourse to address their interests in the bankruptcy.

Since filing, Tenenbaum has received support from other attorneys who represent Ditech creditors.

Tenenbaum told Housingwire:

We just want to make sure that the bankruptcy does not do anything that negatively impacts consumer rights.

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