Reverse mortgage fraud ringleader pleads guilty

Hi and welcome back to Mortgage Nuggets. Today’s newsletter is 590 words, a 2.5-minute read. Let’s dive in…

1. Reverse mortgage fraud ringleader pleads guilty

Mark Steven Diamond, a former loan originator in Chicago, pleaded guilty to a wire fraud charge involving a reverse mortgage scheme that defrauded elderly homeowners of $929,000 and caused total losses of $6 million.

Diamond, 67, who was previously barred from originating loans, collaborated with brokers to deceive over a dozen elderly residents, exploiting their lack of financial understanding to push forward fraudulent transactions. He faces up to 30 years in prison, with prosecutors recommending a 24-year sentence.

Diamond and his accomplice, Cynthia Wallace, manipulated homeowners into unnecessary home repairs funded by reverse mortgages, falsifying documents and representations. His sentencing is scheduled for September, and four co-defendants also await sentencing. LINK

2. Loandepot hit with TCPA telemarketing suit

Robert Hubble from Lake George, Michigan, is suing Loandepot for at least 48 unwanted telemarketing calls he received between March 27 and April 24, soliciting mortgage services.

He claims these calls were a nuisance and violated the Telephone Consumer Protection Act, which prohibits such calls without consent. Hubble is seeking to have his lawsuit certified as a class action, potentially entitling him to between $24,000 and $72,000 in damages, depending on whether Loandepot's actions are intentional.

Other companies, like Rocket Mortgage and Cardinal Financial, have faced similar lawsuits with substantial settlements.

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3. More Nuggets

⏸️ Fannie and Freddie hit pause on Replacement-Value requirements for home insurance. (Insurance Journal)

📈 Rocket returns to profitability in Q1, claims market share gains. (Detroit News)

🏢 Surge in property assessment appeals set to shake U.S. city finances. (Observer)

🫨 Consumer sentiment drops as inflation fears surge. (CNBC Video)

📝 High mortgage rates, payments make for slow spring market. (NMP)

4. Charted: Share of home purchases made with cash

According to new data from Redfin, over one in three U.S. homes are now purchased with cash.

5. Valverde appointed acting president of Ginnie Mae

Sam Valverde, formerly the principal executive vice president of Ginnie Mae, was named as its acting president as of May 6, according to an announcement issued last week.

Valverde succeeds Alanna McCargo, who began serving as Ginnie Mae president in January 2022 until announcing her resignation in April. That resignation went into effect as of May 3, and McCargo has since been announced as the new CEO of the Federal Home Loan Bank (FHLBank) of San Francisco.

Valverde first joined Ginnie Mae in 2022, working in roles as an EVP and chief operating officer before being appointed principal EVP in 2023.

You’re all caught up. See you on Wednesday!

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