A settlement has been reached with a reverse mortgage lender that allowed someone to sign loan documents even though he didn’t have the authority to do so.
MetLife Home Loans LLC previously underwrote and closed a home-equity conversion mortgage. The son of the borrower used a power of attorney to sign the loan.
But the Irving, Texas-based
company, which shut down in 2012, failed to ensure that the signatories to the loan had the legal authority to execute it.
That is according to the
Department of Housing and Urban Development, Office of Inspector General.
The OIG said that the power of attorney that the borrower’s son used to execute the loan required his sister’s signature as well as his own.
As a result, MetLife made a false claim to the Federal Housing Administration about the eligibility of the HECM in violation of the Program Fraud Civil Remedies Act of 1986, 38 U.S.C. (United States Code) 3801-3812.
The potential loss to FHA on the transaction is estimated at $95,769.
MetLife has agreed to a $4,000 settlement with HUD.
As part of the settlement, MetLife will indemnify and hold HUD harmless for any and all losses on the HECM.
In addition, the borrower’s son has agreed to pay HUD $1,500.
