In light of the increased popularity of reverse mortgages, credit unions should be especially vigilant in trying to stop fraudulent practices and help the Financial Crimes Enforcement Network's efforts.
That's the advice in the NCUA's Regulatory Alert, which reminds credit unions that home equity conversion mortgages are only available through Federal Housing Administration approved lenders. These originators, sponsors and servers have access to HECM loan files.
NCUA Chairman Debbie Matz wrote that persons perpetrating fraud sometimes seek services of credit unions.
She suggested that when credit unions file suspicious activity reports they should include "HECM" in the narrative portion and include extensive information about the company suspected of engaging in fraudulent activity.