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HUD Complaint, HUD Reverse Mortgage Handbook 7610.01, Section 4-19
U.S. Department of Housing and Urban Development (HUD)
Atlanta HUD Homeownership Center
ATTN: Director, Program Support Division
40 Marietta Street, 8th Floor
Atlanta, GA 30303-2806
HUD Complaint, HUD Reverse Mortgage Handbook 7610.01, Section 4-19
U.S. Department of Housing and Urban Development (HUD)
Atlanta HUD Homeownership Center
ATTN: Director, Program Support Division
40 Marietta Street, 8th Floor
Atlanta, GA 30303-2806
HUD Complaint, HUD Reverse Mortgage Handbook 7610.01, Section 4-19
U.S. Department of Housing and Urban Development (HUD)
Atlanta HUD Homeownership Center
ATTN: Director, Program Support Division
40 Marietta Street, 8th Floor
Atlanta, GA 30303-2806
U.S. Department of Housing and Urban Development (HUD)
Atlanta HUD Homeownership Center ATTN: Director, Program Support Division 40 Marietta Street, 8th Floor Atlanta, GA 30303-2806 Reverse Mortgage Solutions, Inc. (RMA) 2727 Spring Creek Drive Spring, TX 77373 Complaint: HUD Complaint, HUD Reverse Mortgage Handbook 7610.01, Section 4-19 Dispute: Notice of Default and Intent to Foreclose, acct./loan no. 68011002615899 Dear HUD and RMA: Recently we found a material alteration to our HECM reverse mortgage made by interlineation after execution. (Exhibits 32 and 33). Please take notice that we DO NOT ratify the change. The interlineation is a hand-written alteration, not initialed and not dated, and vitiates the mortgage. The interlineation is an attempt to add a new party to the reverse mortgage, Penelope M. Gillespie individually. The interlineation recently came to our attention when an attorney we consulted found the altered mortgage on the Marion County Clerks website. This mortgagee document differs from the mortgage documents we signed J une 5, 2008 with no interlineation. On J anuary 15, 2009 Bank of America provided us with copies of the mortgage documents that have no interlineation. (Exhibits 9 and 10). Therefore I conclude that the interlineation is evidence of fraud by the lender and/or lender-affiliated parties. Under Florida law a material alteration voids the instrument and destroys the identity of the contract rendering it unenforceable. Bland v. Fidelity Trust Co., 71 Fla. 499, 71 So. 630 (1916). Since a HECM reverse mortgage is a non-recourse loan, the void contract is unenforceable, and the lender has no further means to collect the debt beyond the terms of the original documents. In addition, a review of the file in this matter shows fraud and gross misconduct by the lender and lender-affiliated parties, including the HECM-approved reverse mortgage counselor. This letter is a complaint to the U.S. Department of Housing and Urban Development (HUD) as provided for in the HUD Reverse Mortgage Handbook 7610.01, Section 4-19 Concerns or Complaints Regarding a HECM Lender or Reverse Mortgage Counselor. The records of RMS are not accurate. There are three borrowers, including Neil Gillespie, who is currently living in the home. Therefore RMSs Notice of Default and Intent to Foreclose dated J une 8, 2012 is improper. (Exhibit A). There are no grounds for acceleration of the debt. RMS RMS HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 2 An Assignment of Mortgage provided by RMS in response to our RESPA request shows Neil Gillespie as one of three original borrowers. (Exhibit 1). This has been our position since the beginning when we all signed the loan documents J une 5, 2008. A review of this reverse mortgage shows problems with the documents and business practices used to solicit and make this loan. Those issues include fraud, breach of fiduciary duty, predatory lending, and negligence toward a borrower who lacked legal competency, to steer us into a HECM reverse mortgage that charged higher fees and stripped us of home equity. Borrower Penelope Gillespie suffered from Alzheimers dementia at the time of the HECM reverse mortgage and counseling session. Ms. Gillespie lacked capacity to make a contract, and died of dementia September 16, 2009. Neil Gillespie was Ms. Gillespies primary caregiver and had Durable Power of Attorney (POA), but the HUD counselor, lenders, and related parties failed to require the POA. The record shows that this loan failed to comply with requirements related to competency as set forth in the HUD Reverse Mortgage Handbooks 4235.1 and 7601.1. At the time we believed that Ms. Gillespies lack of capacity was mitigated by the fact that Neil Gillespie and Mark Gillespie were also borrowers on the loan. However if it is determined that Neil Gillespie and Mark Gillespie are not borrowers on the loan, then Ms. Gillespies lack of capacity is very significant, and the reverse mortgage is void or voidable and must be canceled. Neil Gillespie a disabled adult. This is a request for disability accommodation. Neil Gillespie is disabled as defined by the following: a. The Rehabilitation Act of 1973, 29 U.S.C. 701 et. seq. b. Section 825.101(4), Florida Statutes. c. The Americans with Disabilities Act (ADA), 42 U.S.C. 12101 et seq. d. ADA Amendments Act of 2008 (ADAAA). 1. Fraudulent Assignment From Liberty Reverse Mortgage to Bank of America Liberty Reverse Mortgage unlawfully assigned this reverse mortgage to Bank of America before the loan closed. A Corporation Assignment of Deed of Trust/Mortgage made J une 3, 2008 by Liberty Reverse Mortgage to Bank of America grants, sells, assigns, and transfers all beneficial interest under that Certain Deed of Trust/Mortgage dated May 29, 2008 executed by Penelope M. Gillespie, Neil J . Gillespie and Mark Gillespie, as Co-Trustees of The Gillespie Family Living Trust Agreement dated February 10, 1997, Borrower, to Liberty Reverse Mortgage, Inc.. (Exhibit 2). This assignment is fraudulent on its face because no deed was executed on May 29, 2008 by any of the parties. The deed was executed on J une 5, 2008. The assignment made J une 3, 2008 by J essica Yee, Asst. Secretary of Liberty Reverse Mortgage, shows evidence of fraud because the deed was not executed by the parties until J une 5, 2008. Yet Ms. Yee certified under PENALTY OF PERJ URY before notary Bernadette Perez on J une 3, 2008 that the deed was executed May 29, 2008 when the deed was NOT executed. (Exhibit 2). HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 3 The fraudulent assignment of J une 3, 2008 did not comply with RESPA, the Real Estate Settlement Procedures Act (12 U.S.C. 2605), including notice of the assignment. (Exhibit 3). Bank of America notified us by letter that effective J uly 1, 2011 the servicing of reverse mortgage loans by our subsidiary-BAC Home Loans Servicing, LP, will transfer to our parent company-Bank of America, N.A.. This is a request for a copy of the J uly 1, 2011 assignment. Also, J essica Yee made a Direct Endorsement Allonge - without recourse - May 29, 2008 that predates execution of the Note by a week. The Note was signed J une 5, 2008. (Exhibit 4). The original settlement date of May 29, 2008 was canceled because our attorney Robert Stermer became ill and could not attend. The settlement was rescheduled, and closed J une 5, 2008. 2. HECM Loan Originator Liz Baize of Park Avenue Bank - Application Not Right Neil Gillespie had an existing and ongoing banking relationship with Park Avenue Bank (PAB), consisting of a monthly automatic deposit of his disability check and a small savings account. That existing relationship was the basis for going to PAB for a HECM reverse mortgage. A recent review shows that the HECM residential loan application was not accurate. Fannie Mae loan form (no. 1009, 05/2004) signed by Penelope Gillespie and Liz Baize of Park Avenue Bank on J une 5, 2008 explicitly states in the opening paragraph that Co-borrower information must be provided when a person other than the Borroweris a co-owner of the real property that will be used as a basis for loan qualification. (Exhibit 5). (see page four (4), paragraph 1, Instructions for completing the residential loan application for reverse mortgages). Contrary to law, the application does not show that the property title is held in an Inter Vivos (Living) Trust. The application incorrectly shows the property held in the sole name of Penelope M. Gillespie. This application was completed by Liz Baize of Park Avenue Bank, the loan originator, and signed J une 5, 2008 by Ms. Baize. This incorrect information is repeated in the attached Addendum. As a factual matter, the quit-claim deed is titled to Penelope M. Gillespie, Neil J . Gillespie and Mark Gillespie, as Co-Trustees of the Gillespie Family Living Trust. Liz Baize, Park Avenue Bank, Financial Title Company, and Liberty Reverse Mortgage all knew that the property was not titled in the name of Penelope M. Gillespie. The Borrowers Escrow Instructions, dated May 28, 2008 by Financial Title Company, shows: (Exhibit 6) the property described in Preliminary report issued by Mercury Transaction Services, Report No. 42613725, dated April 16, 2008, showing title vested in Penelope M. Gillespie and Neil J . Gillespie and Mark Gillespie, as Co-Trustees of the Gillespie Family Living Trust Agreement dated February 10, 1997, describing the property known as: 8092 SW 115th Loop, Ocala, FL 34481. Nonetheless, Liz Baize and Park Avenue Bank certified the false information as correct. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 4 Furthermore, on page three (3) of the application, part VII, Acknowledgment and Agreement, item 10, representations were made as to the value of the property by Liz Baize, Park Avenue Bank, the appraisal company, Liberty Reverse Mortgage, and the HUD HECM consumer reverse mortgage counselor Susan Gray/CCCS/MMI. Representations of property value were made by these parties in various financial schedules and loan projections, described in detail below. An earlier HECM residential loan application dated April 25, 2008 signed by Penelope Gillespie and Liz Baize/Park Avenue Bank is essentially the same as J une 5th application, and contains the same false information about the title to the property. (Exhibit 7). 3. Original Settlement May 29, 2008 Canceled Due To Attorney Illness The original settlement date of May 29, 2008 was canceled because our attorney Robert Stermer became ill and could not attend. The settlement was rescheduled, and closed J une 5, 2008. Liz Baize of Park Avenue Bank, the loan originator, provided Neil Gillespie with copies of the unsigned documents from the canceled closing of May 29, 2008, along with a handwritten note on bank letterhead that read: (Exhibit 8) Neil, Received permission to give you this copy for review in the event you want to pick up again next Thurs. If you decide to confirm next Thurs at 2:00 a 48 hour notice would be good. Thank you. Liz. Liz Baize hand delivered the documents to Neil Gillespie at our home. Ms. Baize provided 149 pages of HECM loan documents, including an Estimated Borrowers Closing Statement that shows three (3) borrowers: Penelope M. Gillespie, Neil J . Gillespie, and Mark Gillespie. (Printed by Fatima Pacheco on 05/28/08 at 1:55:48PM). Liz Baize also provided Borrowers Escrow Instructions that shows the property title vested in the names of Penelope M. Gillespie, Neil J . Gillespie, and Mark Gillespie, as Co-Trustees of the Gillespie Family Living Trust Agreement dated February 10, 1997. (Exhibits 6 and 8). Ms. Baize provided copies of other documents that also showed three (3) borrowers, such as the HECM Reverse Mortgage (first and second) and the HECM Note (first and second). Also included was a Notice of Assignment, Sale or Transfer of Servicing Rights: (Exhibit 3) You are hereby notified as a requirement of Section 6 of the Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. 2605) that the servicing of your mortgage loan, that is, the right to collect payments from you, is being assigned, sold or transferred from Liberty Reverse Mortgage, Inc. to Bank of America, N.A effective June 03, 2008 Liberty Reverse Mortgage went ahead with the assignment J une 3, 2008, even though the loan did not close May 29, 2008. The loan closed J une 5, 2008, two days later. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 5 4. Original HECM Mortgage and Note Shows Three Borrowers The original HECM Mortgage and Note shows three borrowers. Neil Gillespie provided copies of these documents to RMA in a RESPA request dated May 14, 2012. RMA returned the copies. The HECM documents in Exhibits 9 through 12 were provided by Tom DeBeauchamp of Bank of America to Penelope Gillespie J anuary 15, 2009 by FedEx. (Exhibit 34). No cover letter was provided by Bank of America, just 126 pages of copies. This was in response to our request to Bank of America for copies of signed documents from the J une 5, 2008 settlement. a. The HECM reverse mortgage documents (both first and second mortgages) show three (3) mortgagors as borrowers: (Exhibits 9 and 10). THIS MORTGAGE ("Security Instrument") is given on J une 05, 2008. The mortgagor is Penelope M. Gillespie, Neil J . Gillespie and Mark Gillespie, as Co-Trustees of The Gillespie Family Living Trust Agreement dated February 10, 1997, whose address is 8092 SW 115th Loop, Ocala, FL 34481 ("Borrower"). b. The HECM adjustable rate Note documents (both first and second Notes) defines the term Borrower in paragraph 1, definitions: (Exhibits 11 and 12) 1. DEFINITIONS "Borrower" means each person signing at the end of this Note. The note show three (3) persons signed, each as are borrowers: Penelope M. Gillespie, Neil J . Gillespie and Mark Gillespie, as co-trustees of The Gillespie Family Living Trust Agreement. c. Co-trustees are persons and therefore borrowers as defined by the Note. This definition is consistent with HUDs model forms in Appendixes 2 and 3 to HUD handbook 4235.1. Because co-trustees are persons and therefore borrowers, the trust provision in the mortgage is ambiguous and should be construed in favor of the borrower(s). Paragraph 9(e) of the mortgage, last sentence, states: A trust shall not be considered an occupant or be considered as having a principal residence for purposes of this Paragraph 9. Taken on its face as true, the trust is not an occupant, nor does it have the property as its principal residence. A trust is a legal fiction and does not reside anywhere. Co-trustees are people, and "Borrower" means each person signing at the end of this Note. Neil Gillespie is a person, a co-trustee, and a borrower residing in the property. 5. Material Alteration to the Original HECM Mortgage A material alteration was made by handwritten interlineation, with no initials and no date, to the original HECM mortgage sometime after the parties signed the mortgage on J une 5, 2008. Please take notice that we DO NOT ratify the change. The altered mortgage was filed J une 25, 2008 with the Marion County Clerk of Court. This altered mortgage came to the attention of Neil Gillespie J uly 12, 2012 by reading the official record on the Marion County Clerks website. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 6 A copy of the altered HECM mortgage accompanies this complaint as Exhibit 32. A copy of the altered HECM second mortgage accompanies this complaint as Exhibit 33. The following material alterations were made by handwritten interlineation to the HECM mortgage after the fact, and not initialed or dated by any party to acknowledge the changes. a. A material alteration was made to the HECM mortgage by way of a handwritten interlineation above the name of Penelope M. Gillespie in the second sentence that reads individually and as trustee. This material alteration was not initialed or dated by any party. b. A material alteration was made to the HECM second mortgage by way of a handwritten interlineation above the name of Penelope M. Gillespie in the second sentence that reads individually and as. This material alteration was not initialed or dated by any party. c. Someone also removed on the HECM mortgage the printed words prepared by located under the Liberty Reverse Mortgage address block on the first page, and added the handwritten words Prepared By: over the same Liberty Reverse Mortgage address block. This alteration was not initialed or dated by any party. d. Someone also removed on the HECM second mortgage the printed words prepared by located under the Liberty Reverse Mortgage address block on the first page, and added the handwritten words Prepared By: over the same Liberty Reverse Mortgage address block. This alteration was not initialed or dated by any party. e. On the HECM mortgage someone added to the signature block the property address in handwritten script, and asterisks by the names Penelope M. Gillespie and Neil J . Gillespie. The name of Mark Gillespie was crossed out in this signature block. In the signature block for Mark Gillespie, someone added the property address in handwritten script, and crossed out the names of Penelope M. Gillespie and Neil J . Gillespie. These alteration were not initialed or dated by any party. 6. Property Deed Shows Vesting to Three Owners - First American Title Insurance Company A quit-claim deed to the property at 8092 SW 115th Loop shows vesting to Penelope M. Gillespie, Neil J . Gillespie and Mark Gillespie, as Co-Trustees of The Gillespie Family Living Trust Agreement dated February 10, 1997. A copy of the deed was provided to us April 4, 2011 by First American Title Insurance Company, along with a copy of the Florida Department of Revenue, Return for Transfers of Interest in Real Property. (Exhibit 13). 7. HUD - HECM Consumer Reverse Mortgage Counseling Penelope Gillespie and Neil Gillespie attended telephonically April 22, 2008 HECM consumer reverse mortgage counseling with Susan Gray of Consumer Credit Counseling Services, Money Management International Incorporated (CCCS/MMI). MMI is located in Beaumont, Texas. Counseling is required by HUD for the purpose of providing to borrowers information about the implications of and alternatives to a reverse mortgage. Ms. Gray certified in accordance HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 7 with Section 255 of the National Housing Act and 24CFR 206.41, that she discussed in detail items 1 through 7 listed on the certificate, including number 3, The financial implications of entering into a Home Equity Conversion Mortgage. (Exhibit 14) The counseling provided by MMI did not meet requirements set forth in the HUD Reverse Mortgage Handbook. The financial information provided by MMI has since proved wildly inaccurate. The session was perfunctory and did not provide any actual counseling as required. HUD HECM Reverse Mortgage - Very Complex Financial Product A HUD HECM Reverse Mortgage is a very complex financial product. The consequences to the borrower, the family and the estate are significant and life changing. Those consequences can strip borrowers of home equity, threaten families with foreclosure, and destabilize communities. HUD has published at least two Reverse Mortgage Handbooks, HUD handbook 4235.1 REV-1 issued November 18, 1994, and HUD handbook 7610.1 REV-5 issued May 2010. At the time of the HUD counseling session and reverse mortgage, we did not know that a handbook existed. Parts of the handbooks are similar, but the Appendixes are not. HUD handbook 7610.1 has four (4) Appendices, and HUD handbook 4235.1 has twenty-three (23) Appendixes. Each handbook exceeds 180 pages. Below is a link to the HUD handbooks and other HUD publications. http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/ hsgh Appendix 4 to HUD handbook 7610.1 is the HECM Counseling Protocol, and as the name suggests, consists of one hundred one (101) pages of counseling protocol for HECM loans, and includes the following: (NOTE: HUD also has a separate, HECM Housing Counseling Protocol 7610.0 online http://portal.hud.gov/hudportal/documents/huddoc?id=7610-0_COMBINED.PDF) APPENDIX 4 - HECM Counseling Protocol Table of Contents I. Objectives of Reverse Mortgage Counseling 78 II. Reverse Mortgage Counselor Roles and Responsibilities 78 III. The Counseling Session 81 IV. Client Needs and Circumstances 92 V. Features of Reverse Mortgages 96 VI. Financial Alternatives and Supplements 109 VII. Reverse Mortgage Counseling Tools 113 Attachment A: HUD Counseling Policies 115 Attachment B: Resources for Counselors 130 Attachment C: Resources for Clients 152 Appendix 4 states in section II. Reverse Mortgage Counselor Roles and Responsibilities, that the responsibility of the counselor includes: (page 80) HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 8 Reviewing the Clients Level of Understanding The counselor must make specific efforts to review the clients level of understanding of reverse mortgages, including the following: 1. The basic mechanics, requirements and implications of a reverse mortgage; 2. The impact on the clients personal financial situation of the particular loan in which he or she is interested; and 3. The clients responsibilities and requirements for residency under the mortgage Review Tool Attachment B.10 provides a list of questions the counselor must ask to assess client comprehension. Counselors must ask questions about reverse mortgages in general and questions appropriate to the specific client situation. The client must be able to answer five of the ten questions in order to receive the counseling certificate during the first session. These questions will be interspersed throughout the session. The counselor will ask questions in the spirit of a review throughout the counseling session, rather than an exam at the end of the session, in order to avoid intimidating or insulting the client. The counselor may discontinue the session without issuing the certificate if it is apparent early in the counseling session that the client is not able to understand the material. Refer to Attachment B.10 for the appropriate course of action in this case. Attachment B.10, Reviewing the Clients Level of Understanding is attached to this complaint as Exhibit 42. This four (4) page attachment begins: The content of a reverse mortgage counseling session is comprehensive and complex. A truly informed decision to apply for a reverse mortgage requires both an understanding of the essential elements of the loan and the ability to apply that knowledge to the clients individual situation. Part of the counselors role is to review, during and at the end of every session, whether the client has been adequately informed and has a level of understanding indicating he or she grasps the fundamental facts of a reverse mortgage. Other requirements set forth in Attachment B.10 include: (Exhibit 41) During the session, counselors must ask ten questions to determine whether the client has understood the essential features of the reverse mortgage. These questions explore some of the most fundamental facts about reverse mortgages things that every adequately informed client must know. Clients must answer five questions correctly to receive the Counseling Certificate at the initial counseling session. For additional instructions on what counselors should do if the client cannot answer five questions correctly see the section titled Results of the Review.Whenever possible, avoid yes/no questions. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 9 If there are two or more borrowers, the counselor may request that each client alternate answering questions. In addition, if one client appears to be quieter and less involved during the session, the counselor may direct the questions entirely to that client, while asking the other client to remain silent. If the quiet client cannot respond, then the counselor may allow the other one to answer the question. The counselor must avoid allowing a dominant client to completely take over the question and answer exchange. If the client is accompanied by a legal representative (e.g., someone who has durable power of attorney), direct the questions to the client whenever possible, asking the agent to remain silent until the client has attempted to answer. If the client is unable to respond adequately, the certificate should be signed by the legal representative only and should include the notation that the client was unable to fully participate in counseling. Results of the Review Counselors must make detailed notes about difficulties the client has in answering questions, particularly when the answers are grossly inadequate, as this will help support any decision to withhold or delay issuing the certificate. Because these questions are meant to test the most basic reverse mortgage concepts, if the client cannot provide adequate answers for five questions, there may be concern about his or her ability to make an adequately informed reverse mortgage decision. If that is the case, the counselor must not issue the counseling certificate after the first counseling session, but must propose additional ways to help the client gain the necessary knowledge. These options must meet the clients specific needs. During any additional counseling sessions, the counselor will ask the review questions again. If the client again is not able to correctly answer five out of the ten questions, the counselor will ask the client if they would like additional time and invite them to come back at a later date after they have had more time to study the materials. A certificate cannot be issued until the client correctly answers 5 out of the 10 questions. Each handbook references the other, and both appear relevant to a reverse mortgage made today. In addition, the HUD handbooks not only make reference each other, but to many additional laws and regulations, including a number of civil rights laws. For example, HUD handbook 7610.1, Chapter 3, Section 3-1 F. Civil Rights, states: F. Civil Rights. All participating agencies must administer their housing counseling programs in accordance with and remain in compliance with corresponding Departmental regulations and guidance and the following nondiscrimination regulatory and legislative requirements: a. Title VI of the Civil Rights Act of 1964, b. Title VIII of the Civil Rights Act of 1968, c. Executive Order 11063, d. Section 504 of the Rehabilitation Act of 1973, HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 10 e. The Age Discrimination Act of 1975 f. Americans with Disabilities g. Title IX of the Education Amendments of 1972. These requirement are designed to prevent discrimination in the delivery of benefits and services because of race, color, religion (creed), sex, national origin, age, familial status or disability. Because of the complex nature of a HECM Reverse Mortgage, participating agencies must offer and be able to provide counseling, as opposed to just education. (HUD handbook 7610.1, 3-1 A). A. Counseling. Participating agencies must offer and be able to provide counseling, as opposed to just education, to current and potential homeowners or tenants to assist them in improving their housing conditions and in meeting the responsibilities of homeownership or tenancy. Participating agencies must provide counseling on one or more of the topics outlined in Paragraph 3-6. Counseling activities must be limited to the geographic area specified in the agencys approved housing counseling work plan. (HUD handbook 7610.1, 3-1 E). E. Geographic Scope. Regardless of the setting or format, counseling activities must be limited to the geographic area specified in the agencys approved housing counseling work plan. For example, agencies may only offer telephone counseling to clients in their approved geographic area. With HUDs approval, or at HUDs discretion, geographic scope can be expanded or reduced. In order for a client to be classified as counseled under HUDs Housing Counseling program, the client must receive all of the basic services outlined in 214.300 (6)(b) and Items A E below. (HUD handbook 7610.1, Chapter 3, Section 5). A housing counselor must perform and document these activities. (only Section 3-5 D is shown here). 3-5 D. Financial Analysis. Every housing counseling session requires an analysis of the clients unique financial situation. This includes but is not limited to: 1. A review of the client's income, expenses, spending habits, home values and use of credit. 2. A comparative analysis of the clients spending habits to determine if the clients habits are more suitable for renting than owning. 3. The establishment of a household budget that the client can afford. HUD states that all borrowers on the deed must have counseling. See page 34, HUD handbook 7610.1, Chapter 4, Section 4-1 E. E. Counseling Requirement for Home Equity Conversion Mortgage HECM) Borrowers. Section 255(d) of the National Housing Act and the implementing FHA regulations at 24 CFR 206.41 state that all prospective HECM borrowers must receive reverse mortgage counseling prior to obtaining a HECM. This counseling must be received from eligible HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 11 counselors working for participating agencies approved to provide this statutorily required counseling. To meet the statutory requirements for obtaining a HECM, the prospective borrower must receive one-on-one reverse mortgage counseling and be issued a HECM counseling certificate. Counselors are allowed to provide the required reverse mortgage counseling to a group of related family members if they are documented on the deed together. HUD states any person(s) listed on the deed must receive reverse mortgage counseling, including beneficiaries of a life estate trust. See page 42, HUD handbook 7610.1, Chapter 4, Section 4-14. 4-14 HECM Borrowers Persons Required to Receive Reverse Mortgage Housing Counseling. All eligible HECM borrower(s) meeting the requirements of Handbook 4235.1, including all eligible mortgagors on the property deed, must receive reverse mortgage counseling covering the topics outlined in this chapter. In the event that multiple eligible borrowers shown on the deed are not located in the same place, counseling may be provided to these parties by one counselor via teleconference call or the individuals may receive counseling separately from different counselors. However, HUD expects counseling agencies to avoid unnecessary separate counseling, and to make every practical effort to counsel the borrower(s) and any related parties simultaneously. A. Person(s) on the Deed. Any person(s) listed on the deed must receive reverse mortgage counseling. (NOTE: Mark Gillespie is on the deed and did not receive counseling) B. Beneficiaries of Life Estates. FHA will insure a HECM on property held in the name of a trust with beneficiaries according to the provisions described in the HECM Handbook 4235.1, Rev.1 and Mortgagee Letter (ML) 93-22. The HECM Handbook and ML 93-22 provide, in part, that all beneficiaries of the trust should be eligible HECM borrowers at the time of origination and until the mortgage is released. Current trust beneficiaries or individuals who are eligible HECM borrowers and are seeking a HECM loan must attend reverse mortgage counseling and sign the HECM counseling certificate. The following names are listed on the quit-claim deed, HECM Mortgage, and HECM Note: Penelope M. Gillespie, Neil J . Gillespie, and Mark Gillespie, as Co-Trustees of the Gillespie Family Living Trust. Mark Gillespie did not receive one-on-one reverse mortgage counseling and was not issued a HECM counseling certificate. Neil Gillespie received one-on-one reverse mortgage counseling and was issued a HECM counseling certificate. Susan Gray/CCCS/MMI provided Penelope Gillespie and Neil Gillespie a HECM counseling package by mail April 23, 2008. (Exhibit 14). The counseling package contained the following: a. Two Certificates of HECM Counseling, one for homeowner Penelope Gillespie and one for homeowner Neil Gillespie. The HUD certificate is on form OMB Approval No. 2502- HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 12 0524. An attached note states: If you decide to proceed with a Reverse Mortgage, you will need to give BOTH of these ORIGINAL CERTIFICATES to the lender of your choice. b. Reverse Mortgage Comparison - Selected Plans, prepared for Penelope Gillespie and Neil Gillespie. (Exhibit 14.1). c. FHA's Monthly Adjustable Home Equity Conversion Mortgage (HECM) Loan Estimated Amortization Schedule for Penelope Gillespie and Neil Gillespie. (Exhibit 14.2). The estimate makes certain assumptions, including, Assumes an INITIAL Interest Rate of 3.170% And Home Price Appreciation of 4%. The estimate makes no provision for falling home prices. d. Four (4) additional pages of reverse mortgage information. (Exhibit 14). A copy of the Certificate of HECM Counseling was signed by Penelope Gillespie. (Exhibit 15). The lender did not submit a signed Certificate of HECM Counseling for Neil Gillespie. A voice recording of the telephonic counseling session was made in .wav format. A CD copy is enclosed. All calls made to home office telephone extension (352) 854-7807 are recorded for quality assurance purposes pursuant to Florida Statutes chapter 934, section 934.02(4)(a)(1) and the holding of Royal Health Care Servs., Inc. v. J efferson-Pilot Life Ins. Co., 924 F.2d 215 (11th Cir. 1991). This was to keep an accurate record of Ms. Gillespies medically-related calls from doctors, and as a disability accommodation for Neil Gillespie. Some of the information provided to Penelope and Neil Gillespie April 22, 2008 by Susan Gray/CCCS/MMI during this counseling session was not accurate. For example, Ms. Gray said (at 26 minutes, 21 seconds in the recording) that in year 10 the balance on the loan would be $150,000, and the home value would be $207,000, resulting in equity of $57,000. However today, four years into the reverse mortgage, the home value is $85,564, resulting in an equity deficit of -$22,492 ($85,564 value - $108,056 RMA demand J un-08-12). At the end of the call, Ms. Gray said Your home should maintain positive equity for a long time. (at 33 minutes, 50 seconds in the recording). Clearly this was inaccurate information. Ms. Gray did not state that the property could decline in value. When Neil Gillespie asked about the buyers margin interest rate, Ms. Gray was unable to answer, and said and Ill be honest Neil, I dont understand the mathematical reasoning either other than it has something to do with the floor that was used when they made up these factor tables. When Neil Gillespie asked what floor meant, Ms. Gray did not know. (at 41 minutes, 30 seconds). The FHA's Monthly Adjustable Home Equity Conversion Mortgage (HECM) Loan Estimated Amortization Schedule for Penelope Gillespie and Neil Gillespie shows at year four (4) an ending loan balance of $118,550, a home value of $163,780, and a retained equity of $45,230. (Exhibit 14.2). The actual home value today is $85,564, and the current loan balance is $108,056 per RMAs demand letter of J une 8, 2012, resulting in an equity deficit of -$22,492. The gross equity difference, as compared to the figures in Exhibit 14.2, is $67,722. (-$22,492 vs. $45,230). HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 13 HUD and its agent Ms. Gray/CCCS/MMI owed Penelope Gillespie, Neil Gillespie, Mark Gillespie, and the Gillespie Family Living Trust, a fiduciary duty, and a duty of competence. The financial disclosures provided by HUD/Susan Gray/CCCS/MMI about this reverse mortgage were false, both in print form, and during the telephonic counseling session April 22, 2008. 8. HUD HECM Counseling For Borrowers Lacking Legal Competency For borrowers lacking legal competency, the counseling session shall be conducted with a person holding a power of attorney (POA) for the borrower. HUD handbook 7610.1, Chapter 4, Section 4-14 C, and elsewhere: C. Borrowers Legal Representative. For borrowers lacking legal competency, the counseling session shall be conducted with a person holding a power of attorney (POA) for the borrower, or a court-appointed conservator or guardian. HUD handbook 7610.1 states, Section 4-18 F. Issuing the Certificate of Counseling. (relevant part) A certificate of counseling may be withheld if the counselor believes that the counseling recipient did not understanding basic information about reverse mortgages. A counseling agency must withhold a certificate from a client who cannot successfully answer five of the ten review questions that are provided in Attachment B.10 of the Protocol. The client will be given adequate opportunities to correctly respond to the review questions in accordance with the requirements in Attachment B.10. The certificate cannot be withheld based on lack of payment. The recording of the HUD telephonic counseling session April 22, 2008 with Susan Gray/CCCS/MMI shows Penelope Gillespie did not actively participate in the call or the counseling. Ms. Gray did not ask Ms. Gillespie to successfully answer five of the ten review questions or make any effort to determine if she understood basic information about reverse mortgages. Therefore Ms. Gray should not have issued the certificate to Penelope Gillespie. Penelope Gillespie was not able to understand basic information about a reverse mortgage, or benefit from the telephonic counseling provided by Susan Gray/CCCS/MMI. Penelope Gillespie Lacked Legal Competency Penelope Gillespie suffered from Alzheimers dementia and other serious aliments at the time of the HECM reverse mortgage and counseling session. Ms. Gillespie lacked capacity to make a contract in 2008, and died of dementia September 16, 2009. Neil Gillespie was appointed attorney-in-fact several times by Ms. Gillespie under Florida law, including a Durable Power of Attorney (POA) made February 21, 2006. A copy of the POA is provided as Exhibit 31. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 14 The record shows that this loan failed to comply with requirements related to competency as set forth in HUD handbooks 4235.1 and 7610.1. Neil Gillespie was Penelope Gillespies primary caregiver and had POA, but the lenders and related parties failed to require the use of the POA. Dr. Gregory J . Howell, MD, of the Ocala Neurodiagnostic Center, treated Ms. Gillespie for dementia from November 2005 through December 2006. During an office visit May 8, 2006, Dr. Howell said Ms. Gillespie was not competent to make financial decisions, or to give things away. Dr. Howell said someone must have POA to manage the affairs of Ms. Gillespie. Neil Gillespie brought Ms. Gillespie to the office visit on May 8, 2006 and made notes. This office visit was a follow-up to Dr. Howells written comments of March 27, 2006 opining about the competence of Ms. Gillespie. Dr. Howell wrote It sounds to me like pt. has Alz. Dementia & needs supervision. (double underline). Neil Gillespie had written to Dr. Howell March 21, 2006 about certain transactions involving the daughter of Ms. Gillespie. At the time Ms. Gillespie was not able to drive, not able to balance her check book, and lacked understanding of her finances and legal matters. Ms. Gillespie needed help with meal preparation, shopping, housework, and sometimes dressing. Ms. Gillespie was dependent on Neil Gillespie to administer her medication, and for all aspects of her healthcare, since December 2005. Ms. Gillespie suffered an adverse reaction to Rythmol, an anti-arrhythmic heart medication. Ms. Gillespie was hospitalized December 6, 2005 through December 23, 2005, followed by inpatient nursing care through J anuary 16, 2006. The incident was life-threatening. Neil Gillespie was caregiver to Penelope Gillespie as defined by 825.101(2), Florida Statutes: (2) Caregiver means a person who has been entrusted with or has assumed responsibility for the care or the property of an elderly person or disabled adult. Caregiver includes, but is not limited to, relatives, court-appointed or voluntary guardians, adult household members, neighbors, health care providers, and employees and volunteers of facilities as defined in subsection (7). Neil Gillespie was appointed Designated Health Care Surrogate by Penelope Gillespie under Florida law February 21, 2006. Neil Gillespie was designated proxy by Penelope Gillespie under her Advance Medical Directive or living will May 4, 2006 under Florida law. HUD handbook 4235.1 REV-1, 4-6 POWER OF ATTORNEY AND CONSERVATORSHIP GUIDELINES. The following guidelines apply to all phases of HECM loan processing: 2) Borrowers lacking legal competency: a. Incompetent borrower may not sign the mortgage loan application. c. A person holding a durable power of attorney specifically designed to survive incapacity and avoid the need for court proceedings, may execute any necessary documents, including the mortgage loan application. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 15 (1) To be valid, a durable power of attorney must be prepared when the "principal" is competent to understand the nature and significance of the instrument. (2) The durable power of attorney must comply with State laws regarding signatures, notarization, witnesses, and recordation. (4-6) C. Counseling Session. For borrowers lacking legal competency, the counseling session may be conducted with a person holding a power of attorney, or with a court-appointed conservator or guardian. (4-7A.) b. If the borrower lacks legal competency and the loan application is being executed by a person holding a durable power of attorney, or by a court-appointed conservator, the face-to-face interview must be conducted with the person holding the power of attorney or conservator. HUD handbook 4235.1, CHAPTER 6. CLOSING AND ENDORSEMENT 6-7 BORROWERS LACKING LEGAL COMPETENCY. Power of attorney (durable or otherwise) may be used for closing documents. Any power of attorney must comply with State law and allow for the Note to be legally enforced in that jurisdiction (see Paragraph 4-6). HUD handbook 7610.1, CHAPTER 5. RECORDKEEPING AND REPORTING 5-7 Counseling File. The housing counseling agency must maintain a separate confidential file documenting each unique, distinct provision of counseling services provided to a client, as described in 214.300 and Chapter 3. The client file may be for an individual or household or for a group of clients with the same housing need, such as tenants of an apartment complex with the same complaint against their landlord. Files may be electronic or a combination of electronic and paper. The file must include the following items: Q. Reverse Mortgage Counseling. Additional documentation required for reverse mortgage client files: 3. Power of Attorney or other documents relating to legal competency, if applicable; 9. Misleading Financial Projections from Liberty Reverse Mortgage Liberty Reverse Mortgage, in an effort to sell its reverse mortgage product to Penelope Gillespie, Neil Gillespie, and Mark Gillespie, made and provided a number of financial calculations. The Gillespie family relied on the information and made a reverse mortgage. Information provided by Liberty and relied upon by the Gillespie family has proved not accurate. Liberty Reverse Mortgage, Financial Title Company, and Park Avenue Bank owed Penelope Gillespie, Neil Gillespie, Mark Gillespie, and The Gillespie Family Living Trust, a fiduciary duty, and a duty of competence. Liberty breached that duty. As a result of the breach of duty, the Gillespie family sustained damages, the loss of home equity and threat of foreclosure. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 16 Our reverse mortgage made J une 5, 2008 is now over four years old. According to financial calculations provided to us by Liberty Reverse Mortgage, we should have a positive net equity. Instead we have negative equity of -$22,492. HUD creates false and misleading financial information through its Home Equity Conversion Mortgages calculator for Housing industry professionals. (Exhibit 42). In turn the Housing industry professionals use this false and misleading information to sell HECM reverse mortgages to unsuspecting and vulnerable senior citizens. As shown in our case, this practice strips borrowers of home equity and threatens families with foreclosure. Liz Baize/Park Avenue Bank provided on April 25, 2008 The Reverse Mortgage Analyst, signed by Liz Baize/Park Avenue Bank and Penelope Gillespie. (Exhibit 16). The figures provided assume a 3.66% per year annual interest rate and 4.00% per year future home appreciation. The Reverse Mortgage Analyst makes no provision for falling home prices. The Reverse Mortgage Analyst shows in year four (4) a loan balance of $100,839, a home value of $146,232, and net equity of $35,158. The gross equity difference today is $57,650. (-$22,492 vs. $35,158). (Exhibit 16). (Note: The page numbers on this document are not consecutive, suggesting pages may be missing). A letter to Penelope Gillespie dated May 16, 2008 from Frank A. Castillo of Liberty Reverse Mortgage states We have enclosed updated figures for your review. (Exhibit 17). Note that the letter from Mr. Castillo is on plain paper, not company letterhead. This may be due to the fact that Liberty Reverse Mortgage had been acquired by Genworth Financial Inc. The Reverse Mortgage Analyst figures assume a 3.17% per year annual interest rate and 4.00% per year future home appreciation. The Reverse Mortgage Analyst makes no provision for falling home prices. The Reverse Mortgage Analyst shows in year four (4) a loan balance of $101,269, a home value of $154,421, and net equity of $42,343. The gross equity difference today is $64,839. (-$22,492 vs. $42,343). (Exhibit 17). Liberty Reverse Mortgage provided at the closing J une 5, 2008 The Reverse Mortgage Analyst signed by Penelope Gillespie. The figures provided assume a 3.66% per year annual interest rate and 4.00% per year future home appreciation. The estimate makes no provision for falling home prices. The Reverse Mortgage Analyst shows in year four (4) a loan balance of $114,502 a home value of $154,421, and net equity of $29,109. The gross equity difference today is $51,601. (-$22,492 vs. $29,109). (Exhibit 18). 10. Financial Title Company Shows Three Borrowers on Final Closing Statement Financial Title Company (California), provided two (2) different Final Closing Statements dated May 29, 2008. Each statement shows three borrowers: Penelope M. Gillespie, Neil J . Gillespie, and Mark Gillespie. One closing statement is on the letterhead of Financial Title Company. The other statement is on HUD OMB Form 2502-0265. (Exhibit 19). HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 17 Each statement shows an incorrect closing date. The loan closed J une 5, 2008, not May 29th. Each closing statement shows that the settlement took place at 81 Blue Ravine Road, #220, Folsom, CA, 95630. This is incorrect. The settlement took place at Park Avenue Bank in Ocala, Florida. The HUD closing statement shows that the funding date was J une 18, 2008. This is incorrect. The funding date was J une 10, 2008. The closing statements were printed J une 18, 2008 by Leanette Adorkor. A cover letter from Fatima Pacheco, Escrow Officer for Financial Title Company, accompanied the closing statements. The documents were sent through the U.S. mail, and therefore subject to 18 USC 1341, mail fraud. (Exhibit 19). A second different HUD closing statement was printed by Fatima Pacheco May 28, 2008 at 2:00:42 p.m. that also shows three borrowers: Penelope M. Gillespie, Neil J . Gillespie, and Mark Gillespie. (Exhibit 20). This HUD closing statement was faxed May 29, 2008 to Have Seal Will Travel at (352) 854-0857. This is the fax number for Richard T. Kwiatkowski, of Have Seal - Will Travel, LLC. Mr. Kwiatkowski is the notary who appeared at Park Avenue Bank for the closing. Mr. Kwiatkowskis business card states that he is a Mobile Notary Public, Reverse Mortgage Advisor, and Certified Loan Signing Agent. (Exhibit 21). A third different Final Closing Statement was provided by Financial Title Company, on HUD OMB Form 2502-0265 with a closing date of J une 5, 2008, and a disbursement date of J une 10, 2008. This closing statement shows only one borrower, Penelope M. Gillespie. This closing statement shows the settlement took place at 81 Blue Ravine Road, #220, Folsom, CA, 95630. This is incorrect. The settlement took place at Park Avenue Bank in Ocala, Florida. This closing statement appears to be signed LA for Pacheco, which may mean Leanette Adorkor for Fatima Pacheco. The closing statement is also signed by Penelope M. Gillespie. (Exhibit 22). The closing statement shown as Exhibit 22 also contains the following warning: WARNING: It is a crime to knowingly make false statements to the United States on this or any other similar form. Penalties upon conviction can include a fine and imprisonment. For details see Title 18 U.S. Code Section 1001 and Section 101 In addition to the above, there are other estimated closing statements. 11. Problems After Closing - New Documents Signed and Notarized On J une 10, 2008 at 4:49 p.m. Liz Baize of Park Avenue Bank sent Neil Gillespie the following email about the HUD HECM reverse mortgage loan: (Exhibit 23). From: "LIZ BAIZE" <LIZB@parkavebank.com> To: <neilgillespie@mfi.net> Sent: Tuesday, J une 10, 2008 4:49 PM Subject: update Neil, there may be a day or two delay in funding your loan. I just notified your attorney that a small revision needed to be done because A) with all that signing, a signature line for your mom was missed AND the interest rate for the week before, although a slight HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 18 difference, was picked up in closing package and identified prior to being sent to HUD. Richard (at out expense) has agreed to go to your attorneys office to meet you there to sign the corrections; and Mr. Stermer said that was fine with him. I am trying to confirm with Liberty that they will cover any cost incurred if a notary needs to go back out to Mark. The difference in rate over the life of the loan is less than 1/8th percent. As soon as I know more I will be in touch. Sincerely, Liz Baize PAB To correct the documents, Richard T. Kwiatkowski, of Have Seal - Will Travel, LLC, came to the Gillespie Family home and made corrections. I do not recall exactly what was done, or if it was limited to the issues in the email from Liz Baize. 12. HECM Notice of Right to Cancel - Three Day Recession Period Penelope Gillespie was provided and signed J une 5, 2008 the HECM Notice of Right to Cancel. (Exhibit 24). We considered exercising our rights under the notice to cancel the reverse mortgage due to the high fees involved. We did not to cancel the reverse mortgage because we understood from the closing on J une 5, 2008 that the loan was made to three borrowers. This would give us longer use of the property, and more time in which to amortize the high fees. 13. Ongoing Problems and Confusion - HECM Reverse Mortgage and Bank of America This HECM reverse mortgage was, and continues to be, very complicated and confusing. Neil Gillespie contacted Bank of America many times after the closing in an effort to understand this reverse mortgage. One such contact was a phone call December 8, 2008 to Rick Fann of Bank of America about a $172.27 line of credit that appeared on the first monthly statement. This amount declined each month, as follows: Statement Period 06/16/2008 - 06/30/2008 showed Available Line of Credit of $172.27. Statement Period 07/01/2008 - 07/31/2008 showed Available Line of Credit of $166.17. Statement Period 08/01/2008 - 08/31/2008 showed Available Line of Credit of $160.08. Statement Period 09/01/2008 - 09/30/2008 showed Available Line of Credit of $154.60. Statement Period 10/01/2008 - 10/31/2008 showed Available Line of Credit of $14833. Statement Period 11/01/2008 - 11/30/2008 showed Available Line of Credit of $141.41. Statement Period 12/01/2008 - 12/31/2008 showed Available Line of Credit of $133.38. For some reason the Available Line of Credit declined each month, but there were no corresponding credit draw request. THE MONEY WAS DISAPPEARING INTO THIN AIR! This negative growth was a concern. The $172.27 appeared to represent an overpayment of closing costs. We faxed December 26, 2008 a request for a return of the overpayment. The faxed letter was in the name of, and signed by Penelope Gillespie, but Neil Gillespie composed and faxed the letter on her behalf because Ms. Gillespie was not competent to do so herself. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 19 In response Bank of America issued two checks to Penelope Gillespie. One was a Negative Growth Reimbursement Check in the amount of $38.89 dated J anuary 6, 2009 (Exhibit 35). The other was check in the amount of $133.38. (Exhibit 36). This was followed J anuary 14, 2009 by a seven-page letter of from Karen Yantis of Bank of Americas Reverse Servicing Division in Seattle. (Exhibit 37). The seven-page letter from Karen Yantis of J anuary 14, 2009 (Exhibit 37) presented a number of financial formulas and explanations best understood by a Certified Public Account with a law degree and a background in finance. The letter was largely incomprehensible to Neil Gillespie, and useless to Penelope Gillespie who was in an advanced stage of Alzheimers dementia. One confusing statement (of many) in the letter appears on page four (4), paragraph five (5): On the surface, this may seem to be a decrease in the Net Principal Limit. However, if we take into consideration that there was a $2,000.00 advance added to the loan balance (see Outstanding Loan Balance section), we can see there is actually an increase in the Net Principal Limit of $557.98. To better highlight this, let's run through another month of calculations using the new figures provided above. We are not aware that there was a $2,000.00 advance added to the loan. I cannot find evidence of this alleged $2,000 advance. Ms. Yantis concluded her letter with this understatement: The calculations referenced in this letter are quite complex and as such your Reverse Servicing department welcomes any questions you may have regarding the calculations. 14. Notice to Bank of America, and Reverse Mortgage Solutions We gave Notice to Bank of America (BofA) of our position that the loan was not due because there were three borrowers, including Neil Gillespie, and he resides in the home. Written Notice was provided to BofA by certified letter October 28, 2009, and several times thereafter. We gave Notice to RMA of our position that the loan was not due because there were three borrowers, including Neil Gillespie, and he resides in the home. Written Notice was provided to RMA by fax on J une 19, 2012. (Exhibit 25). After The Loan Closed - Suspect Behavior by Lenders and Affiliates 15. Bank Failure: The Park Avenue Bank, Valdosta, Georgia It appears that The Park Avenue Bank (PAB), Valdosta, GA, was insolvent and undercapitalized when it originated a HECM loan to the Gillespie Family, resulting in cutting corners to sell a product and earn fees, with a disregard for HECM regulations. On Friday, April 29, 2011 PAB was closed by the Georgia Department of Banking and Finance. PAB was assumed by Bank of the Ozarks. (Exhibit 26). The Federal Deposit Insurance Corporation (FDIC) was named Receiver. (Exhibit 27). The Park Avenue Bank was losing millions of dollars in J uly 2009 when the Federal Reserve and the Georgia Banking Commissioner entered into a Written Agreement with Park Avenue Bank, PAB Bankshares, and HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 20 their institution-affiliated parties to strengthen credit risk management practices and improve assets, etc., see Docket Nos. 09-084-WA/RB-HC and 09-084-WA/RB-SM. (Exhibit 28). The FDIC estimates the cost to the Deposit Insurance Fund (DIF) for banks failure is $306.1 million. However R. Bradford Burnette, a retired PAB executive, did much better. Burnette walked away with at least $1,422,831 from the banks holding company in 2009 at a time when the bank was losing millions. Reuters reported that Burnette was paid $1,809,870 in 2009 by PAB Bankshares, Inc., the banks holding company. According to the 2009 Director Compensation Table, the Company entered into a salary continuation agreement with Mr. Burnette while he was employed as an executive of the Company, an agreement that would provide Burnette with $165,087 per year for 15 years commencing when he turned age 65. At December 31, 2009, the net present value of the remaining payments due to Mr. Burnette was $1,220,539 using a discount rate of 6.36%. Still, that leaves $387,039 not accounted for from the Reuters story. 16. Financial Title Co. Shuts Down In California Financial Title Company closed less that two months after it mishandled our HECM loan, when it cut corners to earn fees, with disregard for HECM regulations. J ournalist Sharon Simonson of the Silicon Valley/San J ose Business J ournal reported J uly 30, 2008, Financial Title Co. shuts down in California. (Exhibit 29). In part, the story states: Financial Title Co. has shut its doors across the state as part of a closure of multiple offices and title companies by its parent, Mercury Cos. of Colorado. The decision by the largest real-estate title agent in Silicon Valley follows a move by Mercury's lenders to pull their line of credit after Mercury failed to meet loan requirements, according to an e-mail from J im Hilbun, president of United Title of Texas. Unite Title is also owned by Mercury. Examiners representing the California Department of Insurance, which regulates and polices title policy underwriters and agents, were on hand at all 57 Financial Title offices in the state Wednesday to ensure that escrow funds were properly handled and not stolen or lost, said Darrel Ng, press secretary for the agency. The abrupt move mirrors that of Financial's former sister company, Alliance Title Co., which also closed with almost no notice late last year. Former employees and landlords of Alliance have filed multiple lawsuits alleging they were not paid. Alliance declared Chapter 7 bankruptcy in Northern California federal court J une 5. 17. Genworth lures Liberty Reverse Mortgage with $50 Million This story shows the enormous profit in HECM lending to senior citizens, and a $50 million payment to the owners of Liberty Reverse Mortgage made about the time of our HECM loan, with the potential to earn more, resulting in cutting corners to sell a product and earn fees, with a disregard for HECM regulations. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 21 Staff writer Mark Anderson of the Sacramento Business J ournal reported J uly 29, 2007, Genworth lures Liberty Reverse Mortgage with $50 million. (Exhibit 30). In part: Liberty Reverse Mortgage Inc. was not for sale. But Genworth Financial Inc. badly wanted to add the nation's fourth-largest originator of reverse mortgages to its stable of financial services. Last week, its persistence paid off, as Genworth announced it would pay $50 million for the four-year-old Rancho Cordova company. Liberty founders Scott Hanson and Pat McClain could potentially earn more if performance goals are reached, Genworth spokesman Tom Topinka said. Hanson and McClain, the principals of Hanson McClain Retirement Planning, will take advisory committee positions with Genworth, Hanson said. The Liberty acquisition, which closes at the end of the year, continues the trend of large, independent reverse mortgage operations being bought out. IndyMac Bancorp Inc. in 2004 bought Financial Freedom. In April, Bank of America bought Seattle Mortgage, which operates Reverse Mortgage of America. Wells Fargo, IndyMac Bancorp Inc. and Seattle Mortgage Co. are now the top reverse mortgage companies, ahead of Liberty. "A lot of companies want to get into this business," said Rich Young, Sacramento branch manager of California Reverse Mortgage. His company was bought last year by Atlanta-based Generation Mortgage Co., now the 10th-largest reverse mortgage company in the country. "There is a huge need for this product, and there is a lot of demand. The estimate is that there is only 1 percent penetration in the market," Young said. With the slowdown in regular mortgages and the fallout of subprime lending, some regular mortgage professionals are trying to do reverse mortgages, Young said. "They don't realize this is a completely different business," he said. Reverse mortgages are a highly specialized product. Federal law mandates a two-hour counseling session for the person who signs the loan papers. Hanson McClain has grown to $1.2 billion in assets under management. A subsidiary, the Hanson McClain Network, a marketing and transfer agent for independent retirement advisers, has more than $3 billion in assets under management. The Florida Division of Corporations website shows the following related to Liberty Reverse Mortgage and Genworth Financial Inc. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 22 April 25, 2008, Liberty Reverse Mortgage 2008 Annual Report, address change (Exhibit 38) November 17, 2008, name change to Genworth Financial, Inc. (Exhibit 39) 18. HUD Press Release, February 9, 2012: $1 Billion To Be Paid By The Bank Of America To The Untied States, Largest False Claims Act Settlement Relating to Mortgage Fraud Bank of America Background - Selections from Wikipedia Bank of America Corporation is an American multinational banking and financial services corporation headquartered in Charlotte, North Carolina. It is the second-largest bank holding company in the United States by assets. The bank's 2008 acquisition of Merrill Lynch made Bank of America the world's largest wealth management corporation and a major player in the investment banking market. This purchase made Bank of America Corporation the leading mortgage originator and servicer in the U.S., controlling 2025% of the home loan market. It has a retail banking footprint that covers approximately 80 percent of the U.S. population and serves approximately 57 million consumer and small business relationships at 5,700 banking centers and 17,750 ATMs. Bank of America received $20 billion in the federal bailout from the U.S. government through the Troubled Asset Relief Program (TARP) on J anuary 16, 2009, along with a guarantee of $118 billion in potential losses at the company. This was in addition to the $25 billion given to them in the Fall of 2008 through TARP. The additional payment was part of a deal with the U.S. government to preserve Bank of America's merger with the troubled investment firm Merrill Lynch. Since then, members of the U.S. Congress have expressed considerable concern about how this money has been spent, especially since some of the recipients have been accused of misusing the bailout money. Then CEO Ken Lewis was quoted as claiming "We are still lending, and we are lending far more because of the TARP program." http://en.wikipedia.org/wiki/Bank_of_America HUD Press Release, February 9, 2012 $1 Billion To Be Paid By The Bank Of America To The Untied States, Largest False Claims Act Settlement Relating to Mortgage Fraud As part of the global resolution between the United States of America and the five largest mortgage servicing banks in the country, which will bring much needed relief to financially distressed homeowners nationwide, Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced that the government will also resolve its claims against the Bank of America, Countrywide Financial Corporation and certain Countrywide subsidiaries and affiliates (Countrywide) for underwriting and origination mortgage fraud. Since 2009, the office has been investigating the Bank of America's lending practices to determine whether the bank, through Countrywide, which the bank acquired in 2008, knowingly made loans insured by the Federal Housing Administration (FHA) to unqualified home buyers. To date, the FHA has incurred hundreds of millions of dollars in damages as a result of this HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 23 conduct. The investigation also encompassed allegations that the bank and Countrywide defrauded the FHA insurance fund by originating mortgage loans that were based upon inflated appraisals. During the investigation, the office determined that the bank's conduct provides a basis for affirmative civil enforcement under, among other legal remedies, the False Claims Act, 31 U.S.C. 3729-33. As part of the global settlement, Bank of America will pay $1 billion to resolve the wrongdoing uncovered during the office's investigation Read more at the link, or Exhibit 40. http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2012/HUDNo .12-026 19. The Age Discrimination Act of 1975 HUD, by restricting HECM Reverse Mortgages to persons 62 years of age and older, may violate the Age Discrimination Act of 1975, 42 U.S.C. Sections 6101-6107. Section 6101, Statement of purpose: It is the purpose of this chapter to prohibit discrimination on the basis of age in programs or activities receiving Federal financial assistance. HUD handbook 7610.1, Appendix D, Section IV, Clients Needs and Circumstances, Borrowers Age: Effect on Eligibility (Page 95/181), states all borrowers must be 62 years old: "HECMs are available only to seniors age 62 or older. Other reverse mortgage products may have different age requirements. All borrowers on the loan must also be on the title and must be age 62 or older..." HUD handbook 7610.1, Chapter 3, Section 3-1 F. Civil Rights, states All participating agencies must administer their housing counseling programs in accordance with and remain in compliance with corresponding Departmental regulations and guidance and the following nondiscrimination regulatory and legislative requirements.e. The Age Discrimination Act of 1975 Neil Gillespie is 56 years-old and cannot qualify for a HECM loan based on his age. Therefore it appears that the HUD HECM program discriminates on the basis of age in programs or activities receiving Federal financial assistance. http://www.dol.gov/oasam/regs/statutes/age_act.htm The Bank of America is program or activity as defined by 6107(C)(I), a corporation which is extended Federal financial assistance. BofA received a $20 billion federal bailout, paragraph 18. 20. Chapter 825, Florida Statutes Abuse, Neglect, and Exploitation of Elderly Persons and Disabled Adults Penelope Gillespie was an elderly person as defined by section 825.101(5), Florida Statutes. Ms. Gillespie suffered from Alzheimers dementia at the time of the HECM reverse mortgage and HUD counseling session, and lacked the capacity to make a contract. This was readily apparent due to the inability of Ms. Gillespie to discuss basic details about this loan. Ms. Gillespie died of dementia September 16, 2009. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 24 Neil Gillespie is a disabled adult as defined by section 825.101(4), Florida Statutes. Neil Gillespie maintained a checking and savings account at Park Avenue Bank prior to this reverse mortgage. Neil Gillespie had his Social Security disability benefit payment deposited directly to Park Avenue Bank prior to this reverse mortgage. Therefore Park Avenue Bank knew that Neil Gillespie was disabled when this reverse mortgage was made. HUD, Susan Gray/CCCS/MMI, Liz Baize, Park Avenue Bank, Liberty Reverse Mortgage, Financial Title Company, Bank of America, and Reverse Mortgage Solutions (collectively called the lenders) were, or currently are, in a business relationship as defined by section 825.101(1), Florida Statutes with either Penelope Gillespie and/or Neil Gillespie, and the family trust. The lenders had a position of trust and confidence with respect to Penelope Gillespie and Neil Gillespie as defined by section 825.101(11)(c), Florida Statutes, a legal or fiduciary relationship as our lenders. The lenders provided professional services as defined by section 825.101(13)(b), Florida Statutes. Based on the allegations in this letter, the lenders engaged in exploitation and deception with regard to our business relationship with them as defined by section 825.101(3), Florida Statutes, (a)(1) misrepresenting or concealing a material fact relating to services rendered intended to benefit an elderly person or disabled adult; (a)(2) terms of a contract or agreement entered into with an elderly person or disabled adult; and (b) using any misrepresentation, false pretense, or false promise in order to induce, encourage, or solicit an elderly person or disabled adult to enter into a contract or agreement. The lenders exploitation and deception deprived Penelope Gillespie, (and estate), Neil Gillespie, Mark Gillespie, and the Gillespie Family Living Trust, of property as defined by section 825.101(12), Florida Statutes. The value of property lost is defined by section 825.101(14). The lenders violated section 825.103(1)(a), Florida Statutes, exploitation of an elderly person or disabled adult, knowingly, by deception, obtaining an elderly persons or disabled adults funds, assets, or property to benefit the lenders who stood in a position of trust and confidence with the elderly person or disabled adult and who had a business relationship with the elderly person or disabled adult. Under section 825.103(2)(a), Florida Statutes, the lenders may have committed a felony of the first degree because the funds, assets, or property involved in the exploitation of the elderly person or disabled adult is valued at $100,000 or more. Conclusion This complaint shows a fraudulent loan process by the lenders and affiliated parties under the HUD HECM reverse mortgage program. The information provided to Penelope Gillespie and Neil Gillespie during the HECM consumer reverse mortgage counseling was not accurate as to financial assumptions and projections. This practice strips borrowers of home equity and threatens families with foreclosure. HUD Complaint - Dispute Notice of Default and Intent to Foreclose August 9, 2012 Page - 25 The FHA's Monthly Adjustable Home Equity Conversion Mortgage (HECM) Loan Estimated Amortization Schedule for Penelope Gillespie and Neil Gillespie shows at year four (4) an ending loan balance of $118,550, a home value of $163,780, and a retained equity of $45,230. (Exhibit 14.2). The actual home value today is $85,564, and the current loan balance is $108,056 per RMAs demand letter of J une 8, 2012, resulting in an equity deficit of -$22,492. The gross equity difference, as compared to the figures in Exhibit 14.2, is $67,722. (-$22,492 vs. $45,230). Penelope Gillespie granted Neil Gillespie a life estate, the right to live in our home for the rest of his life. This life estate was verbal, not written. The HUD handbook notes on page 44 that: "Under FHA regulations at 24 CFR Section 206.35, if a HECM borrower holds a life estate in the property that will serve as the security for the FHA-insured HECM, persons with a reversionary or remainder interest in that property also must execute the HECM mortgage." The property at 8092 SW 115th Loop, Ocala, Florida, is Neil Gillespies homestead under Florida law. Neil Gillespie has lived in the home continuously since February 2005. Neil Gillespie has no other home, is not married, and does not have children. Neil Gillespie has no assets to pay off the mortgage, refinance, or buy another home. Neil Gillespies disability income is below 200% of the Federal Poverty Level. If RMS successfully forecloses on our home, Neil Gillespie will be homeless. At the time of the loan we believed Ms. Gillespies lack of capacity was mitigated by the fact that Neil Gillespie and Mark Gillespie were also borrowers on the loan. If it is determined that Neil Gillespie and Mark Gillespie are not borrowers on the loan, then Ms. Gillespies lack of capacity is very significant, and the reverse mortgage is void or voidable and must be canceled. Wherefore, in consideration of the above, the HECM reverse mortgage is void or voidable and unenforceable. Kindly cease and desist any and all foreclosure action immediately. Thank you. Sincerely, Neil J . Gillespie 8092 SW 115th Loop Ocala, FL 34481 Telephone: (352) 854-7807 cc: Mark Gillespie Enclosures: Exhibit A, attached; Exhibit B, one audio CD enclosed; Appendix 1 (Exhibits 1-21), Appendix 2 (Exhibits 22-42). 7196 9006 9296 0216 1259 RM S"Reverse Mortgage Solutions, Inc. June8, 2012 SentViaCertifiedMail PenelopeGillespie Loan Number: 69977 PropertyAddress: 8092SW115THLOOP OCALA,FL34481 NOTICEOFDEFAULTANDINTENTTOFORECLOSE DearPenelopeGillespie: ReverseMortgageSolutions,Inc., (hereinas "RMS")iscurrentlyservicing yourmortgageloanthatissecuredby theabove referencedproperty.You areherebyformally notified IJlat the mortgageloan associated with the referencedDeedof TrustIMortgageis indefaultbecauseofthedeathofthe primarymortgagorandtheloanmustbe paidinfull. Tocurethis default, you mustforward funds in theamountof$108,056.19consistingofthe principaldue,plus all interest and fees throughJuly8, 2012. It ispossiblethatafterpaymentoftheamountsdetailedabovetheremaybeotherfeesstilldueandowing,including but notlimitedtootherfees,escrowadvancesorcorporateadvancesthatRMSpaidonyourbehalforadvancedto youraccount. Thisletterisaformal demand topay$108,056.19.If thedefaultis notpaidin full byJuly 8, 2012,RMS will takestepsto terminateyourownershipin thepropertybyaforeclosure proceedingorotheraction to seizethe property. IFYOUAREUNABLETOPAYYOURACCOUNTINFULL,RMSoffersconsumerassistanceprogramsdesignedto help resolvedelinquenciesandavoidFORECLOSURE.Theseservicesareprovided withoutcosttoourcustomers.You may be eligibleforaloan workoutplan orothersimilaralternatives.If you wouldliketolearn moreaboutthese programs,you may contactthe LossMitigationDepartmentat(866)503-5559,betweenthe hours of8:30AM and5:00PMCST.WEARE VERYINTERESTEDINASSISTINGYOU. Thedefaultabovecanbecuredbypaymentofthetotal payoffamountplusanyadditional fees thatbecomeduebyJuly8, 2012. Notethatadditionalcharges,costsand fees maybecomedueduringtheperiodbetweentoday'sdateandthedatethe aforementionedpaymentsarereceived. PleasecontactourCollectionDepartmentat (866)503-5559 to obtainupdated payoffinformation. Pleaseincludeyourloannumberand propertyaddresswith yourpaymentand sendto: ReverseMortgageSolutions,Inc. 2727SpringCreekDrive Spring,TX77373 562439 12-02121-1 Page 1of2
A Ifyou wishto disputethedelinquency, orifyoudisputethe calculationofamountofthedelinquencyandreinstatement amount, you maycontactus by calling(866)503-5559. You havetherightto bringacourtactiontoassertthe non-existenceofadefaultorany otherdefense to accelerationor foreclosure sale. Failureto respondto this lettermay resultinthe lossofyourproperty.To theextentyourobligationhas beendischargedorissubjectto the autolnatic stayina bankruptcycase, this notice is for informational purposesonlyand doesnotconstituteademandfor paymentoran attemptto collectadebtasyourpersonalobligation. Ifyouarerepresented byan attorney, pleaseprovideus withtheattorney'sname, addressand telephone number. AttentionServicemembersanddependents:TheFederalServiceMembers'CivilReliefAct ("SCRA")andcertainstate lawsprovideimportantprotectionsfor you, includingprohibitingforeclosure undermostcircumstances.Ifyouarecurrently in the militaryservice,orhavebeenwithinthelast nine (9)months,ANDjoinedaftersigningtheNoteandSecurity Instrumentnowindefault, please notifyRMS immediately.WhencontactingRMSas to yourmilitaryservice,you must providepositiveproofas to yourmilitarystatus.Ifyoudo notprovidethisinformation, it will beassumedthatyouare not entitledto protectionundertheabove-mentionedAct. Ifyou areexperiencingfinancial difficulty, youshouldknowthatthereareseveraloptionsavailableto youthatmayhelp youkeep yourhome.You maycontactHUDGovernmentCounselingwhichprovidesfree orlow-costhousingcounseling. You shouldconsidercontactingoneoftheseagenciesimmediately.Theseagenciesspecializein helpinghomeownerswho arefacing financial difficulty. Housingcounselorscanhelpyouassessyourfinancial conditionandworkwithus toexplore thepossibilityofmodifyingyourloan,establishinganeasierpaymentplanfor you, orevenworkingoutaperiodofloan forbearance. Foryourbenefitandassistance, therearegovernmentapprovedhomeownershipcounselingagenciesdesigned to helphomeownersavoidlosingtheirhomes.To obtainalistofapprovedcounselingagencies,pleasecall(800)569-4287 orvisithttp://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm. NOPERSONINTHISOFFICEWILLGIVEYOUANYLEGALADVICE.If, atanytime,youmakea writtenrequestto us nottobecontactedbyphoneatyourplaceofemployment, we will notdoso. If, atanytime, you makea writtenrequest to us nottocontactyou, we will notdoso,exceptto sendstatutorilyand/orcontractuallyrequiredlegal notice. You maybe. eligiblefor assistancefromtheHomeownershipPreservationFoufldationorotherforeclosurecounselinga. You maycallthefollowingtoll-freenumbertorequestassistancefromtheHomeownershipPreservationFoundation: (888)995- HOPE(4637).Ifyou wish, you mayalsocontactus directlyat(866)503-5559andasktodiscusspossibleoptions. Thismatteris veryimportant. Pleasegive ityourimmediateattention. Sincerely, ReverseMortgageSolutions,Inc. (866)503-5559 FEDERALLAWREQUIRESUSTOADVISEYOUTHATREVERSEMORTGAGESOLUTIONS,INC,ISADEBT COLLECTORANDTHATTHISISANATTEMPTTOCOLLECTADEBT.ANYINFORMATIONOBTAINEDMAYBE USEDFORTHATPURPOSE.TOTHEEXTENTYOUROBLIGATIONHAS BEENDISCHARGEDORIS SUBJECT TOTHEAUTOMATICSTAYINABANKRUPTCYPROCEEDING,THISNOTICEISFORINFORMATIONAL PURPOSESONLYANDDOESNOTCONSTITUTEADEMANDFORPAYMENTORANATTEMPTTOCOLLECT ANINDEBTEDNESSAS YOURPERSONALOBLIGATION.IFYOUAREREPRESENTEDBYANATTORNEY, PLEASEPROVIDEUSWITHTHEATTORNEY'SNAME,ADDRESSANDTELEPHONENUMBER. 562439 12-02121-1 Page2of2 APPENDIX I Gillespie Complaint to HUD, August 9, 2012 U.S. Department of Housing and Urban Development (HUD) RE: Reverse Mortgage Solutions, acct./loan no. 68011002615899 Exhibit 1 Assignment of Mortgage to Reverse Mortgage Solutions, Mar-27-2012 Exhibit 2 Assignment of Deed to Bank of America, J un-03-2008 (unlawful) Exhibit 3 Notice of Assignment, Sale or Transfer, Servicing Rights, J un-03-2008 (unlawful) Exhibit 4 Direct Endorsement Allonge, to Bank of America, May 29, 2008 (unlawful) Exhibit 5 Residential Loan Application for HECM Reverse Mortgage, J une 5, 2008 Exhibit 6 Financial Title Company, Borrower's Escrow Instructions, May 28, 2008 Exhibit 7 Residential Loan Application for HECM Reverse Mortgage, April 25, 2008 Exhibit 8 Park Ave. Bank, Liz Baize letter with documents to Neil Gillespie Exhibit 9 HECM First Mortgage, J une 5, 2008, WITHOUT interlineation Exhibit 10 HECM Second Mortgage, J une 5, 2008, WITHOUT interlineation Exhibit 11 HECM First Note, J une 5, 2008 Exhibit 12 HECM Second Note, J une 5, 2008 Exhibit 13 Quit-Claim Deed, J une 5, 2008 Exhibit 14 Certificate of HECM Counseling package, Susan Gray-CCCS-MMI, Apr-23-2008 Exhibit 15 Certificate of HECM Counseling, signed, April 25, 2008 Exhibit 16 The Reverse Mortgage Analyst, April 25, 2008 Exhibit 17 Liberty Rev. Mort, Re-disclosed Calculations, May 16, 2008 Exhibit 18 The Reverse Mortgage Analyst, J une 5, 2008 Exhibit 19 Financial Title Co., Buyers-Borrower's Closing Statement, FINAL, May-29-2008 Exhibit 20 HUD Buyers-Borrowers Closing Statement, Faxed, Fatima Pacheco, May 28, 2008 Exhibit 21 Richard T. Kwiatkowski, business card, Have Seal - Will Travel, LLC. APPENDIX II Gillespie Complaint to HUD, August 9, 2012 U.S. Department of Housing and Urban Development (HUD) RE: Reverse Mortgage Solutions, acct./loan no. 68011002615899 Exhibit 22 HUD final settlement statement, HECM, J une 5, 2008 Exhibit 23 Email from Liz Baize, Park Ave Bank, problem with documents, J une 10, 2008 Exhibit 24 HECM Notice of Right to Cancel, J une 5, 2008 Exhibit 25 Fax to RMS, dispute the delinquency and foreclosure, J une 19, 2012 Exhibit 26 Bank Failure, Geoorgia Dept. Banking closed Park Ave. Bank, April 29, 2011 Exhibit 27 FDIC, receiver for Park Ave. Bank, April 29, 2011 Exhibit 28 FDIC, Park Ave. Bank, Consent, 09-084-WA/RB-HC-SM, J uly 14, 2009 Exhibit 29 San J ose Business J ournal, Financial Title Shuts Down, J uly 30, 2008 Exhibit 30 Genworth lures Liberty Reverse Mortgage with $50 million, J uly 29, 2007 Exhibit 31 Durable Power of Attorney, Neil Gillespie, February 21, 2006 Exhibit 32 HECM Mortgage, with INTERLINEATION Exhibit 33 HECM Second Mortgage, with INTERLINEATION Exhibit 34 Tom DeBeauchamp, BofA FedEX label, J anuary 15, 2009 Exhibit 35 Negative growth reimbursement check, $38.89, J anuary 6, 2009 Exhibit 36 Reimbursement check, $133.38 J anuary 6, 2009 Exhibit 37 Letter, Karen Yantis, BofA, RE: Negative Growth, J anuary 14, 2009 Exhibit 38 Liberty Reverse Mortgage, Fla. Div. Corp., 2008 Annual Report Exhibit 39 Liberty Reverse Mortgage, Fla. Div. Corp., 2008 name change to Genworth Exhibit 40 HUD: $1 BILLION TO BE PAID BY THE BANK OF AMERICA Exhibit 41 HUD Rev. Mortgage Handbook, B.10 Reviewing Clients Level of Understanding Exhibit 42 General Allegations, HUD, breach of Fiduciary Duty, Predatory Lending
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