Louis Gendason of Delray Beach, Fla.; Kimberly Mackey of Pittsburgh; and John Incandela of Palm Beach, Fla., pleaded guilty to one count of conspiracy to commit wire fraud for their participation in a $2.5 million reverse mortgage fraud scheme. A reverse mortgage allows borrowers, who are at least 62 years of age, to convert the equity in their homes into a monthly stream of income, or a line of credit. Unlike the traditional mortgage loan scenario, in which borrowers make monthly payments to a mortgage lender in satisfaction of their outstanding loan, in a reverse mortgage loan scenario, the mortgage lender purchases borrowers’ equity and makes installment payments to the borrower. According to the information and statements made during the plea hearing, from May 2009 through November 2010, the defendants engaged in a reverse mortgage scheme that defrauded unwitting borrowers, Genworth Financial Home Equity Access Inc. and the Federal Housing Administration (FHA). Gendason and Incandela, working as loan officers at 1st Continental Mortgage, with offices in Fort Lauderdale and Boca Raton, Fla, solicited individuals, ages 62 and older, from around the country to refinance their existing mortgages with a reverse mortgage loan financed by Genworth, located in Rancho Cordova, Calif. To qualify the borrowers for the loans, Gendason altered real estate appraisals to fraudulently inflate the value of the borrowers’ properties. In fact, however, none of the borrowers had sufficient equity in their properties to qualify for a reverse mortgage. The defendants then submitted the fraudulently inflated appraisals to Genworth. Based on the false documentation, Genworth approved and the FHA insured more than $2,572,813 in reverse mortgage loans. As a further part of the conspiracy, Mackey, a licensed title agent and proprietor of Real Estate One Land Services Inc. (REO), located in Pittsburgh, fraudulently closed the Genworth loans, failing to pay off the borrowers’ existing mortgage loans. Genworth wired the loan proceeds to Mackey as the designated closing agent for 1st Continental. Mackey attempted to conceal the fraudulent loan closings by preparing false HUD-1 settlement documents that showed that the existing mortgages had, in fact, been paid off. Between May 2009 and November 2010, Mackey received loan proceeds from Genworth totaling $2,572,813.19. Mackey fraudulently diverted at least $988,086.33 to a bank account controlled by Incandela and Gendason, who used this money for their personal benefit. Thereafter, to perpetuate the fraud, the defendants engaged in a loan modification scheme to conceal the existence of the Genworth reverse mortgage transactions from the original mortgage lenders, whose loans remained unpaid. To this end, Gendason, Incandela and Mackey conspired to create fictitious offers to buy some of the borrowers’ properties, in the form of short sales.