Exploring HECM counselors’ fraud awareness and training
| Published date | 30 September 2014 |
| Pages | 484-494 |
| Date | 30 September 2014 |
| DOI | https://doi.org/10.1108/JFC-03-2013-0020 |
| Author | Martin C. Seay,Andrew T. Carswell,Melissa Wilmarth,Lloyd G. Zimmerman |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Exploring HECM counselors’
fraud awareness and training
Martin C. Seay
Department of Family Studies and Human Services,
Kansas State University, Manhattan, Kansas, USA
Andrew T. Carswell
Department of Housing and Consumer Economics,
University of Georgia, Athens, Georgia, USA
Melissa Wilmarth
Department of Consumer Sciences, University of Alabama, Tuscaloosa,
Alabama, USA, and
Lloyd G. Zimmerman
Department of Family Studies and Human Services,
Kansas State University, Manhattan, Kansas, USA
Abstract
Purpose – The purpose of this research was to explore the growth of Home Equity Conversion
Mortgage (HECM) fraud and the role of housing counselors in its identication and prevention. HECMs
are the Federal Housing Administration endorsed version of a reverse mortgage and represent the
majority of reverse mortgages on the market.
Design/methodology/approach – To investigate HECM counselor’s training, and their ability to
detect fraudulent activity, a survey was constructed and distributed nationwide using HUD’s publicly
available roster of qualied agencies and counselors. The survey consisted of three main sections
agency and respondent information including HECM certication process, typical interactions with
clients, and mortgage fraud and HECM fraud.
Findings – Responses indicate that HECM counselors have limited awareness of and training in
identifying fraudulent activities.
Originality/value – The case is made that additional training is needed to raise awareness among
counselors so that they might better serve their clients. Given the sizable population that may
legitimately need HECMs, it is important to improve awareness and provide training to detect
fraudulent schemes and prevent this type of deception from occurring.
Keywords Fraud awareness, Fraud prevention, Home equity, Mortgage fraud, Reverse mortgage
Paper type Research paper
The authors would like to thank the Georgia Real Estate Fraud Prevention and Awareness
Coalition (GREFPAC) for providing nancial assistance that helped make this research possible.
GREFPAC played no role in the research design of this work or in the submission process of this
manuscript.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1359-0790.htm
JFC
21,4
484
Journal of Financial Crime
Vol. 21 No. 4, 2014
pp. 484-494
© Emerald Group Publishing Limited
1359-0790
DOI 10.1108/JFC-03-2013-0020
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