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HUD Complaint, HUD Reverse Mortgage Handbook 7610.01, Section 4-19

HUD Complaint, HUD Reverse Mortgage Handbook 7610.01, Section 4-19

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Published by Neil Gillespie
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

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VIA UPS NEXT DAY AIR August 9, 2012

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 Clerk’s 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 RMS’s “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 Alzheimer’s 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. Gillespie’s 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. Gillespie’s 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. Gillespie’s 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 “Borrower”…is 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 Borrower’s 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 “Borrower’s 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 HUD’s 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 Clerk’s 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 Client’s Level of Understanding
“The counselor must make specific efforts to review the client’s 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 client’s personal financial situation of the particular loan in which
he or she is interested; and
3. The client’s 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 Client’s 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 client’s
individual situation. Part of the counselor’s 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 client’s 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 agency’s 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 agency’s approved housing counseling
work plan. For example, agencies may only offer telephone counseling to clients in their
approved geographic area. With HUD’s approval, or at HUD’s discretion, geographic
scope can be expanded or reduced.
In order for a client to be classified as counseled under HUD’s 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
client’s 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 client’s spending habits to determine if the
client’s 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
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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. Gillespie’s 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
buyer’s margin interest rate, Ms. Gray was unable to answer, and said “and I’ll be honest Neil, I
don’t 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 RMA’s 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
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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. Borrower’s 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 Alzheimer’s 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 Gillespie’s 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. Howell’s 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. Kwiatkowski’s 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 America’s 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 Alzheimer’s 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 bank’s 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 bank’s 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 bank’s 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 20–25% 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, Borrower’s
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 Alzheimer’s 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 lender’s 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 person’s or disabled adult’s 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 RMA’s 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 Gillespie’s 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 Gillespie’s 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. Gillespie’s 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. Gillespie’s 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 disputethede·linquency, 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 Client’s Level of Understanding
Exhibit 42 General Allegations, HUD, breach of Fiduciary Duty, Predatory Lending

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