Servicers Alerted to Reverse Scams.(mortgage banks)

Philadelphia -- The reverse mortgage sector has not been overlooked by the scam artists that have pillaged the rest of the mortgage business. But servicers can fight back by thinking like a criminal.

"You don't have to hire a criminal, just think like one," Linda Bridges of Wells Fargo Home Mortgage, Fort Hill, S.C., advised at the National Reverse Mortgage Lenders Association's Eastern Regional Meeting here.

Some of the red flags mentioned by Ms. Bridges, who runs Wells' reverse mortgage servicing sector, include multiple draws within a single month, hushed voices in the background when borrowers call in, and frequent changes in phone numbers and addresses. Her advice: "Make sure you are working with the borrower and not someone who's out to pilfer your life savings." To authenticate customers who call for draws on their lines of credit, Wells routinely validates their name and address, birth dates, last four digits of their Social Security numbers and their personal identification numbers. The company, which is the largest origination of government-insured reverse mortgages, strongly suggests to its customers that they receive their funds as direct deposits. And just to be sure there isn't some hanky-panky going on, it makes certain the name on the bank account is the same as the name on the note.

When there is what Wells considers to be an unusual amount of activity in the account, it always ...