Add this to your to-do list if you're refinancing or about to sell a home: Make sure the original mortgage actually gets paid off.
Today's reminder comes courtesy of Todd R. Bettin of Crofton, who was sentenced Wednesday to more than four years in prison for diverting mortgage payoffs on 17 Maryland properties to himself and a co-defendant, according to federal prosecutors.
Bettin, who worked in the mortgage business, and co-defendant Gary Pierce, who owned a settlement company, falsified documents to make it appear that mortgage payoffs went to the lenders, prosecutors said. Then they got those lenders to redirect the bills their way by pretending to be the borrowers, allowing Bettin to make the monthly payments on the loans to avoid detection, prosecutors said.
Erica Evans, project manager at Civil Justice, a Baltimore nonprofit that specializes in mortgage issues, said homeowners should never assume that all is well. Call your former mortgage servicer after the sale or refinancing -- waiting several days to allow for processing.
"Just follow up," she said. "Make sure everything's paid off. If you're paying off two mortgages, make sure both mortgage companies are getting their money."
Same goes for liens that are supposed to be paid off or other debts, like credit cards, that you think you're consolidating. A scammer might stay above board with the big stuff but assume they can "kind of fly under the radar" with smaller obligations, Evans said.
If your refinanced mortgage isn't paid off, you could end up in a really bad situation. Just ask Kwaku Atta Poku, who lost his Columbia home as a result even though he himself had never missed a payment. (After years of battling for help after the 2005 foreclosure, he finally got a settlement -- enough for a down payment on another house.)
If you do discover that your mortgage hasn't been paid off, contact the settlement company and your new lender (if you refinanced) to find out why, Evans said. If you're not getting satisfaction, you might want to call an attorney -- and definitely call the authorities. The Maryland U.S. attorney's office is among those handling mortgage fraud cases.
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