Florida Closing Agent Admits Pocketing Client's Refi Proceeds, Leaving Retiree Facing Foreclosure; Scammer Moved To State After NY Fraud Conviction

In Archer, Florida, The Wall Street Journal reports:

• Last summer, Lawrence Ford jumped into the fast-growing market for so-called reverse mortgages. The retired auto mechanic and horse trainer used the money he received to pay off his existing $70,000 mortgage and "piddled away" the remaining $24,000 on things like restaurant meals for his four girlfriends, he says. Or so Mr. Ford thought. Last month, the owner of the Orlando, Fla., title company that handled his loan admitted to stealing more than $1 million from several reverse-mortgage holders, including Mr. Ford. Bank of America Home Loans, a unit of Bank of America Corp., says the title agent never sent it the money required to pay off Mr. Ford's mortgage. As a result, Mr. Ford says, the bank recently threatened to foreclose on his seven-acre ranch in Archer, Fla. "That will put me on the streets with my cars and horses and tools," says the 68-year-old Mr. Ford. Bank of America, which says there is no immediate danger of foreclosure, adds that it is working with Mr. Ford "to find a home-retention solution."

***

• Before moving to Orlando in 2008, Garry Martin, 37, the title agent on Mr. Ford's reverse mortgage, was convicted of mortgage fraud in New York. In Florida, Mr. Martin orchestrated about 10 reverse-mortgage schemes,(1) pocketing about $1 million, prosecutors say. As title agent, Mr. Martin was obligated to distribute funds from his victims' reverse mortgages to retire their conventional mortgage loans. But according to prosecutors, he kept much of the money. To prevent his victims from catching on, he arranged for their monthly mortgage statements to be mailed to an address he controlled. The scheme unraveled when the banks contacted the victims about their missed mortgage payments.

• Mr. Martin, who pleaded guilty to stealing over $5 million from more than 50 victims of mortgage-related frauds, faces up to 20 years in prison. His attorney declined to comment. Mr. Ford, meanwhile, fears he may be running out of options. Unless the bank agrees to modify his loan, he says, "I don't see a way out."

For the story, see Mortgage Fraud: A Classic Crime's Latest Twists (As 'Reverse' Loans Grow More Popular, Scams Put Older Adults at Risk).

(1) Referring to this ripoff as a "reverse mortgage scheme" is somewhat misleading. What was done in this case was simply nothing more than a flat out theft of escrow funds by a corrupt closing agent, where the refinancing proceeds that were derived just happened to come from a reverse mortgage. There is nothing inherent about a reverse mortgage that makes pulling off this scam any easier than if a conventional mortgage was involved. EscrowRipOffKappa