Friday, November 19, 2010

MD Closing Agent Cops Plea To Pocketing Real Estate Closing Cash Meant For Existing Mtg Payoffs; Title Insurance Underwriter Left Holding $3.7M Bag

From the Office of the U.S. Attorney (Baltimore, Maryland):
  • Anthony V. Weis, age 45, of Phoenix, Maryland, pleaded guilty [] to wire fraud in connection with a mortgage fraud scheme to defraud lenders of approximately $3.7 million in just eight months.


  • According to Weis’s plea agreement, Weis was the president and a shareholder of Maple Leaf Title LLC (MLT), a real estate title agency located in Towson, Maryland. Weis directed MLT employees in 13 real estate closings conducted between February and September 2009 to withhold the payoff checks from institutions that held the existing mortgage loan notes on the properties. In each instance, the settlement statement sent to the borrower’s lender falsely represented that the payoff was being made.

  • In an effort to conceal the fraud scheme, Weis caused monthly mortgage payments to be made to the banks holding the mortgage notes. Believing that the bank had been paid off as a result of the settlement, the borrower stopped making monthly payments on that mortgage. And since that lender was receiving monthly payments, it had no reason to notify the borrower of any delinquency. However, because Weis was unable to send checks in every case where he had misappropriated the payoffs from escrow, a number of MLT clients received delinquency notices for non-payment of the mortgage note. A few were threatened with foreclosure and were forced to hire attorneys to prevent being ejected from their homes.

  • Because the existing mortgages had not been paid off, the liens against the property were not removed and a title free of pre-existing liens and claims (clear title) could not be passed to the new lender and borrower. An insurance company had issued title insurance policies to the borrowers guaranteeing clear title. As a result of Weis’s criminal conduct, the title insurance company ultimately paid out $3.7 million to financial institutions that held mortgage notes.

For the U.S. Attorney press release, see Towson Title Agency Operator Pleads Guilty in $3.7 Million Mortgage Fraud Scheme (Failed to Make $3.7 Million in Pay Offs to Mortgage Lenders Holding Liens on 13 Properties).