Victimized by WireFraud on a Real Estate Sale - Need advise

[Umesh Menon]

Hello BP Community,

We sold our home and the portion of the funds (~ 400K) that had to be wired to our Mortgage Servicer was sent to a fraudulent account (Wire fraud) by the title company. While Title company is investigating and trying to trace the funds; the mortgage company is following up with us to make the monthly payments. 

If we make the monthly payments until the issue is resolved, is there a way to recoup the payments once the pay off amount is retrieved? 

Alternatively, if we choose not make the monthly payments, how do we proactively ensure our loan is not reported as delinquent since we do not own the home any more?

Any help from the community is appreciated.

Thanks

[Dan Schwartz]

Assuming the mortgage servicer eventually gets the misplaced principal payment, you will have overpaid the principal of the mortgage when you make the supplemental monthly payments, and the mortgage servicer should return that extra principal to you, without question, when they ultimately close the books.

The mortgage servicer will not return the interest portion of your payments, and in fact some additional interest may be due when this is settled, despite your ongoing payments, because the interest is collected in arrears.  

You need to make sure the title company and it's errors & omissions policy, covers your ongoing interest expense.  You may also ask for additional compensation, as not clearing the debt from your books as they were hired to do could be costing you income-producing activities.

All of that said, you need legal representation right away.  You have $400K missing due to a vendor's error.  Don't just wait for them to "investigate it," make sure they have a demand letter from your attorney requiring immediate settlement.