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Gwinnett County Woman Pleads Guilty to Residential Mortgage Fraud

PRESS ADVISORY

Gwinnett County Woman Pleads Guilty to Residential Mortgage Fraud

February 17, 2011

Kimberly Martin, a former Alpharetta homeowner, pled guilty today to one count of residential mortgage fraud and one count of theft by deception. Martin was sentenced by Judge R. Timothy Hamil in Gwinnett County Superior Court to seven years imprisonment, followed by 13 years probation, that sentence to run concurrent with her prior federal sentence for bank fraud. In addition, Martin has been ordered to pay $188,618.57 in restitution. Special conditions of the probation are that Martin cannot obtain employment or a license in the real estate or mortgage business, and she is prohibited from acting as a business or corporate fiduciary.

In February 2006, Martin refinanced a home she owned in Alpharetta, receiving $166,696.23 in proceeds at closing from a mortgage lender. However, Martin failed to disclose that a first mortgage on the property already existed with another mortgage lender in the amount of approximately $271,000. The attorney's office handling the closing received a fax, purportedly from a mortgage broker containing documents indicating that the first loan had been paid off. In fact, the letter and security deed had been forged, and the prior loan was still fully in place. At closing, Martin signed a document falsely stating that no pre-existing mortgage existed. Believing there was no other pre-existing mortgage, the new mortgage lender funded its loan.

Shortly after the closing, Martin filed for bankruptcy and listed her loan with the first mortgage lender but failed to disclose her loan with the second mortgage lender. Additionally, she did not reveal receipt of the money she received from the second closing. The first mortgage lender eventually foreclosed on the property in November 2006, wiping out the second lender’s mortgage. The loss went to the title insurance company which had insured the loan from the second lender.

Assistant Attorney General Greg Lohmeier prosecuted Martin on behalf of the State of Georgia.