Daily Reporter Staff

A mortgage and home refinancing scam has led to charges against an Emmetsburg woman.

Emmets-burg police officers took 56-year-old Terry Hoffert into custody Thursday on behalf of the Spencer Police Department. She was charged with ongoing criminal conduct and two counts of first-degree theft. As an abstractor, Hoffert served as a closing agent for people who refinanced their homes for more favorable rates. Charges were filed when she allegedly kept money from a second mortgage, which was intended to pay off a first mortgage.

"During the closing process, when the second bank issued a check to pay off the first loan at the first bank, it's alleged that Hoffert wouldn't forward that money to pay off the loan, but kept that," Spencer Police Chief Mark Lawson explained. "Then in the process of this whole thing, the addresses somehow got changed, so if a payment got missed, the people who thought that first loan was paid off would never receive any mailings or notifications. They instead went to Hoffert's post office box."

The misdirected funds were discovered when one Spencer family tried to take out a home equity loan for an addition to their property and were denied because the first loan was never paid off.

Lawson is aware of at least four other property transactions with similar circumstances.

Two Clay County properties are in question and led to the first-degree theft charges. The unpaid Spencer-area mortgages add up to about $157,000. Two transactions in Pocahontas County and one in Emmet County add another $280,000.

Lawson's investigators have reason to suspect the process of shuffling payments and past due notices happened over the span of several years. Hoffert operated her abstract and title company out of Spencer, then continued the business out of her home in Emmetsburg.

"We're encouraging people to check their credit history and find out if there were loans, or if there is second loans on a piece of property that they thought had been paid off," Lawson said.

The police department expects more charges to come once people realize they worked with Hoffert.

The Spencer Police were assisted by the Iowa DCI, The United States Postal Inspector, and the Emmetsburg Police Department.