Marilyn Mosby case: Lenders testify in former Baltimore state’s attorney’s mortgage fraud trial

A series of loan underwriters testified Tuesday in the federal mortgage fraud trial of former Baltimore State’s Attorney Marilyn Mosby, providing critical, if expected, evidence for the prosecution’s case.

The underwriters said their companies relied on the information Mosby provided in mortgage applications for a pair of properties in Florida in deciding to issue her loans for hundreds of thousands of dollars to buy the homes.

Mosby, 44, is charged with making several false statements on mortgage applications for the properties: an eight-bedroom house near Disney World and a condo on the Gulf Coast. Her trial began Monday.

The government says Mosby neglected to disclose a federal tax debt in loan applications for both properties while also misleading lenders about her intended use for each residence. To prove their case, prosecutors have to not only convince the jury that Mosby lied but that her lies influenced the financial institutions’ decisions.

“We need to know all liabilities to make sure a borrower can afford a mortgage,” said Andrew Metter, formerly of United Wholesale Mortgage, which approved Mosby’s mortgage loan for the condo in Longboat Key. “We are evaluating risk. If there’s debt, we want to know about it. We take this into consideration when approving or denying a mortgage loan.”

Mosby’s lawyers maintain she did not intentionally lie.

They sought to poke holes in the prosecution’s theory through cross-examination that focused on the responsibilities of Mosby’s mortgage broker, who represented her in the process of obtaining loans for both Florida homes. Their questions elicited testimony that the broker communicated with the underwriters and submitted documents on Mosby’s behalf.

“If you needed something during the loan process, you would’ve reached out to her broker, correct?” Assistant Public Defender Sedira Banan asked two of the underwriters, both of whom responded in the affirmative.

Assistant State’s Attorney Aaron Zelinsky directed Joshua Marsh, who was an underwriter for Cardinal Financial Co. when it approved Mosby’s loan for the eight-bedroom house outside Orlando, to a section in the application Mosby signed. Marsh read the passage aloud in court.

The application said lenders and brokers “may continuously rely on the information contained in the application,” and said the applicant was required to supplement what they provided if they learned any of it was untrue or changed.

In November, a jury found Mosby guilty of two counts of perjury, determining she lied about suffering financial hardship because of the coronavirus to make herself eligible to withdraw $80,000 from her city retirement fund under a provision of the federal CARES Act, Congress’ first pandemic relief package.

Mosby used the money on down payments and closing costs for the Florida properties. While the jury in November heard evidence about how Mosby obtained and spent the money, it was tasked only with judging the former. The jury seated by defense attorneys and prosecutors last week will focus on Mosby’s real estate transactions.

As far as the tax debt, the defense seems poised to put the blame on Mosby’s ex-husband, Baltimore City Council President Nick Mosby. The former power couple divorced in November, but pretrial papers show defense lawyers, who long signaled their intent to call Nick Mosby as a witness, intend to get him to tell the jury he was responsible for the couple’s taxes.

Nick Mosby was listed as a potential witness during jury selection, along with Mosby’s mortgage broker, Gilbert Bennett.

Mosby completed her purchase of the house near Orlando in September 2020 before turning her attention to a condo on the Gulf Coast. She closed on that property in February 2021.

She filled out two mortgage applications for the condo. At first, she said it was going to be her primary residence. In the second application, she said she wanted the condo to be a second home.

To support the second-home claim, she submitted a letter saying she and her family had been in Florida for the last 70 days, living at the house near Disney World.

In fact, Nick Mosby’s and Marilyn Mosby’s bank and credit card records showed she had been in the Sunshine State for 37 of the last 70 days, testified Jenna Bender, a forensic accountant with the FBI.

According to text messages and emails between Bennett and Mosby, Bennett recommended Mosby write that she was in Florida for the last 40 days. Even though Bennett proposed the idea of writing such a letter, Mosby chose not to adopt all of the suggestions he made, Bender testified.

With Bender on the stand, prosecutors paged through the couple’s financial records. She played a similar role in Mosby’s perjury trial.

Though Mosby got $45,000 from a late December withdrawal from her retirement fund under the CARES Act, she was still short $4,600 of the down payment required at closing for the condo.

By that time, the mortgage lender already had locked in an interest rate for Mosby’s mortgage, testified Austin Gordon, an underwriter who helped process the loan. If Mosby didn’t close on the property then, Gordon said, “that rate lock was set to expire.”

Prosecutors accused Mosby of making up a $5,000 gift from her husband to cover the shortage. In the letter, Nick Mosby said he would transfer that amount to his then-wife at closing.

Bennett had emailed Mosby a template for the so-called “gift letter,” according to Bender’s testimony.

But Bender testified Nick Mosby didn’t have $5,000 in his account to give Mosby.

Instead, Mosby waited a few days until she got her biweekly payment as state’s attorney and transferred $5,000 to Nick Mosby. Nick Mosby transferred the money from his checking account to his savings account and back again, before sending it to Marilyn Mosby, according to Bender.

Bender will resume her testimony Wednesday, answering questions from Mosby’s lawyers.

Prosecutors said Bender was likely their last witness.

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