All good questions. I think the only one that can be answered at present is the final one:
Was this another attempt at fraud, raffling the house whilst claiming that it was mortgage/debt-free when it very clearly wasn't?
I don't think so. My understanding is the whole idea of the raffle was to sell enough books that equalled or exceeded the value of the house and debts. Thereby, had it raised that amount, they could have paid off the mortgage and the debt, leaving a house free of all charges to give to the winner. The caveat is we can't know if they would have simply taken the money and done a runner had it been a success, leaving the house to be repossessed and no prize winner announced. They were clearly very desperate to think it was ever worth attempting.