They wouldn't since the property deed was transferred; as long as a court doesn't rule that the transfer was illegal because of forged signatures, the bank won't / shouldn't do anything - what if the accusation is baseless. If a court does rule that the transfer was fraudulent, the bank can cancel the mortgage and demand immediate repayment.
Of course, once it's time for a criminal to pay up, both they and the money mysteriously vanishes.
TL;DR, identity verification should be improved. Signatures are not working.
> They wouldn't since the property deed was transferred; as long as a court doesn't rule that the transfer was illegal because of forged signatures, the bank won't / shouldn't do anything - what if the accusation is baseless.
The bank isn't under any obligation to give you a mortgage. From their point of view they're lending you a big wedge of cash with the property as collateral, so they should be trying to satisfy themselves that the collateral is enough to cover the loan in case you default. If there's a non-negligible chance that the person they're lending the money to doesn't actually own the property (e.g. they're tied up in a legal dispute over ownership) then the bank has no collateral and is taking on a big risk.
> If a court does rule that the transfer was fraudulent, the bank can cancel the mortgage and demand immediate repayment.
What if the person doesn't have any means to pay back the mortgage? The bank has then just made a chunky loss. This is why the bank will typically do background checks on the property to establish ownership, condition of the property, environmental risks etc. (though this doesn't seem to have happened here, or the checks weren't overly thorough).
In the USA a title company that validates the ownership provides a title insurance for exactly this case. If the true owner of the house is determined (typically in court) not to be the one the title company claims, then the title insurance pays the damages to the injured party. Or at least this is the theory.
In the US anyway, most banks will require the buyer to purchase something called "title insurance" -- which is basically insurance against unknown claims against the property. That insurer will generally look into things at least a little bit.
Obviously it could be different in the Czech Republic.