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by Cthulhu_
1796 days ago
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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. |
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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).