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Identity Fraud
A Lender purchased a First Title commercial lenders policy (Mortgage Lenders Policy) in respect of a commercial loan transaction. Providing a commercial strata unit as security, the borrower was seeking $1.13 million.
In accordance with the First Title Insured Lender's procedures, the borrower provided appropriate credit documents and original identification documents which were sighted by a law firm. The law firm confirmed the borrower's identity and witnessed the loan documents. The loan funds were disbursed into an account in the name of the borrower.
Three months after settlement took place, the First Title Insured Lender was contacted by the owner's solicitors, informing it that the owner was surprised to discover that there was a mortgage over their title. The owner is alleging that an identity fraud has taken place.
Whilst this matter is still being investigated, the owner's solicitors have foreshadowed an application to have the First Title Insured Lender's mortgage set aside.
Under the Mortgage Lenders Policy, First Title will defend any challenge to the mortgage and meet all legal defence costs.
