How identity fraud in mortgage transactions can affect mortgagees: recent legislative changes

Key Points:

Recent changes to legislation governing mortgages mean that mortgagees who fail to adequately verify the identity of mortgagors risk losing indefeasibility of their mortgages and being placed in the position of an unsecured creditor.

Identity fraud in mortgage transactions is a mischief that poses a potential problem to all landowners and mortgagees alike. Identity fraud can occur in a number of ways, such as through the fraudulent use of valid security documents (eg. Certificates of Title), as well as through the production of counterfeit documents which can be fraudulently used to obtain a mortgage.

Mortgagees should be aware of the potential financial repercussions if identity fraud in mortgage transactions occurs.