ARTICLE · 29 AUGUST 2012

Lender recovers from mortgage originator who did not properly check borrower's ID

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A lender successfully sued its mortgage originator who did not follow proper procedures when checking a borrower's ID.

AustraliaFinance and Banking

Ross Rydge

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Focus: Perpetual Trustee Company Ltd v CTC Group Pty Ltd [2012] NSWCA 252
Services: Financial Services, Disputes & Litigation
Industry Focus: Financial Services

In Perpetual Trustee Company Ltd v CTC Group Pty Ltd [2012] NSWCA 252, a lender has successfully sued its mortgage originator for monies not recoverable from the borrower on the basis that the mortgage originator did not follow proper procedures when checking the identity of the borrower.

The case

In August 2004, the mortgage originator (CTC) submitted to Resimac Limited, as manager of a lender (Perpetual), an application for a secured loan from Perpetual to Mr David El-Bayeh. The application attached documents signed by CTC verifying the identity of the applicant. The loan was subsequently advanced to Mr El-Bayeh upon the security of a mortgage over his property.

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