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Developments in Mortgage Fraud

Often in the context of estate matters issues arise around real estate because it is often one of the largest assets comprising an estate.   A recent decision in British Columbia is a case in point.

Last week the BC Court of Appeal overturned a lower Court decision that found a defrauded financial institution was to be reimbursed by the unsuspecting widow whose home had been fraudulently mortgaged. 
A direct link to the BC Court of Appeal decision is helpful. The citation is Re Oehlerking Estate, 2009 BCCA 138.

This case is especially relevant to estate law in that the widow attempted to transfer the property, held in the name of her deceased husband, to her own name in 2006 and only then realized a fraud had occurred whereby a mortgage had been taken out on the property after it was transferred to someone else. The lower Court decided the property should be returned to the widow but she was liable for the mortgage. The Court of Appeal did not agree.

There are significant issues at stake, not least of which is the increased risk to financial institutions which may lead to an appeal to the Supreme Court.  Similar cases have occurred in Ontario.

A web search on real estate fraud led me to a Criminal Intelligence Service Canada assessment of mortgage fraud, prepared in 2007.  Further, the Ontario government provides tips on its website to protect against real estate fraud.

Estate Trustees ought to be vigilant regarding mortgage and real estate fraud especially because identity theft often occurs after a recent death. 

Thank you for reading.