Names and locations have been changed to protect the innocent, as well as the not so innocent.

When your home is not your own

Our client, Maria Sudan, a doctor, had a small bungalow in addition to her primary residence. She had rented the bungalow in the past without incident. Sergei answered her ad offering the house for rent, agreed to the amount, and advised her that he, his wife and teenaged daughter would be living there. Maria agreed to rent the house to him, and received first and last month's rent in cash.

Every month, for three months, Sergei brought the rent to Maria's home. On the fourth month, Sergei never showed up. Maria went to the bungalow to collect, only to discover that Sergei had never moved in, and was nowhere to be found. The next day, Maria received a call from the police. Their hunt for a man named Gregory, for an unrelated mortgage fraud, had led them to the bungalow, since all his mail was addressed there. Maria did not recognize Gregory's name. The police had traced the property ownership to Gregory, and the ownership records showed he had purchased it from Maria.

To complicate matters, Gregory had obtained a mortgage of $325,000 against the house, had never made any payments, and now the house was under power of sale. Maria had to retain a lawyer to have title restored to her and to have the mortgage declared unenforceable.

We were engaged by Maria's lawyer to locate Gregory. This proved impossible, since his identity was completely fake. Also, we were asked to determine if the bank could have detected and prevented the fraudulent mortgage. We provided an expert opinion that, according to Canadian mortgage fraud standards, the bank's underwriter had overlooked many obvious "red flags" of mortgage fraud.





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