Mortgage fraud in Australia - what can be done?
Imagine getting a phone call or email chasing repayments for a mortgage you never signed up for. For a number of unfortunate property owners, mortgage fraud in Australia actually does become a very real, confusing and terrifying problem.
So how can mortgage title fraud happen in the first place – and what can you do about it?
How could your identity be used to commit mortgage fraud?
Mortgage fraud can occur on the applicant side, where a mortgage applicant lies about their income or assets to secure a loan. But it can also happen if someone fraudulently uses your identity to apply for or secure a mortgage against your property. Here are a few examples that have actually happened in Australia:
- A wife forging her terminally ill husband’s signature on mortgage documents for their shared property.
- People fraudulently mortgaging their business associate’s, relative’s or spouse’s house as security for their own loan.
- An ex husband forging his ex wife’s signature to mortgage their previously shared home.
In many cases, the first that the property owner becomes aware that someone has lodged an interest on their title is when they receive word that there’s been a default on a mortgage they weren’t even aware of.
How mortgage fraud can affect property owners in Australia
Obviously, being held accountable for a loan you never agreed to is an unpleasant prospect.
The culprit could gain access to significant funds, while the unsuspecting victim could have a legal fight on their hands to prove they shouldn’t be held responsible for the mortgage. This can lead to months or even years of stress and worry for the property owner.
So what can be done in the case of mortgage fraud?
As the victim of mortgage fraud, a property owner may be able to have the fraudulent mortgage set aside with an application to the Supreme Court. But getting through this process could be an extremely stressful process on your own – and how would you even start to find the right legal team?
If you had a title insurance policy with First Title for your property, you could put in a claim at this point. We could assess the situation and if the claim is successful, can help you gain quality legal advice from a specialist law firm. Importantly, you would have access to expert guidance and support in what can be an overwhelming situation.
Good to know:
First Title’s title insurance also provides cover for a range of other property ownership risks: from encroaching structures to incorrect boundaries. Find out more about what title insurance is and how it could help protect your greatest asset.
Other ways to minimise and limit the risks of mortgage fraud
The good news is that lenders are required to take reasonable steps to verify the identity of people taking out a mortgage. Land owners can also choose to place a caveat on their property, which can help to protect their interests in the property and potentially prevent mortgage and title fraud.
Of course, there are the common prevention tips against identity theft like keeping personal information secure and using unique passwords, locking your mailbox, shredding unwanted paperwork, and maintaining virus and security software. These measures can also lower the risk of property title fraud and scams.
Interested in mortgage and title fraud protection? Get in touch
At First Title we help cover property owners for a range of risks. First Title’s title insurance cover does not expire for the entire length of time that you own your property and it has just a one-time premium, making the average title insurance cost very affordable for anyone looking for mortgage and title fraud protection.