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Mortgage fraud – Green Card |
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The Law Society’s guidance on property fraud (its Green Card) was
issued as a consequence of the property crisis of the early 1990s. But,
the guidance still holds good. The starting point, of course, is that if
there has been a mortgage fraud then normally a solicitor will have been
involved. It is for solicitors to take steps to minimise the risks of being
involved or implicated in such a fraud.
The steps to take are well known: verify the identity and bona fides of
clients you do not know; verify the identity and bona fides of law firms
you do not know; question unusual instructions; discuss any concerns
with the client; check that the true price is shown on all documents;
report all ‘allowances’ and ‘incentives’ to the lender (if you act for the lender); do not witness pre-signed documentation; verify and cross-check
signatures.
One particular point to consider is making a company search if the seller is
a private company (or if the seller recently bought from a private company)
and you have reason to think that transaction may not have been at proper
arm’s length terms. In that situation consider making a search in the
Companies Register to check the names and addresses of the officers and
shareholders to see if there is any link between the seller and the buyer. © Practical Lawyer
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September 2007 |
