Property frauds are majorly done in the form of mortgage frauds. Mortgage frauds in India are very common now. It is to a degree where it’s started to become a problem. Committing a mortgage fraud in India is very simple. Let’s first understand what is a mortgage? So, a mortgage is a loan approved by a bank for housing purposes. A mortgage loan is very common in India . A lot of people apply for mortgage loans. Because it’s so prevalent, there are a lot of mortgage frauds that have been taking place over the past few years.
A man named Rajiv rathee forged property documents to mortgage the same property with six different banks cheating them of a whopping 7 crore. One of the major reasons for the regular occurrence of mortgage fraud is an equitable mortgage. An equitable mortgage is a simple way of getting a mortgage loan. But one of the major drawbacks of an equitable mortgage is that it doesn’t have any public records. So any charges that are mentioned in the equitable mortgage cannot be seen by the public or the bank, unlike a registered mortgage.
Equitable mortgage is a major issue and should be looked into and rectified as soon as possible. Overvaluation of the property also leads to mortgage fraud. It is very simple to present an overvalued sum of the property to get a higher amount of loans. The banks should take measures to cross-check the valuation of the property. There are legal remedies in place to ensure that the bank recovers from the loss because of fraud. But there should be proper measures in place so that the fraud doesn’t happen in the first place.
The first thing that a bank can do is educate its staff. The staff should be able to understand the red flags of mortgage fraud so that they can identify them when they see one. The lender should always check the identity of the person. He should make sure all his identity documents match and are original. The lender should make sure to take the consent of all the joint holders of a property. The lender should cross-check every document and important details. A bank should be able to identify if a property is overvalued to commit fraud. These are some of the ways by which a bank can ensure that a mortgage fraud doesn’t happen.