Mortgage Fraud Decision by Supreme Court of Canada Oct. 22 2009

The important question of who pays a fraudster's mortgage has been settled in B.C. Should the true owner have to pay, and then seek compensation? Should the lenders mortgage be struck from the land? Should the true owner and/or the lender get compensation from the assurance fund of the land title system?

On Oct. 22, 2009 the Supreme Court of Canada dismissed an application for leave to appeal ( http://www.scc-csc.gc.ca/case-dossier/cms-sgd/dock-regi-eng.aspx?cas=33193 ) from the B.C. Court of Appeal in the case of Oehlerking vs. Mullen, Get Acceptance and others. As a result the Court of Appeal decisions stands ( http://www.courts.gov.bc.ca/jdb-txt/CA/09/01/2009BCCA0138.htm ). The original Supreme Court of BC decisions can be found at http://www.courts.gov.bc.ca/jdb-txt/SC/08/16/2008BCSC1648.htm . The facts in this case are interesting reading and are set out in the decisions cited here.

This makes it clear that under current B.C. law, a owner who's title to land is taken by a fraudster will have title restored and that a mortgage taken by the fraudster will be removed from title. As a result the true owner will not have to make application to the Land Title and Survey Authority ( http://www.ltsa.ca/ ) for compensation from the Assurance Fund in order to a payout the mortgage lender. The lender will not have a claim against the Assurance fund.

This will resolve a number of pending cases where title has been restored to the true owner, but the fraudster's mortgage remains on title. The lenders have held off making claims against the innocent owners pending the resolution of this case. Now that this is decided the owners will once again have clear title to their properties.

See http://www.ltsa.ca/land-title/security-of-land-title for a statement by the LTSA on Title Security in British Columbia

See also http://www.cbc.ca/canada/british-columbia/story/2008/06/20/bc-title-scam.html

Ron Usher ( http://www.bellalliance.ca )
(604) 873-8723

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