5 ms·

Im amazed they found a bank who would provide a mortgage against a property that was part of a legal dispute over ownership.

• andi999 5y ago
  How would a bank know?
  • rkangel 5y ago
    Legal due diligence? When I bought a house, all sorts of legal checks were required before I was allowed a mortgage. That seems like it would be standard practice.
    • andi999 5y ago
      Did they check apart from the deed if somebody litigates? I mean is this info even public?
    • noduerme 5y ago
      You'd think you couldn't even buy a car these days without knowing every accident it was ever in. Surprisingly, you can...
  • colonwqbang 5y ago
    I would assume that the bank checks these things as part of a checklist before granting a loan?
  • amalcon 5y ago
    In the US anyway, most banks will require the buyer to purchase something called "title insurance" -- which is basically insurance against unknown claims against the property. That insurer will generally look into things at least a little bit. Obviously it could be different in the Czech Republic.
  • Cthulhu_ 5y ago
    They wouldn't since the property deed was transferred; as long as a court doesn't rule that the transfer was illegal because of forged signatures, the bank won't / shouldn't do anything - what if the accusation is baseless. If a court does rule that the transfer was fraudulent, the bank can cancel the mortgage and demand immediate repayment. Of course, once it's time for a criminal to pay up, both they and the money mysteriously vanishes. TL;DR, identity verification should be improved. Signatures are not working.
    • remus 5y ago
      > They wouldn't since the property deed was transferred; as long as a court doesn't rule that the transfer was illegal because of forged signatures, the bank won't / shouldn't do anything - what if the accusation is baseless. The bank isn't under any obligation to give you a mortgage. From their point of view they're lending you a big wedge of cash with the property as collateral, so they should be trying to satisfy themselves that the collateral is enough to cover the loan in case you default. If there's a non-negligible chance that the person they're lending the money to doesn't actually own the property (e.g. they're tied up in a legal dispute over ownership) then the bank has no collateral and is taking on a big risk. > If a court does rule that the transfer was fraudulent, the bank can cancel the mortgage and demand immediate repayment. What if the person doesn't have any means to pay back the mortgage? The bank has then just made a chunky loss. This is why the bank will typically do background checks on the property to establish ownership, condition of the property, environmental risks etc. (though this doesn't seem to have happened here, or the checks weren't overly thorough).
      • andi999 5y ago
        I wouldn't be surprised if some jurisdiction still allow the banks to use the property as a collateral even if the 'real' owner didn't agree.
      • lr1970 5y ago
        In the USA a title company that validates the ownership provides a title insurance for exactly this case. If the true owner of the house is determined (typically in court) not to be the one the title company claims, then the title insurance pays the damages to the injured party. Or at least this is the theory.
  • xyzzy21 5y ago
    Title Companies provide this information in the USA. I'd assume someone like that existed there as well.