Mortgage fraud victim to test law
Woman appeals Superior Court ruling on real estate theft
New land-transfer rules meant mortgage was still valid
Excerpt from an article by Harold Levy - Toronto Star
A North York woman who lost the 100-year-old Victorian home she had been living in for 30 years to identity thieves says she is going to court for herself and other victims of mortgage fraud so the taxpayers don’t have to pay the tab.
Susan Lawrence discovered earlier this year that she was on the hook for a $300,000 mortgage the thieves secretly put on her property after forging her signature in order to acquire it.
Last month, a judge ruled that the property transfer - of which she had no knowledge - was invalid because it had been carried out fraudulently.
But Superior Court Judge Edward Belobaba reluctantly ruled that even though the mortgage was also fraudulent, he could not declare it invalid. His hands were tied because of a decision of the Ontario Court of Appeal released last November.
That decision provided that as long as the transaction was properly registered in Ontario’s Land Title system, the mortgage was valid in the eyes of the law - even if it later turned out to be tainted by fraud of which the owners, like Lawrence, were unaware.
Belobaba apologized to Lawrence, who is a widow, for not being able to declare the fraudulent mortgage void. He ruled that her only recourse was to apply to the Land Titles Assurance Fund, which uses public funds to compensate victims like Lawrence.
“I trust and expect that the Land Titles Assurance Fund will act quickly to provide Mrs. Lawrence with the compensation that she clearly requires and deserves,” he said.
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