What does a lawyer do when there are signs of fraud in a mortgage transaction?
Ontario, Canada
The following excerpt is from Law Society of Upper Canada v. Abrahams, 2015 ONLSTH 107 (CanLII):
What a lawyer must do when there are signs of fraud varies depending upon the client's role in the transaction. Lawyers who act for purchasers in residential real estate transactions involving a mortgage often also act for the lender. Faced with red flags of fraud or other facts that may be material to the lender, the lender's lawyer must make appropriate inquiries and draw them to the attention of the lender. If not acting for the lender, the lawyer must still make appropriate inquiries and refuse to continue to act for the client if there is not a satisfactory explanation for indications of fraud: see Law Society of Upper Canada v. Mohammedally, 2014 ONLSAP 5 (CanLII).
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