Claims Example

Fraudulent Mortgages (Insuring Agreement G)

A borrower obtains a loan secured by land jointly owned with his wife. After a year of making payments, the borrower falls behind and the bank files for foreclosure on the land. During the proceedings, it is proven that the wife did not “knowingly” sign the mortgage for the property and thought she was signing another unrelated document. The bank is precluded from foreclosing on the property.