Legal Question in Banking Law in Indiana

Bank Fraud

Dear Law Guru:

Without our knowledge my name and that of my grandparents as joint owners of real estate was forged on a $ 500 K commercial loan by my ex-spouse. He defaulted on the loan and the Bank was in process of foreclosure on the property. While my grandparents and I were unaware the real estate was secured as collateral through fraud, (the forgered signatures of myself and my grand-parents); we agreed to the sale of the property believing my ex-spouse (an attorney) had authority as co-owner of the property to obligate the property for a personal debt. Recently my ex-spouse was indicted for bank fraud on this matter. The problem is my granparents and I belive the bank should of protected our rights and breeched their fiduciary responsibility. We now know my ex-sposue submitted several forged documents in the commercial loan process to the same Bank Executive. Also, on the forged power of attorney my ex-spouse submitted to the Bank at the time of the commercial loan, the Bank was aware the power of attorney was not recorded at the time of the loan, but still released the funds. What safegaurds should the Bank have followed? Do my grandparents and I have any legal recourse with the Bank and the Notary ? H

Asked on 1/27/03, 5:09 pm

2 Answers from Attorneys

C. David DuMond Law Offices of David DuMond

Re: Bank Fraud

It sounds like you and the grandparents would be entitled to rescind the entire transaction. So if the property has not yet been sold, demand that the bank stop it. You must confer with an attorney, and soon. Contact your local bar association or the Association of Trial Lawyers of America for a referral. If the property has already been sold, then your attorney will joyfully sue the bank and compel it to pay an enormous pot of money by way of chastisement. Assuming you haven't omitted any important facts in the story Your attorney needs consumer protection litigation experience. Once the bank realizes that a fraud is behind the transaction, they can recover their loss on a bond claim (forgery). Move with alacrity.

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Answered on 1/27/03, 5:36 pm
John Bator Bator Redman & Shive

Re: Bank Fraud

Since your ex was indicted, you should advise the bank that the signatures were forged and they should release the fraudulent mortgage and cease all collection efforts (and clean up your credit report) They will require that you sign an affidavit of forgery and you will be asked to cooperate with the FBI in their investigation and the prosecution of your ex.

I strongly urge you to retain counsel immediately to get through the process, preferably someone who has a banking law background. I can be reached at 317-685-2426 to arrange for a free consultation.

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Answered on 1/28/03, 5:59 pm

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