mortgage discharge fraud Jamaica

A fraudulent mortgage discharge is one of the more technically complex forms of property fraud in Jamaica. It involves removing a registered mortgage from a land title through the submission of a forged or fabricated discharge instrument, typically in order to sell or re-mortgage the property as if it were unencumbered. Lenders who discover that their security has been fraudulently discharged face the complex task of reinstating the mortgage while the property may have already been transferred to a third party.

While mortgagees in Jamaica have a legal right to repossess and sell mortgaged property following a borrower’s default, that right must be exercised in accordance with the mortgage instrument and the applicable law. Cases of wrongful repossession, intimidation of occupants, premature possession before proper default, and under-value sales that destroy the borrower’s equity have all been reported.

Mortgages and charges over property in Jamaica only bind third parties when they are registered on the title at the NLA. Informal lending arrangements secured against property, undischarged mortgages concealed from buyers, and deliberately unregistered charges have all been used to defraud buyers who acquire properties without knowing that the seller has given security over them to a third party.