Under section 56C of the NSW Real Property Act which has not yet commenced, a mortgagee will be required to take reasonable steps to confirm the identity of the mortgagor.
A draft Regulation has been prepared that will require a mortgagee to:
- Collect and record the full name, residential address and date of birth of the mortgagor;
- Verify the information about the mortgagor from an original or certified copy of a photographic identification document, or from two original or certified copies of secondary identification documents;
- Ensure that the information and the evidence used to verify the identity of the mortgagor matches, and that none of the identification documents are altered in any way.
The Regulation also provides prescribed steps to be taken by the mortgagee if the mortgagor is a company, or if the mortgage was executed under a power of attorney.
A mortgagee that does not comply with section 56C of the Act may lose their registered interest if the mortgage was executed as a result of fraud.
The proposed Regulation is anticipated to commence operation on 1 March 2011.