Couple discover home they bought at auction is not actually theirs

An Australian couple have been left “living in fear” as they face the prospect of losing their home of five years due to a legal issue entirely out of their control. Jess and Jackie Morecroft have been told to vacate their Mermaid Beach home more than half a decade after buying and settling in the property, as a result of a prior case of mortgage fraud.

The former owner, Ms Issa, 83, who suffers from Alzheimers and is being represented by her daughter in court, claims that a relative forged her signature to open up a mortgage, which ultimately resulted in her defaulting on the loan and forcing the house to be put up for sale during a mortgage auction.


The Mermaid Beach home has more than doubled in value since it was unknowingly but illegitimately purchased by the Morecrofts.

Just five months after the couple bought the property, Ms Issa launched legal action to reclaim the house, reports the Mirror.

The house was sold at a mortgage auction, which is when a property is listed for sale because the owner defaults on their mortgage.

But the Supreme Court found in February 2023 that Ms Issa was still the rightful owner after concluding that the mortgage for the house had been “procured by the fraud of another person”.

The court heard a relative of Ms Issa’s had applied for a loan, forged her signature to put the house as a guarantee before then defaulting. When the lenders seized the house, Ms Issa lodged a caveat, which is a claim with the Land Titles office intended to warn the public there is a legal interest in the property.

Negotiations between the company that lent the money, described in court documents as a “lender of last resort”, and Ms Issa led to the caveat being withdrawn in exchange for £21,000 ($40,000).

The Morecrofts, unaware of any of this, then settled the contract on the property on June 1, 2018 and went to transfer the title to their name.

But they were unable to do so because a second caveat was placed by Ms Issa alleging the house had been “fraudulently mortgaged”. She also lodged a police report about the alleged fraud, and since then there has been a legal battle over the house lasting five years.

The court found the lenders were “wholly inadequate” in their efforts to verify whether or not Ms Issa had agreed to her house being put up as security.

“I guess it’s just shown us, you can buy a house at auction, you can settle on that house … you can pay for that house and you still might not get that house,” Mr Morecroft told the ABC.

His wife said she was “living in fear” because of the stress of losing the property which had been their home for five years.

The court found that while the Morecrofts did not have a legal claim on the house they were entitled to recover its current value, £1.4 million ($2.7million), from the lenders who wrongly sold it.

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The couple has already spent £161,000 ($300,000) in legal fees and were concerned pursuing more legal action to reclaim their money could cost hundreds of thousands of dollars more.

But at the latest hearing on Friday, the court said the Queensland government should be liable for compensation because the Morecrofts were victims of a fraudulent sale.

The government can appeal the decision but the Morecrofts said on Friday it was still a “huge relief”.

“It’s now a clear instruction for the state to pay us compensation and we just hope they accept the umpire’s decision,” Mr Morecroft said.

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