Loans: Lagos warns banks to beware of fake C of Os

Written by The Punch Saturday, 31 July 2010

The Lagos State Government has urged banks and other financial institutions to verify the authenticity of Certificates of Occupancy presented by loan seekers as part of their collaterals before approving such loans.

Permanent Secretary, Lands Bureau in the state, Mr Gbenga Ashafa, warned the banks to be wary of C of Os tendered by loan seekers, so they don‘t give their facilities to fraudsters.

Ashafa said the banks should carry out due diligence and take care before granting loans due to the increasing use of cloned C of Os as collateral by loan seekers.

He added that the Lands Bureau was worried about the way dubious and desperate loan seekers had been obtaining loans with fake land ownership documents, which financial institutions only discovered later after the loans had been granted.

Saturday Punch gathered that the state government agency had been inundated with requests for verification of C of Os, only to discover during the process that the title documents were not original.

In a release signed by the Public Relations Officer of the bureau, Mr Moshood Adebisi, the government said, ”The fraudsters have devised means of perpetrating such fraud through third Legal Mortgages which is executed without a guarantor having to appear in person.

”Financial institutions and banks are advised in their own interest to always ensure due diligence in investigating all title documents presented by parties and individuals who are not the direct owners.

”This is because the fraudsters usually present certificates of occupancy over landed properties purportedly owned by other parties or individuals as collateral.”

The permanent secretary also stated that sales or purchase of land and mortgage transactions without proper authentication of certificates of occupancy would henceforth not be entertained.

”Members of the public are once again reminded that the Lagos State Lands Registry should always be contacted for searches and verification to ascertain the authenticity of such C of Os,” Ashafa said, stressing that new e-Certificates of Occupancy would be officially launched soon to effectively tackle the fraudulent practices of the fraudsters.