Israeli Homeowners Sue Banks and Land Registry Over Fake Mortgage Fraud in Netanya
A brother and sister living in Germany have filed a lawsuit at the Lod District Court alleging a serious fraud that led to their Netanya apartment being mortgaged to a non-bank lender through forged identity documents. The plaintiffs claim that a network of imposters stole their Israeli IDs about two years ago, used their photos to create fake identification, and fraudulently obtained a two million shekel mortgage loan against their property. They assert they were not in Israel at the time and had no involvement in the transactions.
The lawsuit targets several "gatekeepers," including Bank Leumi, Mizrahi-Tefahot Bank, and the Netanya Land Registry Office, accusing them of negligence for failing to prevent the scam and allowing the fraudulent mortgage registration. The plaintiffs argue that none of these entities conducted proper due diligence or face-to-face identity verification, which could have stopped the fraud. They demand the mortgage be declared void and seek compensation for non-material damages caused by the defendants' alleged systemic failures.
The mortgage was registered in March, completing the fraud, and the plaintiffs want the registration canceled. They also note another similar fraud case in Netanya involving property mortgaging to a company. The mortgage holder, Magen Afikim Ltd., denies the allegations, stating the case is in early legal stages and will present evidence in court. The Ministry of Justice emphasized that the Land Registry acted according to law, with no suspicion of forgery on its part, as the fraud occurred externally with forged documents. Phoenix Insurance, which sold a life insurance policy as part of the scam, said it is reviewing the case and will respond in court.
The plaintiffs are represented by attorney Michael Ben Tzvi. The case highlights concerns over identity theft and institutional oversight failures in Israel's mortgage and property registration processes.
