A mortgagee's interest in the property is protected unless it has notice of a previous fraud affecting the title of its grantor. The mortgagee is under a duty to make an inquiry where it is aware of facts 'that would lead a reasonable, prudent lender to make inquiries of the circumstances of the transaction at issue. A mortgagee who fails to make such an inquiry is not a bona fide encumbrancer for value. The question of what constitutes fair consideration is generally one of fact, to be determined under the circumstances of the particular case.
Baldeo v. HSBC Bank USA, NA, NY Slip Op 03805 (2d Dep't July 17, 2024)
