According to a report in the Coventry Observer, Labour politician Phil Townshend used a buy-to-let mortgage and a gifted deposit from the elderly lady to purchase the home – a process she said she knew nothing about.
Despite stating on the application that he would not rent it to a family member, he continued to allow the relative to live in the property after he took ownership in 2011.
Godiva Mortgages, part of the Coventry Building Society, which completed the mortgage, sought to repossess the property, however it stopped this once the fraud allegations were raised.
As a result of a long-running legal challenge initiated before his death, the home has now been returned to the relative’s ownership, where she continues to live.
West Midlands Police had been conducting a fraud investigation into the transaction but this concluded when Townshend died in October 2015.
Townshend, who was also a solicitor, had been granted power of attorney over the elderly lady’s finances but this was later revoked before he died.
According to the Coventry Observer, the mortgage from Godiva Mortgages was worth £200,000, with a further £125,000 used as a gifted deposit from the elderly relative.
The paper found that half the £200,000 was paid directly to the family member with £30,000 then immediately paid back to Townshend.
Townshend used his law firm to act for his relative, while he was represented by Abdul Khan, a solicitor at another now-liquidated firm, who has since become deputy leader of Coventry council.
Townshend and Khan’s signatures were both on the mortgage deed as witnesses.
After his death, Townshend’s estate was found to be insolvent with the law firm owing around £600,000. The paper noted that liquidation proceedings were still ongoing.
Mortgage Solutions has contacted Godiva Mortgages for comment.