My mother was incapacitated in the hospital dying of cancer. During the last days of her life my brother forged our mother's name on a mortgage. He also gave a fraudulent paper to my sister and I, and we unknowingly signed the mortgage without a notary present.
My sister and I immediately went to the bank the next day to inform them of the fraud. However the bank refused to rescind the loan. Not knowing that my mother was incapacitated in the hospital, the loan officer stated that my mother came to the bank and signed the papers.
My sister and I have signed papers from a doctor stating that she was unable to make decisions. We live in a small town and the bankers knew my mother personally. They knew that she did not come to the bank. My brother had a notary backdate on the mortgage papers for three days prior.
Is the bank guilty of negligence for letting the papers out? What should I do?
There's more trouble here than negligence by the bank. There appears to be bank fraud, the making of fraudulent statements, forgery ... the list goes on. Some of these problems are federal offenses, assuming the bank is federally insured.
You and your sister need to run, not walk, to a lawyer. You'll need to be willing to drag your brother into court, possibly along with others who may have knowingly participated in this fraud. You may need to involve the official representative for your mother's estate (if that happens to be your brother, your attorney may need to argue in probate court for his replacement as representative). The bank seems to have been negligent based on what you've told us; to get the bank to release its mortgage interest, you're going to have to play hardball with the others involved.
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There's more trouble here than negligence by the bank. There appears to be bank fraud, the making of fraudulent statements, forgery ... the list goes on. Some of these problems are federal offenses, assuming the bank is federally insured.