Mortgage Fraud cases already exceeding 2008
I have to admit that even I was shocked to read about the rising number of mortgage fraud cases. I knew it was possible, but I was still surprised to read that 2009 has already surpassed figures released in 2008.
Handed out by the Financial services Authority, in the last 5 months they have handed out fines totalling £302,445 and have already banned 9 individuals/brokers from the mortgage industry.
How’s it possible?
The most common cause for this kind of fraud is when an applicants income is inflated – with or without their consent.
By exaggerating their income through the invention of bonuses, an extra job or forged payslips, applicants are able to receive a bigger mortgage, and brokers… a bigger commission.
Why is it getting worse?
With the lending market taking a big hit since the onset of the recession, the number of applicants who are actually successful in acquiring (and affording) a mortgage has dramatically reduced, and as a result more and more individuals are resorting to this kind of fraud.
Take the last couple of years: 2007 only 5 bans were handed out; 2008 29 bans with fines of £289,500 and 2009… fines are already exceeding £302,445. It is not a pretty picture.
Another growing phenomenon is false valuations on new build flats.
With developers and builders offering homeowners incentives of instant cash-backs, fitted kitchens and paid-for legal fees… if these are not reported it could result in properties being sold for more than they are worth whilst being paid for with over inflated mortgages.
Wendy xx
It’s not just mortgage fraud that is on the increase but also property fraud. If you want to protect your property against property fraud then there a number of actions you can take which may help. 1. If your property is unregistered then it is would wise to arrange for a conveyancing solicitor to register the property at the Land Registry as the deeds of your property would electronically stored with Land Registry. 2. A property owner could certainly consider adding a standard form restriction on their title register, particularly where their property is not subject to a mortgage (the existence of a mortgage and the usual accompanying restriction hopefully reduces the risk of fraud involving a mortgaged property). The aim of the restriction would be to prevent the Land Registry from registering a transfer of the property without a solicitor certifying that, for example, the transferor is indeed the registered proprietor. 3. If you are concerned that you are, or may become, the victim of property fraud, consider property fraud prevention by having more than one address for service. For example, you might want to have not just the property address, but also the address that you are now living at.