by Mark Johnston
Increasing numbers of mortgage fraud.
Reports have shown that in recent weeks with the launch of the ‘funding for lending’ scheme there has been an increase in competition from most lenders to attract new mortgage customers. However, much of this competition has been aimed at those with larger deposits.
Lenders have also tightened their borrowing criteria, particularly for those with smaller or non existing deposits and this has made it much harder for some prospective home owners to get a loan.
The saying goes when the going gets tough, the tough get going, or they re supposed to. In reality, it seems that when the going gets tough, people play dirty.
In the light of all this it is therefore no wonder that a recent study showed that there has been a 23 per cent rise in mortgage fraud; it found that increasing numbers of potential home owners and even home owners are turning to lying about their finances in an attempt to secure a mortgage.
James Jones, head of consumer affairs at Experian, a finance firm, said “the increase certainly reflects the fact that many households are increasingly cash strapped and are resorting to ever more desperate measures”.
The finance firms also stated that 39 in every 10,000 mortgage applications made between April and June of this year were found to be fraudulent. This figure was up from 32 during the same period in 2011.
Some experts find these figures hard to believe as mortgage lenders checks are now so scrupulous and they require copies of everything, it makes it hard to believe that so many people can forge documents!
Fraud typically involves potential borrowers inflating their employment prospects or finances or not disclosing previous addresses in a bid to conceal an adverse credit history.
Unlike other cases of fraud, mortgage fraud is a first party crime, which means people deliberately misrepresent their own circumstances to increase their chances for obtaining a mortgage.
Research has also noted that there has been an increase in cases where people gave the wrong information about the use of the property, such as saying that they intended to live in it themselves when in reality they planned to rent it out.
Nick Mothershaw, director of identity and fraud services at Experian, said “over the course of the last year, we have seen mortgages continue to be targeted at a high rate”
Attempted savings account fraud rates has also more than doubled in the last year and this too can have an impact on the mortgage market as many fraudsters often try to use savings accounts as a platform from which they can target more lucrative credit products.
The National Fraud Authority (NFA) has estimated that the mortgage industry will loses at least £1 billion to fraud thoughout 2012.
Story link - Increasing Number of Mortgage Fraud.
Related stories to : Increasing Number of Mortgage Fraud.