by Mark Johnston
Mortgage Fraud on the Rise Again.
Many industry experts are of the opinion that mortgage fraud will continue to rise throughout 2013 and in to 2014. This rise they believe will be mostly driven by the ongoing squeeze on housing benefits and also of course low household incomes.
With the tougher new rules on UK mortgage lending and criteria, where lenders will have to put a borrowers ability to repay a mortgage under greater scrutiny, which are set to come in to force by 2014 it is no wonder that Experian, a credit reference agency, has predicted that a total of 43 out of every 10,000 mortgage applications will be identified as fraudulent by the end of 2013.
If this figure is true then it would therefore mark a 13 per cent rise on the 2012 figures.
This increase in attempted mortgage fraud would also bring the number of people fraudulently trying to obtain home loans to the highest level since records began back in 2007.
While figures show that the total rate of fraud on financial products has ultimately fallen with in the last few years, they do also however show that in certain areas such as mortgage fraud, there have been big increases.
The rate of detected mortgage fraud rose for the sixth consecutive year in 2012.
It seems then that according to recently published reports increasing numbers of would be home buyers are falsifying mortgage applications in order to buy their ‘dream’ homes.
A leading credit rating firm’s recent data revealed that in 2012 mortgage application fraud rose by around 9 per cent from figures in 2011.
This particular data shows that 38 in every 10,000 mortgage applications were fraudulent, this was up from 35 per 10,000 recorded in 2011 and significantly above the 18 per 10,000 seen back in 2007.
Analysis of recent mortgage fraud has revealed that almost 9 out of 10 or a whopping 89 per cent of fraudulent mortgage applications were down to people falsifying their personal circumstances such as job history, employment status and financial circumstances.
However, according to another recent report the most common false statements applicants made were in an attempt to hide poor credit histories.
Some experts have suggested that application fraud is it seems is driven by ‘non professional’ fraudsters and therefore those most likely to submit a fraudulent mortgage application would be middle aged skilled working class individuals.
Nick Mothershaw, director of identity and fraud at Experian, adds “mortgages continue to come under pressure from fraudsters keen to get their hands on cash. It is therefore vital that banks, the financial services sector, online retailers and even local authorities maintain their vigilance and accurately assess the likelihood of fraud to ensure they are building trusted relationships with legitimate customers”.
In conclusion increased fraud levels in this specific financial area does mean that it has never been more important to ensure that applications for new credit are analysed for signs of fraudulent activity.
Story link - Mortgage Fraud on the Rise Again.
Related stories to : Mortgage Fraud on the Rise Again.