Your Money Haven

Mortgage fraud 'may be easier to uncover'

02 April 2008

Mortgage fraud may be easier to detect now that the stellar rise of the house prices has subsided, the Council of Mortgage Lenders (CML) has said.

A recent police report suggested that the practice was rampant and that 50 new cases would be opened next month, although the CML was careful to say that there is "no decent data" available on the extent of the crime.

Sue Anderson, head of member and external relations for the CML, dismissed the police report as having misleading numbers in it, but said the issue of fraud was on her group's radar.

"There are a lot of different initiatives underway at the moment to try to combat fraud and I think one of the reasons why that's happening is because we're at that point in the market where, where fraud is occurring, it's going to be that much more obvious because house price inflation is not masking it to the same degree that might happen in a rising and more active market," she said.

Mortgage fraud involves loan applicants lying to the bank or building society in order to obtain finance for a house.

The CML said that fraud could also include other points along the sale including brokers breaking the rules to obtain new business, or fraudulent valuations of property.