With an estimated £1 billion per year of fraud out of an industry worth in the region of £144 billion, mortgages are a very attractive vehicle for obtaining money fraudulently. This is despite the Land Registry investing heavily in an anti-fraud programme.
Mortgage fraud does not just mean the odd lie on an application form about your income and expenditure. It also covers a whole range of criminal activity as well as professional crime and negligence.
The National Fraud Office (NFA) has produced its second update report entitled 'Working together to Stop Mortgage Fraud'. The NFA was formed as a direct result of the government's 2006 Fraud Review. The review concluded that whilst all the agencies and organisations existed to tackle fraud, a greater level of co-operation was required. With a total fraud 'industry' of around £30 billion per year (£621 for every adult) the need for a new body was recognised and the NFA was quickly established. It is now 'the hub for a concerted campaign against fraud'.
Tackling the £1 billion in mortgage fraud will go a long way towards addressing the overall problem.
Some people are tempted to obtain false payslips or other documentation to get that mortgage, which will buy them that dream home. But there are also those that want the mortgage funds themselves. The following is an example case cited in the NFA report sourced from the Land Registry:
'A family who recently inherited their mother's home after she passed away, nearly lost it to fraudsters who attempted to sell it without their knowledge. A gang spotted the house on the market when it was put up for sale with a firm of estate agents. One woman posed as a buyer and asked a firm of unwitting solicitors to represent her. Claiming it was a private sale, she had her solicitors deal directly with the sellers' solicitors – a firm which, in fact, had no dealings with the owners. The 'buyer' then obtained a mortgage to finance the 'purchase'. The family only became aware at the final stages of the transaction and was able to stop it. However, not before the fraudsters were able to disappear with the mortgage money they had already secured.'
But there are also professionals involved in mortgage fraud. – Go to Page 2