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Mortgage fraud has increased since last year says a finance firm (22 August 2012)

Date: 22/08/2012
Duncan Lewis, Legal News Solicitors, Mortgage fraud has increased since last year says a finance firm

A study by the finance firm Experian has said that 39 in every 10,000 mortgage applications made in the second quarter of the year were found to be fraudulent, an increase of almost a quarter when compared to the previous year.

The study said that more and more borrowers were lying about their finances to get a mortgage.

The 23 percent rise in mortgage fraud is being seen in the light of lenders having tightened their borrowing criteria which made it harder for prospective homeowner to get a loan.

Though there have been signs of increased competition to attract mortgage customers in recent weeks, most of those have been aimed at those with larger deposits.
James Jones, head of consumer affairs at Experian, said that the increase certainly reflected the fact that many households were lacking sufficient money and were increasingly resorting to ever more desperate measures.
Nearly a quarter of mortgage fraud was of people trying to inflate their incomes.
More than a million home owners saw their mortgage rates increase in May, with banks blaming the increased cost of funding a mortgage and concerns were raised that people will find it harder to switch to another deal due to lenders’ toughened criteria.
Experian said the majority of attempted mortgage frauds were due to people lying about their own circumstances. Quarter of those people was trying to hide a bad credit history and some gave misleading employment information.
The study also noted an increase in cases where people gave wrong information about the use of the property, such as saying they intended to live in it themselves when in reality they planned to rent it out.
Interest among landlords in the buy-to-let market has picked up as rents have soared due to a high numbers of tenants who are unable to get on the property ladder in the tough economy.
Nick Mothershaw, director of identity and fraud services at Experian, said that mortgages were being targeted continuously since last year with more misrepresentation of personal and employment and credit information
Meanwhile, attempted savings account fraud rates more than doubled, with 13 fraudulent applications in every 10,000 detected, up from six in every 10,000 a year ago.
The study said that third party identity fraudsters were responsible for the vast majority (88%) of attempted savings account frauds. It said this type of fraud is often perpetrated by criminals involved in money laundering often making it a platform from which they targeted more lucrative credit products.

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