Types Of Uk Mortgage Fraud

Types Of UK Mortgage Fraud
At one point or​ another most people in​ the​ UK have heard the​ term mortgage fraud before .​
While most people may consider mortgage fraud to​ be the​ domain of​ professional con artists and hardened criminals,​ this is​ not necessarily the​ case.
Mortgage fraud encompasses a​ wide range of​ activities and a​ growing number of​ otherwise law abiding UK citizens are committing the​ crime at​ least once in​ their lifetime without being aware of​ it.
Below is​ a​ list of​ several activities which are considered mortgage fraud in​ the​ UK.
False Information on​ Mortgage Applications
Most mortgage applicants in​ the​ UK are likely to​ only ever apply for a​ mortgage on​ their own home .​
An individual who fits into this category will probably remortgage or​ move home at​ least once during their lifetime and will therefore apply for residential mortgages on​ several different occasions.
For this type of​ borrower there is​ a​ limited number of​ ways they can purposely or​ inadvertently commit mortgage fraud .​
These methods include exaggerating income and providing false details on​ other parts of​ the​ application form.
The most likely of​ the​ above activities this type of​ borrower will undertake is​ exaggerating their income on​ the​ mortgage application form .​
This is​ usually done to​ increase the​ amount they are entitled to​ borrow .​
While this may seem harmless if​ the​ borrower believes they can meet their monthly mortgage repayments and therefore avoid defaulting on​ their home loan,​ it​ is​ still considered mortgage fraud.
Additionally,​ providing false information to​ the​ lender on​ any other part of​ the​ mortgage application form will also be considered mortgage fraud .​
This includes,​ but is​ not limited to,​ personal information such as​ their name and address and marital status,​ and historical information such as​ their previous addresses.
False Documents
Providing false documents to​ mortgage lenders is​ fraud .​
This type of​ mortgage fraud has become more common in​ recent years and usually involves submitting false documents as​ evidence of​ income or​ identification .​
Such documents are widely available through a​ growing number of​ suppliers who advertise their businesses on​ the​ internet.
The quality of​ false documents has improved considerably in​ recent times which has led an​ increasing number of​ people to​ attempt to​ pass them off as​ real .​
Providing a​ UK mortgage lender with false documentation is​ a​ serious form of​ mortgage fraud and a​ criminal offense.
Undisclosed Transactions
It is​ also fraudulent to​ withhold information from lenders related to​ property transactions .​
For example,​ UK mortgage lenders expect to​ be told if​ there is​ a​ gifted deposit,​ discount,​ cash back or​ other incentive offered by the​ seller to​ the​ buyer of​ a​ property.
All of​ these things can be regarded as​ a​ reduction of​ the​ property’s value .​
UK mortgage lenders will want to​ know the​ true market value of​ the​ property being transacted as​ they will be securing a​ mortgage on​ it.
It is​ therefore necessary to​ inform the​ lender of​ all details involved in​ property transactions .​
Withholding relevant information can be regarded as​ mortgage fraud.
Exaggerated Valuations
Finally,​ a​ new and highly sophisticated type of​ mortgage fraud has become wide spread in​ recent years .​
The scam involves property professionals such as​ mortgage brokers,​ surveyors,​ and solicitors working together to​ obtain mortgages on​ properties that are overvalued.
For example,​ if​ the​ fraudsters negotiate to​ buy a​ property for £200,​000 the​ surveyor will value the​ property at​ £250,​000 and they broker will arrange for a​ mortgage to​ be secured against the​ property to​ that value .​
The solicitor will perform the​ conveyancing on​ the​ property and when the​ mortgage funds are obtained from the​ lender the​ vendor will be paid £200,​000 and the​ fraudsters will keep the​ additional £50,​000.
This scam is​ highly sophisticated and involves several partners working together and is​ considered to​ be mortgage fraud by the​ UK authorities.

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