Sunday, 17 January 2010

Mortgage Fraud Booming Like Never Before

BDO, has come up with some frightening figures on mortgage fraud, against a backdrop of soaring UK losses to fraud in 2009 (over £2 billion) across all sectors. It predicts worse to come.

In 2009, mortgage fraud accounted for 18% of all reported fraud and 27% of fraud in the UK finance and insurance sector.

Simon Bevan of BDO commented rather frankly: “It may have become more difficult for the person on the street to secure a mortgage in the UK, but the mortgage fraud industry is booming!”

Mortgage fraud often works through a large loan being taken out on an overvalued property with a corrupt buyer, valuer and/or conveyancing lawyer working in collusion.

The same group will then apply the scam to a portfolio of properties, meaning that the fraud can escalate to large amount.

BDO warns of “a tidal wave” of fraudulent borrowing that has only just beginning to appear, particularly through the use of over-valued properties as security for mortgages .

Worryingly, he suggests many of these frauds are yet to be recognised by the banks, which still have them classified as non-performing loans.

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