UK mortgage fraud in the hundreds of millions

| November 28, 2008 | 0 Comments
UK mortgage fraud in the hundreds of millions

A new report, entitled Fighting Mortgage Fraud Together, suggests that mortgage fraud losses in the UK run to hundreds of millions of pounds.

The study, published earlier this week, has been completed by the National Fraud Strategic Authority (NFSA) after consultations with the Council of Mortgage Lenders and other industry bodies.

According to the report, identifying over-valued properties is difficult during a housing market boom, regardless of whether the over-valuation is down error, negligence or fraud.

However, it is evident that criminals have taken advantage of mortgage deals, such as those once offered by Northern Rock, which allowed loan-to-value ratios of up to 125% and that loans of this nature have allowed criminals to maximise profit at relatively low risk.

The NFSA wants to see the fraud risks in mortgage products and processes ironed out and for firms to put in place preventative safeguards and controls to make mortgage fraud easier to spot and stop.

The authority’s interim chief executive, Sandra Quinn, comments that the challenge is to make sure that when the UK’s mortgage market improves, fraud prevention needs can be met in a way that does not harm the effectiveness of the sector.

The recently established NFSA is responsible for critically assessing the UK’s response to fraud, working across the public, private and voluntary sectors to develop and deliver the first pan-economic national fraud strategy.

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