Mortgage fraud threat as economy recovers
The full extent of UK mortgage fraud in the lead up to the credit crisis is probably as yet unknown and signs of economic recovery have prompted the National Fraud Authority (NFA) to remind lenders that they must continue to combat the crime.
According to the NFA, almost £144 billion was loaned in mortgages in 2009, representing an attractive target for criminals.
The body also estimates the annual value of UK mortgage fraud at £1 billion and warns that without continued cooperation, that figure could increase.
NFA chief executive officer, Bernard Herdan, explains: “In the economic downturn, there has been a reduction in the availability of products that were targets of fraud such as sub-prime, buy-to-let and self-certified mortgages.”
He adds: “The economic climate also has increased pressure on lenders to reduce costs, so there has been a greater emphasis on fraud prevention, detection and recovery of losses.”
His comments come alongside the publication of a new NFA report that urges stronger joint efforts between all those involved in fighting the crime and highlights the difficulties lenders and intermediaries sometimes have in identifying fake and falsified documents within the mortgage application process.
Welcoming the report, the Commissioner of the City of London Police, Mike Bowron, says: “In the last 18 months there has been a significant increase in the number of mortgage fraud investigations, some of which run into many millions of pounds and stretch across the UK.”
He adds: “Importantly, we have also achieved a significant rise in the number of arrests, charges and convictions.”