Law Society acts on mortgage fraud

| March 10, 2008 | 0 Comments

The Law Society is the latest organisation to announce its intention to tackle mortgage fraud, and will be issuing new guidance to solicitors to raise awareness of fraudulent applications.

The Financial Services Authority (FSA) is already working with the police to stamp out the activity, which involves both individuals and organised gangs.

UK mortgage fraud losses are estimated at £700 million a year and the figure is rising.

Criminals have been known to obtain false valuations that back loans of much higher value than the property mortgaged.

In other cases, lenders have been defrauded by bogus applicants who fail to make any repayments.

Last November, the Land Registry removed all scanned mortgage documents from its website because of concerns they may have been used by fraudsters and from March of this year, it has introduced identity checks to cover situations where parties to transactions are not legally represented.

The evidence of identity will be required when an application is made to register a transfer, lease or mortgage, and also for the discharge of a mortgage.

According to the Association of Chief Police Officers (Acpo), nearly half the reported cases of mortgage fraud are in the London area and the crime is generally committed by men in their mid to late 30s.

Last week, Acpo reported that property sales were also being used to launder money made from drugs, people trafficking and prostitution.

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