Mortgage Fraud 'Could Total £17bn'

Mortgage Fraud

22.10.2008

Experts have claimed that there could be up to £17 billion of fraudulent loans on the books of the UK's mortgage lenders.

A boom in fraudulent applications over recent years has involved the purchase of as many as 60,000 properties.

Already-struggling lenders could be put under extra strain as a result of the problem, which is said to have been driven by an "explosion" in identity theft.

Sarah Wallace from law firm Irwin Mitchell said: "In April the City of London police force allocated 50 new investigators to deal with mortgage fraud. The FSA have recently taken regulatory enforcement action against increasing numbers of mortgage brokers for involvement in the submission of false mortgage applications. The FSA sanctions of prohibition order and fines are regulatory sanctions and are not criminal proceedings, whereas the City of London police fraud investigations could lead to criminal prosecution against borrowers and possibly mortgage brokers. Individuals or firms who are affected by mortgage fraud, either as a victim or a possible suspects, may need to obtain legal advice regarding the money laundering implications."