News: Recession Causes Mortgage Fraud Increase

Mon, 13 Jul 09

The Council of Mortgage Lenders has reported an increase in fraudulent mortgage applications.

The CML says that lenders have seen an escalation in practices such as exaggerating a salary, in a bid to secure the best of the scarce deals available and to get around lenders’ increasingly strict lending rules.

CML spokeswoman Sue Anderson told The Times: “This is to do with fewer mortgage products, tighter criteria and an increase in demand. Lenders have become a lot more vigilant.”

Abbey confirmed to the newspaper that examples of borrowers giving wrong salary details were on the increase.

Other examples of mortgage application fraud cited by the CML include failing to declare credit card balances or car loans, which would affect lenders’ affordability criteria.

Often such examples of fraud are detected by lenders through credit checks. Apacs, the payment industry organisation, told The Times that an increase in attempts to defraud lenders was to be expected during a recession.


By Joe Lepper


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