Reading that the former English Defence League leader Tommy Robinson was last week jailed for 18 months for mortgage fraud got me thinking that it’s been a while since I have read a decent mortgage fraud story.
After the last recession, mortgage lenders took a long hard look at themselves and started to focus on the quality of their lending as opposed to the quantity. For the first time ever, lenders started to talk to each other, and share information about solicitors / brokers / estate agents / surveyors in fact anyone involved in the housing transaction, whom they believed may be involved in mortgage fraud.
Lenders imposed additional checks and set up specialist units to double check anything which looked remotely unusual or untoward. Suddenly when we called for updates, lenders were telling us “It’s gone to Head Office for audit” or “It’s with the Credit Risk Team.” Savvy brokers increased their firm’s fraud checks and made sure the mortgages they submitted were squeaky clean.
The clamp down took some brokers by surprise, as they were struck off lenders panels and black-balled by others. Banks started to press charges as opposed to quietly refusing future business and for a period of time the industry papers were full of tales of Mortgage Brokers being shut down and in some cases sent to prison.
One bank executive told me that their mortgage fraud had decreased from over £100m to less than £4m in 2 years. Their credit risk team are hailed as heroes and with such fantastic results have pretty much a free hand in deciding who stays and who goes. They also get to act with an air of mystery, striking individuals and firms off without giving a reason, to avoid anyone “tipping off” anyone else, which is another Money Laundering Offence.
Pretty soon these banning orders were extended to brokers who provide “poor quality” business as well as fraudulent business, as lenders found out that accepting only “quality” business meant their borrowers were less likely to fall into arrears.
Clearly the reason this particular story even made the BBC was Mr Robinson’s “celebrity” status rather than the ingenuity of the crime. The story in fact focused more on the terrible time he may receive have in prison from the various groups he has upset in the past than the fraud itself.
If anything this particular fraud was a bit on the boring side, £160,000 obtained by a dodgy mortgage broker with a couple of fake payslips. Clearly Credit Risk are still on top of their game!
To speak to an independent mortgage adviser, contact us or call 01628 507477.
Recent posts
Pros and Cons of Equity Release
2 days ago
Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.
Your House Viewing Checklist
3 days ago
It’s important to ask questions about the property you are interested in before taking that step to make an offer. A little probing can make all the difference between buying your dream house or something that requires a lot of work.
Half of over 60s predicted to benefit from accessing housing wealth through Equity Release
6 days ago
There are millions of homeowners over the age of 60 who are likely to release money from their homes to pay for their lifestyle during retirement giving those who are 'asset rich but cash poor' a way to live out their retirement the way they wish.
Average Age of the First Time Buyer in the UK
13 days ago
The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.
Delayed Start Mortgage from Skipton
15 days ago
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
Gardening Tips for Beginners
20 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
The Family-Backed Mortgage from NatWest
23 days ago
High street lender, NatWest, have launched a new product to help first-time buyers purchase a property with assistance from a family member or friend to get them on the property ladder sooner.
The Impact of Klarna on Mortgage Applications
24 days ago
‘Buy Now, Pay Later’ (BNPL) schemes, such as ‘Klarna’ are short-term loans that allow shoppers to make a purchase, but delay paying for it for an agreed amount of time.
Klarna is one of the most popular BNPL services with 18 million customers in the UK alone, and offers interest-free payment options which is appealing to shoppers. However, does it affect a mortgage application?
More information
Trusted by
