Mortgage Fraud

Below is a list of several types of mortgage loan frauds:

1. False Information on Mortgage Applications

Most mortgage applicants in the UK are likely to only ever apply for a mortgage on their own home. An individual who fits into this category will probably re-mortgage or move home at least once during their lifetime and will, therefore, apply for residential mortgages on several different occasions.

The most likely of the above activities that this type of borrower will undertake is exaggerating their income on the mortgage application form. In 2019, the UK’s leading fraud prevention service – Cifas – reported that 13% of British adults believe it is ‘reasonable’ to exaggerate income on a mortgage application.

Individuals typically overstate their income to increase the amount they are entitled to borrow. While this may seem harmless if the borrower believes they can meet their monthly mortgage repayments, and therefore avoid defaulting on their home loan, it is still considered mortgage fraud.

Additionally, providing false information to the lender on any other part of the mortgage application form will also be considered mortgage fraud.

2. False Documents

Providing false documents, such as false or altered bank statements, to mortgage lenders is another example within mortgage fraud cases. This type of mortgage fraud has become more common in recent years and usually involves submitting false documents as evidence of income or identification. Such documents are widely available through a growing number of suppliers who advertise their businesses on the internet.

Providing a UK mortgage lender with false documentation is a serious form of mortgage fraud and a criminal offence.

3. Undisclosed Transactions

According to mortgage fraud law, it is also fraudulent to withhold information from lenders related to property transactions.

For example, UK mortgage lenders expect to be told if there is a gifted deposit, discount, cashback or other incentive offered by the seller to the buyer of a property. All of these things can be regarded as a reduction in the property’s value.

UK mortgage lenders will want to know the true market value of the property being transacted as they will be securing a mortgage on it. It is, therefore, necessary to inform the lender of all details involved in property transactions. Withholding relevant information can be regarded as mortgage fraud.

4. Exaggerated Valuations

Finally, a new and highly sophisticated type of mortgage fraud has become widespread in recent years. The scam involves property professionals working together to obtain mortgages on properties that are overvalued.

Consequences of Mortgage Loan Frauds

• Mortgage fraud cases involving exaggerated income can result in a failure to repay the debt in the future, and having your property repossessed.
• Blacklisting against future purchases.
• Police investigation and potential prosecution.
• If you receive benefits, overstating your income or the value of your property can affect your benefit payments.
• Being served a fine or prison sentence, or both, and having a criminal record.

Mortgage fraud cases can result in serious consequences for both the buyer and the seller. Many of these repercussions have long-term, damaging effects. So, it’s vital that you seek out a specialist mortgage fraud lawyer for expert advice.

Mortgage Fraud Investigation Process

If you are suspected of mortgage fraud, you will be placed under investigation by your lender or the police. They may interview you, obtain a search warrant and obtain access to your personal records, including phone records, email records and social media records. If you are found guilty, you will be required to repay the lender. But, if you’re unable to do so, your property may be repossessed. Depending on the severity of your mortgage fraud and its ramifications, you may be handed a suspended sentence or fine.

It’s vital that you seek a mortgage fraud lawyer as early as possible, especially before attending any mortgage fraud interviews. Your mortgage fraud lawyer should accompany you during any interview and help you navigate the complexities of the investigation process for the best chance of success.

What is Mortgage Broker Fraud?

Mortgage broker fraud involves cases where mortgage brokers fail to recognise their client’s fraudulent activity or collude with their clients to enable them to commit mortgage fraud.

If you a mortgage broker whose under investigation for mortgage broker fraud, it’s important to seek expert mortgage fraud lawyer advice for the best chance of upholding your reputation.

Mortgage Fraud Lawyer Advice