St Pauls Chambers provides legal advice and strategy guidance on all aspects of mortgage fraud and mortgage broker fraud.
If you’ve found yourself caught up in mortgage fraud, our team of expert fraud barristers is here to help. Mortgage fraud lawyers at St Pauls Chambers have a wealth of experience representing and advising in mortgage fraud cases.
Mortgage fraud is a serious type of fraud and a criminal act. Put simply, mortgage fraud refers to any situation where an individual or group of individuals (say an organised crime group) misleads and defrauds a mortgage lender. This includes, but is not limited to, providing false information about:
Property and mortgage fraud cases are typically divided into two overarching categories:
It’s worth familiarising yourself with mortgage fraud law and the types of mortgage fraud in the UK. Mortgage fraud is a criminal offence, and if you have been accused, it is best to seek advice from an experienced mortgage fraud lawyer.
There are several types of mortgage loan fraud:
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.
Providing false documents, such as false or altered bank statements, to mortgage lenders is another example of mortgage fraud. 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 mortgage fraud law criminal offence.
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 a type of mortgage fraud.
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.
This can include surveyors deliberately over-valuing the property, manipulation of the property market, false paper trails laid by complicit solicitors and the salting away of the resultant mortgage advances for the benefit of an organised criminal group.
Criminals may also sell a property several times within a group of off-shore, related companies in order to inflate the value. They then seek an inflated mortgage from a lender.
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 are a mortgage broker who is under investigation for mortgage broker fraud, it’s important to seek expert advice from a mortgage fraud lawyer for the best chance of upholding your reputation.
Breaching mortgage fraud law 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.
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.
Taking advantage of specialist legal advice at the police station, the Magistrates Court and the Crown Court is essential. Even if the explanation is straightforward, obtaining legal assistance early in the mortgage fraud investigations is advised.
Your mortgage fraud lawyer should accompany you during any interviews and help you navigate the complexities of the investigation process for the best chance of success.
Mortgage fraud offences are sentenced under the Fraud Act 2006.
If you are found guilty of mortgage fraud, your sentence will be dependent on a number of contributing factors. These can include the level of harm inflicted, culpability, your plea, level of remorse, aggravating factors, previous convictions, and more.
For advice on mortgage loan frauds, mortgage broker fraud or support with mortgage fraud cases, please contact us.
Joint Head of Chambers
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Joint Head of Chambers
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