Restrictions driving borrowers to fraud
According to data from the fraud prevention service, CIFAS, an increasing number of borrower's are commiting mortgage fraud in a desperate attempt to overcome the strict lending criteria's put in place by the banks.
Figures between July 2010 and June 2011 show an overall increase in the number of recorded frauds from 101,482 to 111,504, as reported by the CIFAS.
Despite the seemingly small percentage increase, of around 1%, the CIFAS have said that since the credit boom, borrowers have been driven to commit fraud by looking for ways around the tough restrictions which prevent many from qualifying for a home loan.
The current climate has led to a significant change in the nature of this type of fraud. During the more prosperous times, at the peak of the housing market, the majority of borrowers were more likely to commit fraud with the hope of aquiring a larger mortgage. For example by working with surveyors to over-value their properties.
The reports from the CIFAS, correlate witht he recent investigation by Times Money which showed that brokers were creating a steady increase in the number of frauds by encouraging borrowers to exploit loopholes and by pushing 'liar loans' which do not require proof of income.
The most common type of fraud involves the failure to disclose former address' in order to veil previous credit problems or missed mortgage payments.
since the start of the credit crunch, borrowers have been finding it increasingly difficult to obtain mortgages due to stricter bank guidelines. In particular people with a bad credit record as well as the self-employed.
(Thursday, July 28, 2011)