1. quiet guy said...

'Robinson said: "Consumer protection also means protecting them from themselves – by showing them that if they perpetrate fraud they should fear the consequences."

He makes it clear that people committing fraud could be at risk because they obtain mortgages with high loan multiples and loan-to-value ratios.

Be warned!

THIS week Lloyds TSB proclaimed the "boom in Scottish house prices has come to an end", with the first quarterly fall in the all-Scotland average house price for seven years.'

There seem to be two aspects of fraud that this article covers. One is ID fraud hence the requirement for security checks - that makes sense.

The other, much bigger problem, is people exaggerating their incomes or submitting false self certifications to borrow more than they should. I doubt we will ever get reliable statistics about the number of people who lied to get on the ladder but if my experience is anything to go by, it happened a lot and helped fuel the boom.

As far as I'm concerned, the FSA and the banks were asleep on the job. Unfortunately, we are all paying the price with the Northern Rock bailout, damage to pension funds by CDOs/SIVs and general economic mayhem.