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Mortgage Lenders Report Fraud On The Rise

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http://business.timesonline.co.uk/tol/busi...icle6695319.ece [July 13, 2009 ]

Mortgage lenders report fraud on the rise

A rush for cut-price property by bargain-hunting buyers has led to an increase in fraudulent mortgage applications, with the number of inflated salary claims soaring.

The Council of Mortgage Lenders (CML) told The Times that its members had reported the increase in the face of scarce loans and stricter lending rules.

Sue Anderson, of the CML, said: “This is to do with fewer mortgage products, tighter criteria and an increase in demand. Lenders have become a lot more vigilant.â€

Abbey, one of Britain’s biggest mortgage lenders, said: “There has been an increase in fraud across the board as a result of borrowers finding themselves in more difficult financial circumstances. There are particularly more instances of borrowers giving wrong salary details.â€

Examples of mortgage-application fraud include the failure to declare a credit card balance or car loan that would affect the assessment of applicant’s ability to afford the loan.

Banks and building societies can uncover an undisclosed credit obligation by searching a borrower’s credit file or by using an agency to check for discrepancies between information provided and records held elsewhere.

However, there are also concerns that some legitimate applicants are falling foul of checks for innocent reasons.

The CML said that applicants might not know why their application had been unsuccessful because lenders usually cited failure to meet credit-scoring requirements as the reason for a rejection. Banks now require deposits of about 25 per cent for their best deals and have grown increasingly wary of borrowers with any missed payments on their credit files.

Self-employed people, who were once able to secure a 100 per cent mortgage by submitting their estimate for projected income, could now find a remortgage application rejected by their existing lender.

Apacs, the payment industry body, said that an increase in attempts to defraud during an economic downturn was to be expected.

-------------

Eric! :unsure:

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Guest KingCharles1st

Look- Eric's not here- he had to go to a BBQ- and isn't feeling too well.

He asked if I would stand in for him until he can get well enough to get back to HPC

So- I had a think about what Eric might have replied with, and after much reflection, came up with this-

LIAR LOANS!

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Apacs, the payment industry body, said that an increase in attempts to defraud during an economic downturn was to be expected.

:lol:

Like is wasn't occurring during the "boom".

Bottom line - if fraud is to be encouraged (which it has been) and rewarded (which it has been) and every attempt to prop up the proceeds of fraud (which is what is being attempted by the BOE/govt/banksters) then fraud is what will be committed again and again and again by most parties.

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Look- Eric's not here- he had to go to a BBQ- and isn't feeling too well.

He asked if I would stand in for him until he can get well enough to get back to HPC

So- I had a think about what Eric might have replied with, and after much reflection, came up with this-

LIAR LOANS!

:D:D

Er.... no Charlie -- it's this:

liar loans.

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People can't get the amount of loan they need based on lower multiples so they inflate their salary accordingly. Prices need to fall.

STill, a good attempt by the Times to turn a very bearish story into a positive with all these buyers rushing out to snap up cut-price properties. Especially as the sources quoted in the article say nothing of the sort.

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Perhaps the amount of fraud is up because the lenders are looking for it.

Funny how, if you look for something, the chances are you will find it.

Lenders' diligence through the slump will help prices down by reducing demand, just as their negligence helped stoke the boom.

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Yes you are probably right, when prices were rising they had big volumes of mortgages and prices were rising, now with small volumes and falling prices they are looking a lot more carefully.

I suspect a lot will still get through.

Tide rolls back --- no swimming trunks .... 'n all that stuff..... :rolleyes:

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