Cozza Posted July 3, 2014 Share Posted July 3, 2014 Interesting that this is starting to gain exposure. Has the potential to be worse than the original self-declaration scam in my humble (anecdotal) opinion: http://www.bloomberg.com/news/2014-07-02/u-k-mortgage-seekers-exploit-loophole-to-avoid-new-credit-check.html Quote Link to comment Share on other sites More sharing options...
Wurzel Of Highbridge Posted July 3, 2014 Share Posted July 3, 2014 Could this be the start of the end of BTL? In theory if BTL approvals sky rocket, BOW will have to step in and regulate those loans too. That would be good news for renters because it gives you more security that your landlord won't default and it removes competition from the buying market. Quote Link to comment Share on other sites More sharing options...
Digsby Posted July 3, 2014 Share Posted July 3, 2014 I wonder if E.surv *knows* there has been mortgage fraud, in which case shouldn't it be reported (to the authorities), or if it is guessing from the uplift in BTL mortgages that this must be the case, because there is a big difference and they seem to be stating it as fact. I think it's inevitable myself but that's pure conjecture, how widespread it might be - no idea, but this needs to be clamped down on fast and it would be good for us waiting for falls if it is, so great news it's getting media coverage. I suppose, also by making the fact that BTL mortgages are exempt from the regulations more widely known, it might be the start of something that sees BTL being more tightly regulated which would be great as well. I can't imagine it's the beginning of the end of BTL though, hope of all hopes, but if tighter regulations wiped out a sizeable portion of it, that would be worth celebrating. Before the new rules about access to pension pots at 55 comes in, please! Quote Link to comment Share on other sites More sharing options...
workingpoor Posted July 3, 2014 Share Posted July 3, 2014 Nice reference to tulip bulbs in the only comment so far! Yes I'm glad to see the spotlight turned on this loophole charade, that's the problem in the uk whenever new rules are brought in you always get some people who think it doesn't apply to them. Quote Link to comment Share on other sites More sharing options...
The Knimbies who say No Posted July 3, 2014 Share Posted July 3, 2014 Doubt anything will be done tbh, don't even know why the word 'fraud' is used given the implication of consequences. What can they do to uncover it? Crosscheck tenancies with deposit protection system with bankaccount details contained therein? Sounds like a lot of work for people who aint interested in looking. Does a BTLer have to submit a tenancy to his or her lender at all? Quote Link to comment Share on other sites More sharing options...
Debbiebegood Posted July 3, 2014 Share Posted July 3, 2014 Quote In London, prices climbed almost 26 percent during the second quarter from a year earlier, fueled by cash-rich buyers and foreign investors. End Quote They are blaming (yet again) the usual suspects - "cash-rich buyers and foreign investors". It looks like that these alleged cash rich buyers and foreign investors always somehow flood the market each time the Government introduces HTB or FLS, or QE or Special liquidity scheme, or ANY other backdoor scheme (on the Bank of England's website) to help the banks (and of course "help" the property buyers.) Anyway, how "cash rich" are those "savvy" foreign buyers? Are they 100% cash rich or 50% or ... 1% cash "rich"? If those "cash rich buyers" indeed exist in such huge numbers over the past 6 (or more) years, I bet that they took out huge loans on very high LTV from the UK banks, so we (the taxpayer) are all on hook if their loans are not being repaid. Not to mention that "rich" foreign buyer is surely not that much interested in the UK property which is usually small, in the poor condition and with a totally non existent yield. Over here in Lewisham (London's 3rd zone) the 2 bed Council flat (of 600 sq ft) in urinated building with drug and social problem tenants is listed for - £400k (?!) Two years ago this flat was listed (at the peak 2007 price) for - £160k. Many examples like that. Private tenants are moving out (anecdotal) because they cannot afford the £1000 per month rent. Go figure the net yield after maintenance and service charges costs. Surely foreign oligarchs or any "savvy" investor will not bid for that flat in order to rent it out or to live in (unless they were lobotomised). If anyone buys it on mortgage, then both them and the bank staff should be imprisoned and their assets confiscated, because that was a liar loan. After all this talk (for years) of those "cash rich" are those "savvy" foreign buyers, I still have not seen rich or rich foreign people in my area (where that flat is) despite the prices going up 2.5 times (!) on the 2007 prices. Instead, it is poor UK individuals (on liar loans) moving in or out of these properties. I hope that people will eventually realise that there are no cash rich buyers and foreign investors that media,VI's, Government, EA are trumpeting. Instead it is liar loans from mainly UK individuals + various City "funds" buying in bulk (same as in USA) Council and other properties with the help of the free Government's money. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 3, 2014 Share Posted July 3, 2014 Interesting that this is starting to gain exposure. Has the potential to be worse than the original self-declaration scam in my humble (anecdotal) opinion: http://www.bloomberg.com/news/2014-07-02/u-k-mortgage-seekers-exploit-loophole-to-avoid-new-credit-check.html PREDATORY LIAR LOANS THE greatest FRAUD in all history. The greatest instrument of financial destruction too. Quote Link to comment Share on other sites More sharing options...
Cozza Posted July 3, 2014 Author Share Posted July 3, 2014 I suppose, also by making the fact that BTL mortgages are exempt from the regulations more widely known... And the prize goes to that man! My feeling is this is more about informing the masses that there is a loophole they may be able to exploit. Having a pet surveyor (or using an EA/mortgage broker with one) is a great way of getting round the more onerous deposit requirements of BTL mortgages. The article could be rephrased as "VI seeing lucrative source of business would like a larger market share". As for regulation? Maybe in 5-10 years time after the next collapse... Quote Link to comment Share on other sites More sharing options...
onlyme2 Posted July 3, 2014 Share Posted July 3, 2014 PREDATORY LIAR FINANCIAL SYSTEM It goes further than just the loans. Government and the bankrupt of england are at the beating heart of it. The liars and the system gamers have been bailed out with stolen money from the rest of us, they are chancing their arm again. Quote Link to comment Share on other sites More sharing options...
FreeTrader Posted July 3, 2014 Share Posted July 3, 2014 This is from the FSA's Retail Conduct Risk Outlook 2012: http://www.fsa.gov.uk/static/pubs/other/rcro12.pdf Recently the FCA (which has taken over from the FSA) highlighted the same issue with regard to the new LTI mortgage limits recommended by the FPC. However the FCA said they didn't think there would be much 'leakage' because the penalties for mortgage fraud were so severe.The FPC has also said it will be 'vigilant' to possible 'regulatory arbitrage'.So, nothing to worry about - the regulators have it covered (cough). Quote Link to comment Share on other sites More sharing options...
onlyme2 Posted July 3, 2014 Share Posted July 3, 2014 This is from the FSA's Retail Conduct Risk Outlook 2012: http://www.fsa.gov.uk/static/pubs/other/rcro12.pdf Recently the FCA (which has taken over from the FSA) highlighted the same issue with regard to the new LTI mortgage limits recommended by the FPC. However the FCA said they didn't think there would be much 'leakage' because the penalties for mortgage fraud were so severe. The FPC has also said it will be 'vigilant' to possible 'regulatory arbitrage'. So, nothing to worry about - the regulators have it covered (cough). THe common link between the FSA and FCA - ****** and All Quote Link to comment Share on other sites More sharing options...
billybong Posted July 3, 2014 Share Posted July 3, 2014 (edited) Eureka they've discovered a previously unknown problem So BTL mortgage fraud is being exposed as a problem and as always that's in the process of being solved - as if. How many times have they solved that sort of stuff already and why now. It's July 2014 and there's a UK general election due in less than a year's time in May 2015 so get on board to help boost house prices before they tighten up. If ahem "overseas and cash rich buyers" are trousering so much UK property then is must be a good thing. Theres a UK general election in the offing you lucky people. Edited July 3, 2014 by billybong Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted July 3, 2014 Share Posted July 3, 2014 Setting up he tax payer owned banks to fund the mis selling mortgage compensation scandal. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted July 3, 2014 Share Posted July 3, 2014 With BTL it's going to be interest if rates raise as to what happens, it's hard to see rent increases being able to keep up with the increases in interest repayments. Still it's all easy money! Quote Link to comment Share on other sites More sharing options...
Snugglybear Posted July 4, 2014 Share Posted July 4, 2014 Setting up he tax payer owned banks to fund the mis selling mortgage compensation scandal. If it's clear from the paperwork that it's a BTL mortgage, not a residential mortgage, the applicants are unlikely to get compensation. With PPI, compensation is only paid if it wasn't clear that insurance was included in the loan arrangements or that the insurance was unsuitable for the individual. In both cases, of course, it depends on the adjudicator's definition of clarity. But claims for PPI compensation have been rejected in cases the situation was clear and the individual took out the insurance anyway. Quote Link to comment Share on other sites More sharing options...
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