Monday, December 17, 2007

Why banks don’t want to lend money anymore

The truth behind rising mortgage fraud

It’s strange that after a decade-long boom in house prices, it’s only now that banks are starting to find that fraudulent claims are rising. The truth, of course, is that banks are only ‘discovering’ mortgage fraud now, because they need excuses to knock back as many mortgage applications as they possibly can...

Posted by mary @ 11:20 AM (898 views)
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5 thoughts on “Why banks don’t want to lend money anymore

  • This is a good post – it is important to note this development.

    The last time Lenders to notice of “mortgage” and “mortgage application” fraud was in 1991 – just as the crash of the early 1990s was getting under way.

    This is an extremely clear sign that Lenders are now concerned about those to whom they are lending. This concern will enhance the rate at which house prices decline.

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  • I seem to remember Panorama? Did a programme on this a couple of years ago, they filmed EA’s and finacial advisors coaching punters on the fine art of er… fraudulent mortgage applications.

    Perhaps those in the banking industry don’t watch TV?

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  • Lenders are tightening their criteria still further and self-cert and fast track loans will diminish dramatically. Mortgages that were previously granted without checking income could well become a thing of the past and this will accelerate the decline in UK house prices.

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  • Think this was raised on the money programme a couple of months ago. There have been whole swaves of flats in the Thames Gateway bought with both “funny money”
    and fraudent mortgaes (with developer discounts) and washed clean with almost instand sales with knocked up prices. I think this is bigger than
    peope think, or the lenders want to let on, and has had a more than insubstantial effect on house price inflation.

    Crime always targets a bubble feeding frenzy, and is only exposed when a crash occurs; a lot of frauds were exposed post 1930 Wall St crash.

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  • Oh dear! Spare change of underwear then for some…

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