Sunday, October 3, 2010

Mortage fraud up 37% in first half of 2010

The real culprits behind the rise in mortgage fraud

Recent figures by Experian show mortgage fraud up 37% in the first half of 2010, compared with the previous six months. Now, 35 out of every 10,000 mortgage applications are considered fraudulent. The FSA itself (in its own impact modeling) admits that implementation of the Mortgage Market Review would result in house price falls. It is thought if the FSA succeeds in stopping lenders from lending to people who can’t repay their debts, house prices will collapse (remember, 43% of all home loans granted in the first three months of 2010 were non-verified loans).

Posted by miken @ 01:54 PM (1616 views)
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7 thoughts on “Mortage fraud up 37% in first half of 2010

  • Is it really such a difficult concept to grasp that house prices were what they were because of irresponsible lending and now they’re stopping it, house prices won’t be as high.

    Have people really be hypnotised into believing house prices went up by themselves and it was the kind banks that extended the people excessive loans to help them out in affording a home ?

    Annecdotally, a local agent near me who claimed a record August has just been through most of their stock knocking £10k off, £20k in one case.
    How things have changed quite quickly.

    Anyone remember a defining moment in the last few weeks that changed the Market ?

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  • mark wadsworth says:

    Exactly. That is the beauty of Home-Owner-Ism.

    The footsoldiers, actual homeowners, genuinely believe that their houses are worth what they are worth, and pat themselves on the back for their excellent investment decision, taking on personal responsibility, a stake in society etc etc. And it is dawning on them that the banks and politicians (the driving force behind Home-Owner-Ism) have pulled a huge great scam (especially in Rep of Ireland – our awakening is yet to come). Everybody’s bashing the banks nowadays.

    But the minute anybody explains that if the banks started behaving responsibly again, that house prices would fall, all of a sudden it’s “oo-er, maybe it’s best to keep on going, or find some other way of propping up prices, like cutting council tax, freezing new builds, keepign interest rates low, whatever”

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  • “It is thought if the FSA succeeds in stopping lenders from lending to people who can’t repay their debts, house prices will collapse.”

    Did this really require much thinking? Did they discover this phenomenon using a financial simulation run on a Cray computer? I would also argue that lenders will collapse if they keep lending to people who can’t repay their debts. I worked this out using mental arithmetic. I suppose what we need now is a modern economist to prove to us (using magic numbers and pretty formulas) that this is a new paradigm that can actually work and all people need is ‘confidence’, a term often heard from Politicians and Central Bankers i.e/ Con-men.

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  • But the minute anybody explains that if the banks started behaving responsibly again, that house prices would fall, all of a sudden it’s “oo-er, maybe it’s best to keep on going, or find some other way of propping up prices, like cutting council tax, freezing new builds, keepign interest rates low, whatever”

    So important to the UK economy has the housing market become, I would not be surprised if the currency wasn’t completely wrecked in maintaining the illusion. The fact is that there is no economic future, and certainly no prosperity, in high house prices. It’s another reason why so many jobs are being sent abroad, the UK worker can’t simply compete.

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  • The horrid truth is gradually being recognised by more and more people..

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  • @str2007. I noticed a number of modern well-built properties in my area have suddenly (in the last week) had 10-15k took off the price. Perhaps part2 of the crash is really happening now. We may even be entering a panic phase.

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  • a few years ago, you could blatantly lie about your income and get a mortgage. Now the banks are being a little more cautious, you have to apply to 20 banks before finding one dodgy enough to give you a loan. I reckon thats what is making it look like fraud applications are up

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