Mortgage fraud is becoming increasingly common in the UK, and it can be easy to get yourself caught up in it.
Read on to find out everything you need to know about this prevalent crime.
What is mortgage fraud?
Mortgage fraud is when individuals or a group of people defraud banks or private lenders out of funds throughout the mortgage process. This includes, but is not limited to, providing false information about:
- your income;
- your debt history;
- your employment; or
- the value of your property
What are the different types of mortgage fraud in the UK?
In the UK, there are several different types of mortgage fraud:
False information on mortgage applications
Providing false information on mortgage applications is fraud. Individuals who do this typically overstate their income to increase the amount they are entitled to borrow. While this may seem harmless if the borrower believes they can meet their monthly mortgage repayments and can therefore avoid defaulting on their home loan, it is still considered mortgage fraud.
Additionally, providing false information to the lender on any other part of the mortgage application form will also be considered mortgage fraud.
Fake documents
If you provide false documents such as fictitious or altered bank statements to lenders, you are committing mortgage fraud. This usually involves submitting false documents as evidence of income or identification, which can be traced back to services advertised on the internet.
Exaggerated valuations
This scam involves property professionals working together to obtain mortgages on properties that are overvalued. This is a sophisticated type of fraud that can involve surveyors deliberately over-valuing the property, manipulation of the property market and false paper trails laid by complicit solicitors.
What are the legal consequences of mortgage fraud?
Being accused of mortgage fraud is not something to be taken lightly. Here’s just a few consequences you could face for participating in this type of crime:
- Mortgage fraud cases involving exaggerated income can result in a failure to repay the debt in the future, and having your property repossessed
- Blacklisting against future purchases
- Police investigation and potential prosecution
- If you receive benefits, overstating your income or the value of your property can affect your benefit payments
- Being served a fine or prison sentence, or both, and having a criminal record
If you need advice on mortgage fraud or have any other conveyancing queries, Richards and Lewis is here to help. We understand that the process of buying and selling a home can be very stressful, which is why our experienced team of conveyancing lawyers will alleviate your worries and simplify the process for you. For those of you who have been searching for ‘property solicitors near me’, contact us today for guidance on conveyancing costs and more.
