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Warning over mortgage fraudsters
Thursday, 6 November 2008
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Mortgage fraudsters are trying to cheat Northern Ireland banks out of millions of pounds, it was claimed today.
Increased criminal activity in areas like lending applications forced financiers to tighten lending conditions and increase scam prevention measures, business advisory group Deloitte said today.
Across the UK the annual cost is around £700m, according to police, with the problem exposed as property prices fall.
Phil Goodwin, an assistant director with business advisory firm Deloitte, warned of the "unseen hand" of the mortgage fraudster.
"While the housing market was rising, not only could criminals launder the proceeds of crime, but they could enjoy a low risk of detection and make a profit at the same time," he said.
"Warren Buffett, the renowned philanthropist and billionaire, once said that 'only when the tide goes out do you discover who has been swimming naked'.
"Such may be the case with the mortgage industry currently. And as the housing market has declined, banks have discovered numerous occurrences of mortgage fraud."
He linked mortgage cons trying to cheat banks out of millions to super-inflation of the housing market and exacerbating lending problems associated with the credit crunch.
Unscrupulous individuals can submit questionable mortgage applications or provide incentives to inflate the value of houses.
A whistle-blower scheme has been established by the Financial Services Authority (FSA) where people report suspicious broker activity to the authority and it shares that information with other lenders.
A spokeswoman for the Council of Mortgage Lenders said it was difficult to quantify exactly how much was down to fraud.
"The upshot of it is that we do not think that figure of £700m was substantiated, but it is of substantial concern to lenders and they are trying to find ways to combat fraud.
"It is more likely to show up in a falling housing market and at the front end there are greater temptations for fraudsters."
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Further to my previous comment I would like to add that its is amazing that the banks and the government will blame everyone else but themselves for the current situation. The government and Banks were more than eager to superinflate the housing market for their own agendas so the government could make more in taxes from developers and likewise banks were laughing "at the time" all the way to the bank "so to speak" as they were able to seduce people into deals which were too good to be true and encourage ridiculous lending schemes so ultimately they could increase turnover and profits. It makes me laugh hearing the "old" arguements for the high prices which unfortunately too many people still believe. What happened in Northern Ireland was the biggest CON of all time and only history will spell this out for people and the banks and government were more than willing to assist as they lined their pockets. If you want to know who the real fraudsters were, they were the banks and government
Posted by David | 07.11.08, 02:47 GMT
It seems that the banks were more than willing to lend money to people without carrying out the adequate checks. If so in reality the banks lending practices have to be examined. Sub-Prime mortgages were designed for a reason! a reason which possibly the Council of Mortgage Lenders would like to answer? Sub prime mortgages were rife through the boom in the uk! lenders were more than happy to give out the money. From what I see and I am no expert, the quote used above from "Warren Buffett, the renowned philanthropist and billionaire, once said that 'only when the tide goes out do you discover who has been swimming naked'.
From where I am it looks like the UK Government and the UK banks were swimming naked. As the banks had to go to the government so they didnt go bust and likewise the government to the Soverign Weath States and the International Monetary Fund. So Ask yourself the question again..........who has been swimmimg naked after all ??? I think we all know deep down ......
Posted by David | 07.11.08, 02:33 GMT