London police reveal mortgage fraud up 72%

London police reveal mortgage fraud up 72%



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Influential investor Warren Buffett once said that it was only when the tide went out that you could see who had been swimming naked.

This analogy also goes some way to explaining the spike in mortgage fraud that has come to light amidst the downturn.

As lenders seek to recover their losses, it has been revealed that many lending institutions had been exposed to huge frauds in the boom times, namely building societies Bradford & Bingley and, most recently, Chelsea Building Society.

Now City of London police have confirmed that they have seen a 72% rise in cases of financial fraud since last year, with allegations of mortgage scams now reaching double figures.

The force added that it is currently one of the biggest areas of activity for its officers, and is set to increase even more over the upcoming year.

Detective chief superintendent Steve Head, the chief of the City of London's economic crime directorate, has said: “While the amounts of money we are dealing with are significant, I don't think we are seeing the full picture. It is a fraction of the amount of fraud that has taken place.

“It is the mortgage lenders that are hit by the crime and they usually see it first. It would be good if the lenders were coming forward more than they are at the moment.”

It is thought that many lenders are disguising the extent to which they have been hit by mortgage scams, or simply haven’t got round to tackling it yet.

Simon Bevan, head of fraud services unit at BDO Stoy Haywood, has predicted that domestic mortgage fraud could reach £1 billion by the time the recession ends.

He added that commercial property mortgage fraud could top £5 billion.

 

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