Sharp rise in mortgage fraud

01 March 2008



Unfortunately mortgage fraud is on the increase. You may have read about it in the press and the insurance industry is beginning to bear the brunt of the increased claims arising from mortgage fraud.

We had a very recent example of this where we obtained an Order in the High Court to permit the sale of our client's property in Middlesex, where a fraudster had obtained a mortgage in excess of £200,000 and the mortgage company had registered a Legal Charge against the property to protect their interests.

The Court Order we obtained directed the Land Registrar to delete references to the Legal Charge from the Register of Title which allowed the property to be sold. The fraudster produced fake identity indicating a date of birth in 1944 whereas our client was born in 1921.

It was claimed by the fraudster's alleged son that the money was needed to buy a property in Spain before our client's own property was sold. The lenders, who specialise in bridging loans (short term loans) lent the money.

Our client only became aware of the Charge registered against the property shortly before completion was due to take place. We therefore needed to make a very urgent application to the High Court.

A recent report by the Association of Chief Police Officers clearly demonstrates that fraudsters are becoming more sophisticated in their attempts to undertake mortgage fraud.

There is now a new collaborative approach across industry and government, which is fronted by the National Fraud Strategic Authority.

Commercial mortgage applications are also subject to fraud and several believe that fraud tends to be identified when house prices fall.

Be cautious and check the security of your investments against fraud..

For further details on mortgage fraud, please contact Nick Hallchurch on 01753 279037 or email disputes@bpcollins.co.uk.