Ever since the recession began in 2007, we’ve seen a worrying rise in mortgage fraud cases; in fact the figures have almost doubled to 38 in every 10,000 cases. A credit reference agency has commented that further limits to household finances will only increase instances of mortgage fraud in the UK.
Total fraud rates have dropped since 2007, but certain sectors have seen an unprecedented rise in false applications. Nine in ten of the mortgage fraud cases intentionally tweak their personal circumstances; usually to hide a poor credit history. However, it’s also common to mislead officials about financial circumstances and employment.
43% of mortgage frauds hide a bad credit rating. This is usually achieved by hiding the unfavourable address, where all this information has been registered. 33% of cases lied about their income by handing over fake or altered documents – this has fallen by 12% since last year. Finally, down from 17% to 14% of all mortgage fraud cases, lying about employment comes in at third place.
It’s thought that the majority of mortgage frauds hide bad credit ratings because the recession has brought out the worst financial history in some of the best of us.
According to Experian, the most likely culprits are the middle-aged, middle-class, and skilled working-class. Most people will want to pay off their mortgage before they retire, so those approaching middle-age can often panic.
New research spent tracking mortgage fraud predicts that next year, 43 out of every 10,000 mortgage applications will be fraudulent. Within the past year, mortgage fraud has overtaken current account fraud for the very first time. In 2014, tougher mortgage lending rules will come into force, so applicants are under greater scrutiny.
During this protracted recession, it’s exceptionally difficult to get on the property ladder. In order to get the best mortgage deals, you’ll have to save up as much as 30% or more of the total house price.
First timers usually apply for a 90% ‘loan to value’ mortgage, which means you borrow 90% of the property’s value, while laying down 10% of your new home’s value. This means, if you’re looking to purchase a property for £200,000, you’ll need a £20,000 deposit.
With many people struggling to make ends meet, it’s a humungous sum to amass. And through this policy, you’ll have to pay high interest rates too! Of course, with tighter restrictions on mortgage lending, it’s unsurprising that fraud rates have increased, as many citizens are priced out the property market.
In 2009, the average deposit placed down for a mortgage was almost £30,000. In 2010, the average age of first-time buyers was 31. The market is currently too difficult to approach for young people. Those who can’t, for whatever reason, rely on their parents to help them out with their down payment, can apply for the government’s HomeBuy scheme. With this, you can receive between 15% and 30% of the cost of the property as an equity loan.
The legal courts are seeing an alarming trend in the number of serious fraud cases. If you would like further supportive advice on your serious fraud case, visit that linked page.