Mortgage fraud doubles in 2009
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The 2000s were a decade of fraud, according to KPMG Forensic’s Fraud Barometer, with mortgage fraud doubling in 2009.
There were 31 cases worth £77m in the year, compared to 10 cases worth just £3.7m in 2007 and 25 cases worth £36m in 2008.
Some cases involved organised rings, such as one case of alleged commercial mortgage fraud in which six people were charged with selling properties between one another in a number of back-to-back deals at inflated prices.
Others involved individual applicants, such as one North East man who was charged with 16 different offences relating to mortgage loan application fraud, totalling over £700,000.
KPMG predicts that increasing amounts of mortgage fraud will come to light in the wake of the end of the property boom and as lenders increasingly scrutinise their mortgage books and reclassify their mortgage asset portfolios.
Overall fraud reached a peak in 2009 when a record £1.3bn of cases came to court.
This is the highest figure since KPMG began compiling data back in 1987. Taken together, the 2000s saw a major uplift in serious fraud cases compared to the 1990s – some 1750 cases of serious fraud where the charges are at a value of £100,000 or more came to court, compared to only 700 cases in the 1990s. Over £7bn of fraud was heard in Britain’s courts in the ‘Noughties’, compared to less than £5bn in the 1990s.
Hitesh Patel, partner at KPMG Forensic, says: “Britain appears to have a rising fraud problem, as is evident by looking at the steady increase through the last ten years. The last decade, I am afraid, could certainly be dubbed the ‘naughty Noughties’.
“The credit crunch will undoubtedly make the situation worse, and we are yet to see the full impact of it. The forecast therefore is: getting worse.
