Valuers facilitate fraud, says CIFAS
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Valuers have been named as being among the main contributors to an annual rise in mortgage fraud.
Members of CIFAS, the UK’s fraud prevention service, saw a 0.2% rise in mortgage fraud in 2009 - the first annual increase among members for three years.
The organisation’s 260 members are spread across the financial sector and include banking, retail credit and mortgage players.
CIFAS says the increase has been fuelled partly by valuers who ensure fraudsters can buy low and sell high.
The CIFAS report states: “Serious organised fraudsters see a recovering housing market as an attractive proposition.
“They are making more attempts to profit by using deception to purchase a property and then sell it on at a higher price.”
It states that the most opportunistic mortgage fraudsters tell lies on their applications to make themselves seem capable of repaying mortgages they may not be able to afford, but with the intention of repaying the mortgage and keeping the property.
Peter Hurst, chief executive of CIFAS, says: “Over and above the frauds recorded by CIFAS members, it is likely that an unquantifiable volume of such activity has never got as far as lenders’ fraud departments, owing to tighter criteria.”
But Simon White, director at London’s Chartered Surveyors, says: “There were problems a few years ago when a property would get repossessed and then a valuer would downvalue it so the agent and solicitor could renovate it and sell it at a much higher price.”
He adds that in the high-net-worth sector in which he operates this has largely disappeared, but that may not be the case in all sectors.
Meanwhile, the crackdown on mortgage fraud continued last week with four men being jailed at Southwark Crown Court for their involvement in a gang that used a firm of solicitors to fraudulently apply for mortgages worth £8m. All pleaded guilty to numerous fraud-related offences in December 2009.
The investigation was launched in March 2009 after Abbey and HBOS asked City of London Police to look into the activities of Essex-based Montague Mason Solicitors.
