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Lenders go to HMRC to check 269 suspect cases

Lenders have verified the income details of 269 mortgage applicants they suspect of committing fraud using HM Revenue & Custom’s mortgage verification scheme.

The scheme, which launched in September, is designed to combat mortgage fraud by allowing lenders to verify the income details declared by mortgage applicants with those registered with HMRC for a £14 fee.

So far, only 13 lenders have signed up to the scheme, which means that each lender submitted an average of nearly 20 requests in six months.

The scheme was launched in conjunction with the Council of Mortgage Lenders and the Building Societies Association.

A spokesman for the CML says it can take some time for lenders to go through the process of registering for the scheme, which could explain why only 13 have signed up.

He says: “We are encouraged that it has made a steady start and would like to see more lenders using it.

“It has to be remembered that it is a way for lenders to check applications they believe could be fraudulent and not a means of verifying income, so one wouldn’t necessarily expect to see thousands of applicants going through the process.”

John Malone, who represents brokers on the National Fraud Authority’s Mortgage Fraud Forum, says he is not alarmed that 269 checks have been carried out.

But he adds: “I would have thought more lenders would have registered, although it is not clear whether firms like Lloyds Banking Group count as one lender, or all its brands are considered separately.”

He says figures for the next six months should give a clearer indication of how many people are trying to commit fraud, as lenders tighten criteria and consumers find it harder to get a mortgage.

Meanwhile, a mortgage broker has been sentenced to two and a half years in prison following an investigation by the Metropolitan Police.
Olakunle Okubote of Finchley was jailed and forced to hand over more than £23,000 on February 24, following a five-week trial at Wood Green Crown Court.

The broker helped criminals get mortgages by providing false documents. He also secured cash discounts of £10,000 to £20,000 on new-builds, which he kept with the knowledge of the conveyancing solicitors.

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