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Lenders are keen to use HMRC’s anti-fraud tool

CHARLES HARESNAPE - SCHEME WILL BE USEFUL
CHARLES HARESNAPE – SCHEME WILL BE USEFUL

Lenders have welcomed the launch of an anti-fraud verification scheme last week by HM Revenue & Customs, the Council of Mortgage Lenders and the Building Societies Association.

Under the scheme, a lender that suspects mortgage fraud can send details of the application to HMRC which will check income details against information that is provided in Income Tax and employment returns.

Charles Haresnape, managing director of residential mortgages at Aldermore, says it will be a useful tool for clarifying inconsistencies in applications that lenders are unable to verify themselves.

But he adds: “I would see it as a last resort and anticipate only using it in rare circumstances.”

A spokesman for Kensington says: “Kensington welcomes the initiative, which will greatly assist lenders in tackling suspected mortgage fraud. While it is difficult to say at this stage how frequently the system will be used, we intend to use it as part of our approach to fighting fraud.”

HMRC has set up a specialised unit to deal with the requests for which lenders must pay £14 plus VAT per case.

The system will also be used by HMRC to assess whether the information supplied on tax returns is correct.

But a spokeswoman for HMRC says this will merely be a secondary use of the scheme.

She says: “The primary purpose of the initiative is to counteract mortgage fraud, but it will also allow us to compare the information consumers give to mortgage lenders and what they put on their tax returns.”

The CML says it does not anticipate the scheme having a significant impact on the time taken to reach a lending decision.

Paul Smee, director-general of the CML, says: “Following a pilot of the scheme, lenders say it has helped them avoid lending in some cases where there is a risk of fraud, as well as giving them confidence about borrowers’ credentials in cases they might otherwise have felt compelled to refuse.”

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  • Tom Cleary 14th September 2011 at 7:25 am

    Is this only with the applicants consent? If not, is it actually legal? Are the Government allowed to release confidential information without express consent of the individual concerned? George Orwell will be turning in his grave…

  • john smith 12th September 2011 at 3:28 pm

    sounds good in principle but it does come with problems. cover all angles. i have a case which Natwest want to check via HMRC. Client had a significant payrise 3 months ago and now works full time. HMRC can only confirm last years figure which the lender can already see on the P60. They have also said it will take 5-6 weeks and by then its too late with the agent wanting to put the property back on the market.

  • Doris 8th September 2011 at 4:52 pm

    £14? This should be free

  • Daz 7th September 2011 at 7:14 pm

    So why do borrowers need to show income or accounts anymore. Surely for £14 every case can be checked with the exact figures.
    Shaks you are quite right as although mortgage fraud in any shape cannot be condoned these will be the very same lenders that encouraged borrowers a few years ago by saying dont worry what you put this will never be seen by the tax office. How times have changed. HMRC should look retrospectively at lenders / banks lol

  • Ketan Yadav - Avenue & Co Private Finance 6th September 2011 at 4:24 pm

    We just submitted a case via Nat West on a BTL case – looks like Nat West have already started using this as they have requested a letter of Auhtority from my client today!

    …it is of course going to add more time on processing the case now – and my client is already at risk of losing the property as its going to cause delays on underwriting!

  • Shaks 6th September 2011 at 2:36 pm

    I think HMRC should stick to the business of collecting tax rather than breaching the data protection act to make some quick bucks at £14 a go!!!
    Will the client be given the chance to autorise the approach to the HMRC as is currently the case? I choose to only deal with honest clients via tried and tested referal system, so I find this type of snooping particularly offensive. Have a look at the tax affairs of the majir banks. I’m sure HMRC will find lots of skeletons hidden in offshore strucures avoiding much needed revenue. Problem is they don’t have the balls to challenge the banks and big corporates. Too many vested interests.