Mortgage fraud almost quadrupled in value in the first six months of 2010, according to KPMG’s Fraud Barometer.
Some 21 cases with a value of £96m were reported compared with the same period in 2009, when there were 18 cases worth just £24m. The whole of 2009 only saw fraud amounting to £77m.
Mortgage fraud accounted for more than half of all fraud committed in the financial sector during the period. One of the biggest cases was worth £50m, involving two solicitors who were charged with commercial mortgage fraud in relation to obtaining a money transfer by deception and dishonesty.
An estate agent was also jailed for six years for attempting to pull off a £2m mortgage fraud after stealing the identities of two home owners.
Hitesh Patel, partner at KPMG Forensic, says the fact that an increasing amount of mortgage fraud is being discovered is cold comfort for the industry.
He adds: “Clearly, more is coming to light and undoubtedly yet more will follow. The issue is probably far bigger than our figures show.
“This is a legacy issue for banks dating back to the pre-recession years when house prices were inflated, providing plenty of opportunity for fraud. Lenders must be hoping that they have uncovered most of their fraudulent loans.”
He adds: “But the trend is still upwards and it could be some time before we reach the peak.”
Overall, the Fraud Barometer, which includes serious cases with charges in excess of £100,000 in UK courts, lists 166 cases of serious fraud in the first half of this year – the highest number of cases in a six-month period in the barometer’s 22-year history.