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£1bn will be lost to mortgage fraud in 2012

The National Fraud Authority estimates £1bn will be lost to mortgage fraud in 2012.

The NFA’s Annual Fraud Indicator predicts losses associated with mortgage fraud remain unchanged from 2011.

However the NFA admits it has trouble detecting mortgage fraud and has poor confidence in its estimates which include undetected fraud in the sector.

The report states that despite the reduction in lending there are still £12bn worth of mortgage loans every month making it attractive to fraudsters.

It states: “Calculating a reliable estimate of mortgage fraud has been challenging for both the NFA and the mortgage lending community.

“In 2010 the NFA contacted mortgage experts from lenders representing 98% of the mortgage market to obtain their opinion on mortgage fraud loss during 2009.

“While there were differences in the opinions provided by respondents, the average estimate of fraud loss to the industry was £1bn.”

The total amount expected to be lost to fraud in the UK nearly doubled from £38bn in 2011 to £78bn in 2012.

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