Rise in mortgage related fraud this year

According to a recent report there has been a marked increase in mortgage related fraud this year, with fraud levels in terms of value said to have quadrupled over the first six months of this year. Since the onset of the global financial crisis mortgage fraud has been steadily rising, and has now experienced a sharp increase according to the KPMG Fraud Barometer. 

In the first six months of this year there were twenty cases of mortgage fraud reported, and these had a combined value of £96 million. In the same period last year the number of cases recorded was eighteen and these had a combined value of just £24 million. In fact, the index shows that the value of mortgage fraud for the whole of last year was just £77 million, and this figure has already been surpassed in the first six months of this year. 

Over this period of time over half of all fraud committed against the financial sector was made up of mortgage fraud, reflecting just how common this type of fraud has become. One of the cases involved commercial mortgage fraud with two solicitors who were charged with this crime, and this case along was valued at £50 million. KPMG has said, however, that the fact that more people are now being prosecuted for mortgage fraud is good news for the sector.

KPMG said: “The fact that increasing amounts of mortgage fraud are being prosecuted is cold comfort for the financial services industry. Clearly, more of it is coming to light and more will follow. It is highly probable that the issue is far bigger than our figures demonstrate. This is a legacy issue for the banks from the pre-recession boom years when house prices inflated, providing the opportunity for fraud. Banks will be hoping that they have uncovered most of their fraudulent loans. But the trend remains upwards and it could be some time before we see the peak.”