Prosecutions for mortgage fraud increase, study finds
09 Aug 2010
A new survey into
serious fraud has revealed that prosecutions
for mortgage fraud increased during the first six months of
2010.
KPMG's fraud barometer found there was GBP 96 million worth of
mortgage cases during this period, compared with GBP 24 million in
the first six months of 2009.
Furthermore, there was a total of GBP 77 million of fraudulent
mortgage cases during the whole of 2009, the research found.
Mortgage fraud accounted for more than half of all serious fraud
cases, a factor which was blamed on stagnating house prices and the
recession.
Hitesh Patel, partner of KPMG Forensic, commented: "This is a
legacy issue for the banks from the pre-recession boom years when
house prices inflated, providing the opportunity for fraud.
"The trend remains upwards and it could be some time before we see
the peak."
Professional criminals were found to be behind most cases of
serious fraud, while one of the biggest cases involved two unnamed
people who had obtained a money transfer worth GBP 50 million by
deception.
This comes after Experian's Insight documentation, published in
March 2010, predicted mortgage providers would fall victim to
increasing levels of fraud this year.
It said losses from the mortgage market could reach GBP 1.2 billion
by the end of this year as consumers struggling with the effects of
the recession try to claim financial services they are not entitled
to.
Higher levels of unemployment and decreased lending from banks were
cited as two main reasons.
