Stricter laws call to halt mortgage fraud

Posted 2008-02-9

UK mortgage lenders are calling for tighter rules to stop mortgage fraud in the sale of new city centre flats.The Council of Mortgage Lenders (CML) says uncertain conditions in the property market could make it tempting for developers to offer deals like cash-back offers, inflating property values.

A CML publication said: “In recent years, discounts and incentives have had the effect of making the real value of new homes less than transparent. This is bad news for genuine buyers and lenders.
“Buyers may find themselves with a mortgage worth more than the property’s value, while lenders may find themselves exposed to fraud and the risk of loss.”

The CML also said developer incentives like free holidays, paying of legal fees and buying white goods were a cause for concern.

The CML is the trade association for the industry of mortgage lending.

Leave a Reply