More borrowers lie to get mortgage

09/04/13

By Catherine Ball

More people are now lying about their employment history and finances to get a mortgage to buy a home, statistics have shown.

There were nine per cent more cases of mortgage application fraud in 2012 than in 2011, according to Experian. A report by the credit rating firm claimed application fraud, which includes applications for credit cards and savings accounts as well as mortgages, had increased by three per cent and is set to carry on increasing throughout 2013 as household budgets get even tighter.

But banks have tightened up their checks for issuing current accounts to customers and 2012 saw a 25 per cent drop in fraud by consumers wanting to open a day-to-day bank account.

Nick Mothershaw, Experian's UK director of identity and fraud, said it was good news that current account fraud was decreasing as this was often the first port of call for criminals planning to use deception to take out a mortgage, loan or credit card. And he said the decrease was due to financial services providers becoming more vigilant and making improvements to their systems.

In 2011 for every 10,000 mortgage applications, 35 were fraudulent but last year this rose to 38 in every 10,000. This is more than double the 2007 figure when the number of fraudulent mortgage applications was 18 per 10,000.

Nearly 90 per cent of the incidents involving mortgage application fraud involve borrowers telling lies about their employment status, past jobs and credit history. And Experian said people who were middle-aged, skilled and working-class were the most likely to be untruthful to try and get a mortgage deal.

The report described this group of individuals as the "terraced melting pot" and said they were responsible for more than a fifth of mortgage application fraud cases. It predicted the number of dishonest would-be borrowers would rise this year due to stricter terms set by mortgage providers combined with pressure on household incomes.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.