Police Raids Start to Uncover Property Fraud
Friday, March 13, 2009 8:45
Figure shows that the number of mortgage fraud had grown vastly as the financial downturn unfolded. Crooked mortage deals running to more than 1 billion poiund are being investigated by police fraud squads.
Buy-to-let fraud typically involves a syndicate of property professionals collaborating to inflate the value of properties that are then bought for less than the value stated to the lender. If the lender defaults, the bank finds itself respossessing a property with a far lower value than it was led to believe. Tenants are caught in the middle and can find themselves evicted if a landlord falls into mortgage arrears.
Many mortgage scams are coming to light as the banks review years of flawed lending laid bare by the financial collapse. The Times understands that leading banks that now depend on public funds, including HBOS and RBS, have lost millions to mortgage fraudsters.
Police steeped up thir inquiries into property fraud after discovering the involvement of organised criminal groups that used property puchases to launder the proceeds of drug dealing and people-trafficking.
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