From The Guardian:
The level of fraud on mortgages and insurance policies has more than doubled since the start of the credit crunch, and the ongoing squeeze on household finances is likely to lead to more cases, a credit reference agency has claimed. Figures from Experian show that although the total rate of fraud on financial products has fallen since 2007, in certain areas there have been big increases in the number of false applications.
Its data shows that the rate of mortgage fraud increased to 38 cases in every 10,000 applications in 2012, up from 35 the previous year, and more than double the 18 cases per 10,000 recorded in 2007. Nine in 10 cases involved individuals painting a knowingly false picture of their personal circumstances on an application, with the most common action being an attempt to hide a poor credit history. False statements about the applicant's employment status or financial circumstances also featured.
Experian said mortgage fraud cases were highest among the social group made up of middle-aged, middle-class, and skilled working-class individuals.
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15 comments:
I know no one who wanted money given to them for a mortgage. They knew that they were then in hock for a long time, paying through the nose for interest. That's not something for nothing, that's on a hiding to nothing.
JH, that's another clever bit of Home-Owner-Ist propaganda.
If you borrow money to buy a car or something, you are a "wreckless consumer"; if you over-borrow to buy over-priced land, then that's "a sensible investment (regardless of some minor irregularities on the forms) for the future because land prices can only go up."
Thatcher's Legacy??? Give me a break.
Just because she believed in home ownership and put through the "right to buy" council houses doesn't mean that mortgage fraud, or indeed home-ownerism, is her legacy. That's just pathetic. Sorry.
AC, no she did not invent Home-Owner-Ism, that pre-existed her. And as we know, Home-Owner-Ism only pretends to be about encouraging a "wider spread of homeownership". In practice it does exactly the opposite and you know it.
But she exploited it to the hilt for narrow electoral purposes and for the benefit of the usual suspects. And as we know, mortgage fraud is far, far more likely if people are brainwashed into thinking that "prices can only go up". Nobody does leveraged speculation on the price of cars or fridges going up, do they?
So there.
Regarding Thatch, here is one of her disciples, Micheal Portillo, making a little confession.
http://www.bbc.co.uk/news/uk-politics-17312335
There is more joy in Heaven when one sinner repents, etc
"Nine in 10 cases involved individuals painting a knowingly false picture"
Maybe we should blame impressionism for that.
"Just because she believed in home ownership and put through the "right to buy" council houses doesn't mean that mortgage fraud, or indeed home-ownerism, is her legacy."
Indeed it would not be, but in order to achieve her goals of wide home ownership, she made it far far easier to get a mortgage than before and that did seriously increase the amount of mortgage fraud. What we have now in the way of fraudulently obtained loans is nothing compared to what it was in the days when she was in power. Lenders became so lax it was unbelievable, and it is unlikely that this was not at least with the connivance of those in charge.
BJ, well spotted. I am absolutely flabbergasted at that.
AKH, nice try but that was the EXpressionists.
B, that's part of it, but also she fostered the myth that "house prices can only go up" and so on. Without that incentive, there would be less mortgage fraud, full stop.
Mark, the sort of mortgage fraud I got to hear about, back in the Thatcher days was more along the lines of taking out a loan with a false identity and doing a runner or getting a loan on a falsely inflated property value and doing a runner with the balance. Prices going up didn't come into it.
Brilliant. I laughed so much reading this. Nice one.
Mark, interesting article by Paul Mason of the Beeb here http://www.bbc.co.uk/news/uk-21863295 showing that Maggie started her reign at an historic low point for developed country debt. It's certainly my, albeit hazy, memory that interest rates started to be higher than inflation sometime around 1979 and that this was something new.
B, overvaluing and doing a runner is clearly criminal. Over stretching yourself a bit in the hope of/fear of prices rising clearly isn't. But Home-Owner-Ism tends to shift that line a bit, doesn't it?
RS, thanks.
B, yes, the only ways to reduce debt-to-GDP are
a) Collecting more in tax than you spend.
b) Inflating away the debt.
Running a deficit is the same as printing "money", so paying off the debt is the same as un-printing or destroying "money".
But of the two methods,
a) is fiscally conservative (hurray!) and
b) is either Socialist or Home-Owner-Ist (not that there's a big difference - boo!).
Or c) increase GDP.
You could, for example, improve the education system, reduce both public spending and taxes, reduce regulation, reduce trade barriers ...
AC, fair point, but it's been such a long time since a UK government gave a shit about growing GDP that I'd almost forgotten that one.
Yes, what Experian are going on about isn't really fraud in the sense that the lender isn't lending more than the security is worth, unlike the mortgage company who lent £25,000 more to the previous owner of a house I bought than I paid them for the repossessed property.
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