Is mortgage fraud on the increase?

Last week's revelation that Bradford & Bingley lost £196 million as a consequence of buy to let fraud and bad debt has prompted a number of questions regarding mortgage fraud in the UK. It appears that mortgage fraud has been increasing over the last couple of years although is this the real picture?

The truth is that mortgage fraud has been on the increase for many years now due to intense competition in the sector and a very strong UK property market. These two elements have in many ways masked any potential for problems because ultimately no matter what has been declared on the application form, payments have been made in time. However, now that the property market has taken a turn for the worse many mortgage companies in the UK are starting to review their mortgage arrangements and their mortgage customers.

It is this increase in monitoring which has led to the revelation that mortgage fraud is literally costing hundreds of millions of pounds in the UK. In a bizarre turnaround, the recession and the property market collapse have come together to reveal problems which until now had remained very much under the surface.