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Chelsea building society suffers £41 million mortgage fraud hit

It has been revealed today that the Chelsea building society has been hit by an alleged buy to let £41 million mortgage which has plunged the building society into a substantial loss for the first half of the financial year. The situation has also prompted a massive clear out the company's top management and a new management team have been installed to assess the situation and plot the way ahead.

This is not the first time we have seen an alleged buy to let mortgage fraud plunge a lender into difficulties with the Bradford & Bingley recently announcing a large increase in debt provisions with regards to its buy to let division. The £26 million loss for the half-year has put the Chelsea building society very much on the back foot and there is the possibility of a sale, merger or fundraising program. The new management will first assess the situation and then make a decision about the future although at this moment in time it looks very precarious.

The buy to let market is a market which seems to have slipped under the radar of the various UK regulators and many chickens are now coming home to roost.

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