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Is Mortgage Fraud A Real Problem In The UK?

In the middle of the collapsing property market it seems as though mortgage fraudsters are very much on the prowl with the Financial Services Authority (FSA) on the look out for some major scalps. It has come to the FSA's attention that a number of mortgage brokers are encouraging customers to be a little liberal with their earnings figures so that mortgages can be obtained. It is unknown if the practice is widespread but the FSA has promised to look at the issue and take action as soon as possible.

Quite what has prompted this major operation within the mortgage industry is unclear but it could be related to the US where the FBI has uncovered a number of major mortgage scams, one worth in excess of $1 billion. Many are blaming these rogue mortgage agents for part of the housing market collapse with many customers unable to fulfil their mortgage obligations. Repossessions are set to rise, negative equity is already on the increase and the property market is still experiencing very low transaction volumes.

If the FSA take the US approach then we could see a number of high profile prosecutions over the coming months and a tightening of the mortgage regulatory framework.

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