Mortgage application lies 'on the rise'

14/07/2009

Recession-hit homebuyers tempted to cheat on their mortgage application forms have been hit by a warning from Equifax today.

The credit reports firm said that many people were telling lies about their earnings and other details when taking out a loan in the downturn.

However, breaking the rule in this way can lead to heavy penalties from the Financial Services Authority.

The regulator announced recently that it had secured its first bankruptcy order for someone who had cheated in their mortgage application.

This is after the rulebreaker in question, a mortgage broker, could not pay a previous financial penalty for fraud.

Neil Munroe, external affairs director at Equifax, said: "People are manipulating the information they put down to try to ensure that their application is actually accepted … people need the mortgage or need finance generally and, because of that need, are prepared to bend the truth."

He added: "We have tried to point out to people that they should try to avoid doing it at all costs, because it will get reported [and] the information does get shared. On that premise, it could be a downward spiral for getting credit because there is potential that, if possible fraud information is shared, then that will come up in further applications."

The total value of fraudulent mortgages in the UK stood at £36 million in 2008, according to accountants at KPMG.

Tags; Housing Debt and Bills, Young Family Finances, Credit Card Lifestyle, Recent Graduate Debt,

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