Mortgage fraud on the rise as home buyers try to avoid affordability checks

July 14, 2014 by Brendan

Borrowers

According to e.surv, a property valuing company, there has been a recent increase in the number of mortgage applications being made fraudulently.

This is because of new rules introduced requiring would-be borrowers to prove they will be able to meet their mortgage payments if interest rates rise.

A director for e.surv, Richard Sexton, told Patrick Gower, reporting for Bloomberg, that people had started to apply for buy-to-let mortgages instead of standard residential options because they are not regulated in the same way, and allow buyers to avoid affordability checks.

The new mortgage regulations – which are part of a Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Review carried out by the Financial Conduct Authority (FCA) in London – came into effect in April this year. They are intended to tighten up lending practices and, hopefully, avoid the kind of activities that led to 2008’s credit crunch.

According to the Bank of England, since the affordability checks began, the number of mortgage approvals in the UK has dropped to its lowest figure in 11 months. In contrast, the number of buy-to-let mortgages approved during April was 43 percent higher than it had been at the same time last year.

With all of the recent changes in the mortgage industry, it can be tricky for home buyers to keep up and the demand for mortgage advisers is increasing. Fortunately, many more people are undergoing CeMAP training, from Leeds to London, with the aim of becoming qualified to provide that advice.