A recent report published by Experian has revealed that an increasing number of sole traders are providing fraudulent information in order to secure a mortgage.
The report revealed that when looking at the number of fraudulent cases across all financial products, the volume of them relating to mortgages was highest. For every 10,000 mortgage applications, 84 were fraudulent.
The increased regulation enforced following the Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget review of April 2014 has meant that all lenders must now carry out a much more detailed analysis of a customer’s income and expenditure, in order to assess how much they can borrow.
This has made it harder for all mortgage applicants, but in particular those who are self-employed on a sole trader basis. It is felt that this has been the trigger for the increased number of fraudulent applications being placed, as some sole traders are claiming to be an employee of the business as opposed to the owner.
Whilst there seems to be an increase in the number of self-employed people submitting fraudulent applications, the overall volume of fraud being detected within the mortgage sector of financial services has actually reduced slightly; back in the final quarter of 2013, out of every 10,000 applications, around 87 fraudulent ones were identified.
As a mortgage advisor, part of the processes you follow will be to identify, verify and check the income of your customer. Having finished your CeMAP training and passed the exams, you will need to document the evidence you have seen to confirm the validity of the source of income.