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 Avoid Committing Mortgage Fraud

Avoid Committing Mortgage Fraud

How To Guard Against Mortgage Fraud

Following fresh warnings from the National Fraud Authority about the rising level of mortgage fraud in the UK, lenders want more done to protect their interests.

Mortgage fraud was a widespread problem before the financial meltdown and collapse of the property market back in 2007/8 due to the availability of self- certification mortgages with buyers, brokers and mortgage advisers able to ‘self-declare’ earnings with little, if any, proof required by an industry too busy to carry out proper rules and checks on applicants.

Mortgage fraud costs the industry around £1 Billion (GBP) a year, leading the Financial Conduct Authority to want to instruct mortgage lenders to better acquaint themselves with the solicitors they work with.

The new stricter mortgage rules introduced in the Mortgage Market Review in April 2014 are intended to reduce the number of people who attempt to make false claims and self-certification mortgages are now a thing of the past.

However, this won’t stop mortgage fraud or prevent homeowners and property investors from being a victim of identity or registration fraud.

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RICS Warns Of Another Property Bubble If Property Prices Increase By More Than 5%

RICS Warns Of Another Property Bubble If Property Prices Increase By More Than 5%

RICS Want To Cap Property Price Increases 

RICS want the Bank of England’s Financial Policy Committee (FPC) to consider limiting annual house price inflation to just 5% in order to prevent another housing bubble.

According to research by the Royal Institute of Chartered Surveyors (RICS), excessive property price growth and high mortgage lending have left the banking sector vulnerable and specific policy on limiting property price growth is required to prevent another property price bubble.

RICS have suggested caps on elements such as:

  • Loan-To-Value (LTV) ratios
  • Loan-To-Income ratios
  • Mortgage durations
  • Ceiling limits on the amount banks are permitted to lend (should prices exceed a given limit)

RICS reckon that by sending such a clear and simple statement to the public, indicating that the Bank of England (BoE) will not tolerate property price rises over 5%, would help restrict excessive price expectations across the country, preventing property prices from over-inflation.

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Is There A Dark Side To The Help-To-Buy Scheme?

Is There A Dark Side To The Help-To-Buy Scheme?

Is There A Dark Side To The Help-To-Buy Scheme?

The Government’s Help-To-Buy Scheme was intended to allow first time buyers to get on the property ladder with the hope that this would kick start the UK property market and it appears to be having the desired effect with increasing property transactions and the slow rise in property prices.

However, the Government intervention in the UK residential property market could have disastrous consequences for property owners and could even cause another property bubble.

The Government are spending huge amounts of money to aid first time buyers to get on the property ladder by offering low deposit, high loan to value, mortgages that are underwritten by the Government, effectively giving them a second charge on the property for a period allowing the owners to repay at a set rate per year.

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Welfare Reforms Could Increase Fraud

Welfare Reforms Could Increase Fraud

The Government’s controversial welfare reforms will leave the benefits system more vulnerable to fraud, according to a group of MPs.

The Government decision to press on with welfare reforms means that Universal credit is set to be implemented nationally from October 2013 and replaces a string of existing benefits such as local housing allowance (LHA), housing benefit (HB) and child tax credits.

Changes to IT system for universal credit could make it harder to distinguish fraudulent claims from those that are genuine, and there are calls for the government to give swift assurance that the introduction of Universal Credit will not cause a rise in benefit fraud,

MPs issued the warning after a report by the Communities and Local Government (CLG) Committee into the extent of the welfare reforms highlighted several concerns about the new Universal Credit scheme.

The first trial of the new system begins on 29 April 2013 in Ashton-Under-Lyne, Greater Manchester.

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