Identity theft threat to homes
Updated on 20 October 2008
Channel 4 News has discovered that mortgage fraud is booming as house prices continue to fall.
Mortgage lending has slumped to its lowest monthly level for more than three and a half years, hit by weak demand and the financial crisis.
But just as the appetite for risk has slowed, this programme has uncovered a huge rise in mortgage fraud.
As house prices continue to fall, the amount of fraud detected is likely to soar even further.
In fact one group of City analysts told us as many as 60,000 properties in the UK could have been acquired with fraudulent loans.
Mortgage fraud doubles
Channel 4 News has discovered that mortgage fraud is booming with ID theft as a major factor.
'In the 80s and 90s we saw a lot of property fraud, but what's different in the recent frauds is the explosion of ID fraud.'Forensic accountant Paul Doxey
The Land Registry has told Channel 4 News that in 2007-2008 it paid out almost £4m in compensation to lenders and defrauded homeowners, compared to just over £2m in 2006-7.
This Land Registry fraud is just one element in a worrying picture that is now emerging.
Paul Doxey, a forensic accountant, told Channel 4 News that as many as 60,000 properties in the UK could have been acquired with fraudulent loans.
He says "there's been a complete explosion in mortgage fraud".
Doxey added there's currently "probably over £7bn worth of fraudulent mortgages sitting on lenders' books. It could be much higher than that - as high as £17bn."
Doxey says the key factor is ID theft: "In the 80s and 90s we saw a lot of property fraud, but what's different in the recent frauds is the explosion of ID fraud.
"It's now a lot easier for criminals to obtain false IDs through the black market, which they can use as a cover for these frauds".
Fraud lawyer Gary Miller of Mishcon de Reya Solicitors, who helps lenders track down fraudsters, has also told Channel 4 News: "My experience tells me that what we see is the tip of the iceberg."
But he claims this is not a current priority for the police:
"Because of resource issues primarily, investigating and prosecuting property fraud has not been anywhere near high enough on the police agenda, and the reality is it is going to have to fall to the private sector if they're going to effectively combat property fraud."
