Organised crime turning to mortgage fraud

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The Independent Online

Mortgage fraud in the UK totalled £700m last year, the Association of Chief Police Officers said yesterday in a report that warned organised crime groups were increasingly targeting home loan providers.

Mike Bowron, the commissioner of the City of London police force, said mortgage fraud had become increasingly popular with criminals because there was currently a relatively low risk of detection and the potential for very large profits. Criminals are also using the property markets to launder the proceeds of illegal activities, including the supply of drugs, people trafficking and prostitution, he said.

Mr Bowron added: "Organised mortgage fraud can take many forms and while difficult to measure accurately, it remains a significant element of the UK's annual fraud losses."

The Acpo report says corrupt property professionals including surveyors, mortgage brokers and solicitors are facilitating frauds. Common crimes include surveyors deliberately over-valuing properties, applications made on the basis of forged documentation and the use of fraudulent lease contracts to inflate the value of commercial property artificially.

The police report follows a similar warning from the Financial Services Authority last month. The UK's chief City regulator, which has now established a joint intelligence operation with City of London police to investigate mortgage-related crime, said it was increasingly concerned about the problem.

The FSA said it had received more than 200 referrals from lenders suspicious about potentially fraudulent mortgage brokers over the past 18 months. It is currently investigating more than 70 firms and individuals. The regulator believes the average fraud is for £45,000.

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