Mortgage Fraud in the UK Free Essay Example, 5000 words

Other factors include mortgage fraud such as inflating property values carried out by corrupt surveyors (Mae 2007). In the United Kingdom, mortgage fraud is a growing problem in the sense that citizens want equity in their homes exceeding the loan on their assets. This is so because there is a lot of material misrepresentation of information regarding the mortgage loan when an applicant applies for the mortgage loan. The housing market in the United Kingdom is experiencing a boom and fraudsters in the mortgage market take this situation as an advantage with the aim of profit maximisation since they get higher loan than they would if the lender had all the information regarding mortgage loan application at hand. This paper sets out to review the types of mortgage fraud and evaluate whether mortgage fraud in the UK is a growing problem. Fraud is the deliberate dishonesty committed for unlawful or unjust gain (Financial Crimes Enforcement Network (FinCEN 2006). Fraud in relation to mortgages can be defined as fraud for property generally involving material misrepresentation or omission of informatio n with the intent to deceive or mislead a lender into extending credit that would likely not be offered if the true facts were known† (Mae 2007). We will write a custom essay sample on Mortgage Fraud in the UK or any topic specifically for you Only $17.96 $11.86/pageorder now According to Adrianne (2008) mortgage fraud is a criminal action with the intention of obtaining a loan or a larger one by failing to provide the lender with enough truth regarding the mortgage loan application through inadequate information or material misrepresentation. The citizens of United Kingdom need to understand schemes used by mortgage fraudsters so as to minimize the increasing cases of the criminal actions. Citizens need to understand property flipping as a scheme used by mortgage fraudsters (Adrianne 2008). It is not necessarily that property flipping is an illegal action but the manner in which the information is appraised makes property flipping an illegal action. In this case property appraisals are fraudulent done, for instance if land is bought and soled fast after being appraised for a higher dollar value then this is mortgage fraud. Also documents of loan involving the transaction are doctored; the income of the buyer is inflated. Further important definitions include; Mortgage lender: A mortgage lender is an investor that lends money secured by a mortgage on real estate (FinCEN 2006). Mortgagor: The person who mortgages the asset such as the borrower (FinCEN 2006). Mortgagee: The person to whom an asset is mortgaged i. e.