Rising numbers of secret landlords drive mortgage fraud

November 20, 2013 Leave a comment

November 20, 2013 12:02 am

Rising numbers of secret landlords drive mortgage fraud

By Kate Allen

More homeowners are fraudulently subletting properties without their mortgage lender’s approval, according to new figures from Experian, the credit checking agency. Renting homes out without permission from lenders was the biggest driver of mortgage fraud in the first six months of 2013, Nick Mothershaw, director of identity and fraud at Experian, said.Mortgages account for the highest rate of fraudulent applications across all financial services, according to the agency.

A senior police officer warned last month that the government’s Help to Buy scheme could cause a sharp rise in such fraud. Levels have already risen substantially in recent years, from 15 out of every 10,000 applications in 2006 to 31 in the first six months of 2013, the Experian data showed.

However, the overall level of mortgage fraud fell slightly year-on-year. Mr Mothershaw said the growth “seems to be steadying off a bit recently”.

Banks have tightened their lending criteria in recent years as a result of the credit crunch, making it harder to obtain mortgage finance. This has driven more people to mislead lenders when applying. Mr Mothershaw said: “A mortgage is hard to get these days, and most fraud simply involves people lying about their employment, personal circumstances or credit history in an attempt to access credit.”

The recent increase may be due to better detection procedures by lenders; the Experian data only reflect unsuccessful fraud attempts that were detected.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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