Home loan fraud losses
Mortgage lenders may face further losses from fraud
Experts warn of further home loan fraud losses
Mortgage lenders may face further losses from fraud committed by criminal gangs who targeted the home loans market at the height of the boom,
experts warned yesterday.
Last week Chelsea Building Society became the second lender to be hit by mortgage fraud, taking a £41m charge, which pushed the mutual into a first-half loss of £26m
The Chelsea said fraudulent buy-to-let loans were made between 2006 and 2008 on hundreds of properties, including many new-build homes in northern cities such as
Manchester and Leeds. Bradford & Bingley, the nationalised buy-to-let lender, also said this month it had set aside an extra £100m for potential losses from mortgage fraud.
Note from compliancetraining.uk.com:
(The society, the fourth biggest, lost £26 million, due largely to a £41 million charge relating to mortgage fraud on buy-to-let loans. The society lost £39.3 million last year as a result of exposure to failed Icelandic banks.
A massive injection of Regulatory Compliance, Mortgage Compliance, Insurance Compliance and Compliance Training would have prevented this and would cost less.
Little wonder CEO Richard Hornbrook made a sudden exit this month and the Chelsea stopped lending on buy-to-let property and self-certified mortgages. ).
Submitted by {Source : Financial Times page 3} on Tuesday 25th August 2009