It has recently been publicised that millions of mortgages are in forbearance and millions more homes either in repossession or about to be repossessed. Even so, this is not stopping prospective homebuyers from falsifying mortgage applications to try to push loans so that they can purchase homes. It is currently estimated that of every 10,000 applications in 2011, at least 34 had been falsified in some way and were thus fraudulent. When compared to figures from 2006, fraudulent mortgage applications were more than double the 15 per 10,000 of that year.
In addition to increased fraud on mortgage applications, there is also a rise in fraud on applications for financial services such as insurance. According to reports, this is the fifth year in a row where consumers have been falsifying information on applications in an attempt to qualify for the loan. It is noted that at least 93% of these people did so by falsifying personal information such as their credit history, the real state of their finances and in regards to their employment and/or the amount of money they make.
The demographics of those most likely to attempt fraud of this nature are comprised of young professionals, dwellers of small towns and skilled middle age workers with skills. Part of the reason why people are taking such measures is because of the lack of availability of funds, the report goes on to say. Unfortunately, the problem may get worse before it gets better as mortgages will become even harder to get in the coming months or years as lenders have tightened qualification criteria due to the state of the economy at the moment.
In fact, mortgage rates will be rising as well which will then affect more than one million people who already have mortgages. Added to an already growing problem will be the FSA’s new plans tighten the reins on the mortgage lending industry to regulate irresponsible lending. Since 11 of every 10,000 people were found attempting mortgage fraud in 2011, it is feared the problem will only worsen this year as loans are harder to get.
