Mortgage fraud investigations
Mortgage fraud investigations have increased significantly in the last decade, ranging from wide scale conspiracies to an individual overinflating income on an application for a mortgage. Following the financial crisis of 2007/2008, many lenders have since cracked down on mortgage fraud and have been trawling through historic loans to assess their veracity. In particular, the Financial Conduct Authority (FCA), Serious Fraud Office (SFO) and the City of London Police have dramatically increased the volume of investigations into mortgage fraud.
What is mortgage fraud?
Mortgage fraud is generally defined as when an individual, or a number of individuals, defraud a financial institution or private lender through the mortgage process. This is a criminal offence and can carry with it a prison sentence. Organised crime groups may use mortgage fraud as a way to launder money; this is done by over-valuing properties, forged documentation or inflating the value of commercial property using fraudulent leases.
Types of mortgage fraud
There are varying types of mortgage fraud defined according to their motivation, but all involve misleading a lender about a material aspect of the property transaction in order to obtain the loan. Typically, there are two main types of mortgage fraud:
- False representation – which involves making false statements for gain that may cause harm to others
- Failing to disclose information – when filling out a mortgage you are under a legal obligation to disclose all relevant information. If you fail to do so for gain or to cause loss for another, this is a crime
However, whatever the type of mortgage fraud, the common factor is an intent to materially misrepresent or omit information on a loan application in order to obtain the loan or obtain a larger loan. Proceedings regarding mortgage fraud tend to not be limited to the borrower; they can involve all the people and professionals involved in obtaining the mortgage.
This can include:
- Mortgage brokers
- Financial advisors
- Estate agents
- Property developers
- Property investors
These professionals often face questions regarding what due diligence they could have reasonably been expected to have conducted. There is often a very complex trail of evidence to go through and, sometimes, vitally important documents can be missed by the investigating officers that can materially affect the outcome of a case.
This is often of pivotal importance when representing those charged with mortgage fraud and needs an understanding of the documentation involved. Often, there can be extensive email correspondence and telephone records to consider. This can be key evidence for the prosecution, but equally key to your defence if the context hasn’t been considered. We are experts at defending professionals and early intervention is critical.
Charged with mortgage fraud? How can we help?
At Stephensons, we have specialist mortgage fraud solicitors who have vast amount of experience when it comes to the kind of complex financial transactions that are often involved with mortgage fraud. The need to trace the money through various accounts is a skill essential for this type of defence. The paper trail can often lead to considering complex transactions involving money going into international jurisdictions and into offshore accounts. Knowledge of these areas is vital. Often there are charges of money laundering coupled with the fraud itself and it essential that individuals are properly advised by experts in that area. We have access to many expert witnesses to assist us in the preparation of your defence, including forensic accountants.
Individual home purchasers are more commonly accused of small scale of single domestic fraud or domestic fraud involving a limited number of properties. This is normally as a result of providing false information to obtain a mortgage. For a time self-certification mortgages were extremely popular and unregulated, often leading people to provide inaccurate information regarding their employment status, income, debts they owed etc. To wilfully provide false information is considered to be committing mortgage fraud.
Professionals who knew, or should have known, in their professional experience, that the transaction was fraudulent can also be under suspicion of participating in the mortgage fraud. It is not limited to self-certified mortgages and has occurred with other types of mortgage lending. We have the expertise to deal with all cases of mortgage fraud, no matter how large or small.
Early intervention is crucial, so we can start to defend you right from the first interview stage; call our expert mortgage fraud solicitors to see how we can help on 01616 966 229 or complete our online enquiry form.
Mortgage fraud sentencing in the UK
Mortgage fraud falls under fraud sentencing guidelines. Currently, the maximum sentence for fraud is ten years in prison, however, a sentence of this length will be reserved for very serious cases. Mortgage fraud penalties, if convicted, will depend on a number of factors, which generally include:
- The level of harm or intended harm to the victim
- The impact of the offence of the victim
- The amount of money that has been defrauded
- Whether or not there have been any aggravating factors (e.g. attempts to conceal or dispose of evidence)
- Any previous convictions
- Whether or not any other charges are also brought against you (e.g. money laundering)
You would ordinarily also receive a reduced sentence if you plead guilty or if the activity was originally legitimate. Depending on your case, if you are found guilty, you can expect to receive a fine, a community order or a custodial sentence. The courts can also seize any proceeds they deemed may have been made from the crime. Of course, the sentence received will be decided by a judge who will consider the specifics of your case and determine the sentence in accordance with the sentencing guidelines set out by the Sentencing Council.
If you’ve been charged with mortgage fraud or are being investigated by the FCA, SFO or the City of London Police, contact our experienced mortgage fraud solicitors today. We are recognised as one of the top law firms for mortgage fraud. Call us on 01616 966 229.