More people lying to get a mortgage.
Summary: New tougher lending rules mean more people are lying to try to secure a new mortgage.More people are lying on their mortgage application forms as they try to get around strict new lending criteria, according to a trade body.
The Council of Mortgage Lenders (CML) says its members have seen a surge in the number of applicants entering false details, especially exaggerating the level of their income.
The problem has apparently been exacerbated by a rush of buyers hoping to cash in on recent house price falls, at a time when funding remains in short supply.
CML spokeswoman Sarah Robson said: "We don't keep figures on mortgage fraud but from anecdotal evidence we do know that it has increased.
"That is to be expected as lenders' criteria has tightened and would-be borrowers who are cut out are trying to circumnavigate this. But lenders are vigilant to it, so they are picking it up."
Lenders increasingly favour borrowers with large deposits or high credit scores. In many cases, firms have also reduced the multiple of a borrower's income they are prepared to advance.
Latest figures from the CML show the average loan to income multiple for first-time buyers fell to 2.97 in May, down from a high of 3.39 in July and August 2007.
Lenders are also reporting many applicants are not disclosing all of their existing credit card or loan debts, fearing it may make the mortgage they are applying for look less affordable.
But lenders insist they are often picking up on such discrepancies by checking borrowers' credit files.
Independent Television News Limited 2009. All rights reserved.
Independent Television News Limited 2009. All rights reserved.
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| Publication: | Independent Television News Limited (ITN) |
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| Date: | Jul 16, 2009 |
| Words: | 288 |
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