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What Is Mortgage Fraud?

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Mortgage fraud is a criminal offence whereby someone obtains a mortgage by providing false information in relation to a mortgage application. This is sometimes called ‘obtaining a mortgage by deception’. Even the smallest piece of false information on a mortgage application could potentially be considered mortgage fraud and the penalties can be very serious. We have several years of experience in dealing with very complicated fraud and mortgage fraud cases.

If you are concerned that you may have committed mortgage fraud, you have been contacted by your mortgage provider about possible fraud, or you have been arrested or charged with a mortgage fraud offence, then it is essential to understand how these offences work.

Here, we discuss what the types of mortgage fraud are, how organised crime gangs use mortgage fraud, how mortgage fraud is detected, who investigates mortgage fraud, what the potential penalties are and why speaking to a solicitor is so essential.

While we hope this information is useful, please note, it should not be taken as legal advice. If you need legal support with an allegation of mortgage fraud, then please get in touch and our team can advise you.

What are the types of mortgage fraud?

There are two main types of mortgage fraud committed by individuals – where the borrower provides false information when making an application (mortgage application fraud) and where they fail to notify their lender of a change in circumstances that the lender is entitled to be informed of. This is often referred to as ‘opportunistic mortgage fraud’.

There are also various types of mortgage fraud that may be committed by organised crime groups, for example, where the purchase of a property is used as a means of money laundering. This is sometimes referred to as ‘large-scale mortgage fraud’.

Falsifying information on a mortgage application could involve a borrower being dishonest at the application stage about information such as:

  • Their income
  • Their employment situation
  • Their credit history
  • Their debts and other financial liabilities
  • What they intend to use the property for
  • Any other information the mortgage provider requests that might affect their lending decision

A borrower may also be committing mortgage fraud if they fail to update their lender about any change in circumstances that they are required to disclose e.g. loss of income or change of use of the property.

These are only some potential examples of mortgage fraud, so it is important to get specialist legal advice if you are concerned that you may have committed an offence.

It is also important to note that mortgage fraud could involve providing false information (e.g. overstating your income) and failing to provide relevant information (e.g. that your employment status is likely to change in the near future).

How do organised crime groups use mortgage fraud?

Mortgage fraud is a common tactic by organised crime groups seeking to launder money. They can use various tactics, including over-valuing properties, forging documents and using fraudulent leases to suggest that commercial property is more valuable than it truly is.

Mortgage fraud involving organised crime groups is often connected to various other types of criminal activity and even those who are only peripherally involved can potentially still face criminal charges under conspiracy laws.

How is mortgage fraud detected?

Mortgage fraud cases are detected in a number of ways. Lying on a mortgage application is often picked up by the standard credit checks that all lenders carry out as well as through the Mortgage Verification Scheme run by HMRC, UK Finance and the Building Societies Association (BSA).

Various other types of suspicious activity could also trigger a mortgage fraud investigation, including where a property is remortgaged and/or sold more often than seems plausible, where the purchase price significantly increases for no obvious reason, where the deposit is paid by a third party with no clear connection to the buyer and where the proceeds of sale are transferred by the buyer to someone other than the seller or their solicitor.

Who investigates mortgage fraud?

In the first instance, mortgage fraud is likely to be investigated by the lender who provided the mortgage. If they believe there is evidence of mortgage fraud, then they will generally hand the investigation over to the police.

As mortgage fraud is a criminal offence, ultimately, it will be for the police to investigate and bring charges if they believe an offence has been committed.

What is the penalty for mortgage fraud?

The penalty for mortgage fraud will depend on the circumstances. Opportunistic mortgage fraud committed by individuals will normally be treated much less severely than large-scale organised cases of mortgage fraud.

For individual cases of opportunistic mortgage fraud, the most likely penalty is that you will be required to repay the mortgage to your lender and, if you cannot do so, your property may be repossessed. You will not necessarily be charged with an offence or face criminal proceedings in these cases.

For more large-scale, organised mortgage fraud, it is likely that those involved will be charged with a criminal offence, such as Fraud by False Representation or Fraud by Failing to Disclose Information. On conviction, the penalty for this type of mortgage fraud could include substantial fines and the possibility of a custodial sentence.

Credit for guilty plea

In short, where a guilty plea is indicated at the first stage of proceedings, you could receive a reduction from 1/3 of penalty.

More information regarding the potential outcomes for indicating a guilty plea can be found here.

Should I speak to a solicitor about allegations of mortgage fraud?

As mortgage fraud is a criminal offence, it is strongly recommended that you speak to an experienced criminal defence solicitor as soon as possible.

If you have been arrested or are due to be interviewed under caution voluntarily, then you should always have a solicitor present to advise and represent you. Without a solicitor, there is a very real chance that you could say or do something that seriously harms your defence.

You can also speak to a solicitor at an earlier stage. If you are concerned that you might be under investigation for mortgage fraud, then a solicitor can provide early advice on your options. They can support you during any investigation, making sure you comply with your legal obligations while not doing anything to damage your legal position.

In some cases, the best strategy may be to admit an offence early on as this can minimise any penalties you receive. There may also be the option to plead guilty to a lesser charge, again, reducing the potential penalties. This is something on which a solicitor can advise and is not a decision that should ever be taken without proper legal support.

At JD Spicer Zeb, our expert criminal defence solicitors have more than 45 years of specialist criminal defence expertise and are Law Society accredited in Criminal Litigation. We can, therefore, offer clear, effective legal advice and representation for all manner of criminal matters, including mortgage fraud.

Related offences

Please note that our expert solicitors also provide advice and support with various related offences, including:

Fees and funding

We are transparent on costs at all times, no matter your circumstances.

If you need to attend court, legal aid public funding will be available in some cases, based on the seriousness of the case justifying the grant of public funding.

For clients who do not qualify for legal aid public funding, the alternative option will be to fund their case privately.

To find out more about the way we handle fees (both legal aid public funding and private fees), please use the links provided below:

Speak to our criminal lawyers today

If you are due to attend the police station for interview for allegations of mortgage fraud, or require any urgent specialist advice, immediate representation, please do not hesitate to get in touch.

You can contact our specialist criminal defence lawyers in London, Birmingham and Manchester by telephone on:

Or email: solicitors@jdspicer.co.uk

Alternatively, you can fill out our quick online enquiry form, and we will get back to you quickly.

24/7 legal representation for mortgage fraud investigations

Please get in touch for a free consultation with one of our expert criminal defence solicitors, as well as immediate representation and advice for the allegations you may be facing.

We are available to represent clients all over England and Wales at any time, so please contact our Emergency Number at 07836 577 556.

How can we help?

Common questions

We always work with the most experienced and best leading UK barristers, KCs (Kings Counsel). We cover all criminal cases 24/7 at the police station and court. Offices in London, Birmingham, and Manchester cover cases across England and Wales. We can offer Legal Aid and affordable Private fee agreements. We can see you the same day, including virtually. Our Senior Partners supervise all of our cases.

How quickly do you respond?

We respond quickly even during out of hours. We do not get our work by paying for online adverts but based on the fact that few criminal law firms can match our 45 years of experience. Most of our cases are still from word-of-mouth recommendations from satisfied clients. We are called daily by dissatisfied clients from firms with less experience than us. We respond very quickly to new enquiries. We know what clients seek and so we update clients rapidly.

Can you get cases dropped?

Yes, read about the recent cases we've helped our clients with here.

We always keep you updated and give straightforward advice. We will get cases dropped early where the case is weak or should not be prosecuted. We will be upfront with you about where you can benefit from a good result with an early guilty plea, such as a discount on your sentence. As we work on cases across all levels with clients from all walks of life, we are excellent at giving clear, spot-on advice. As an established firm, we can allocate a whole team to your case often at short notice to secure evidence to minimise the damage to you. 

Have you won any awards?

OUR PROFESSIONAL BODY THE LAW SOCIETY AWARDED US IN OCTOBER 2020 WITH THE EXCELLENCE IN CLIENT SERVICE AWARD AND STATED - 

"JD Spicer Zeb demonstrated a clear commitment to client service through their work with vulnerable and diverse individuals in what can be severely traumatic circumstances".

Do you offer free consultations?

Where it is possible, we aim to provide an initial consultation to you. If we can speak to you, we can if required inform you about  –

  • Whether we can take the case on and our relevant experience.
  • Public and private funding benefits.
  • Assistance in applying for legal aid where we are likely to accept instructions.
  • An outline of options in police interview only. We will not advise you on which option to adopt.
  • Providing our free written guide explaining the police station process.
  • The gravity of routine and day-to-day offences you face.
  • Consequences of not attending the court or police station.
  • Consequences of interfering with any witnesses.
  • Retaining any evidence in support of your case.
  • If possible an outline of the elements of the offence that the police or CPS must prove.
  • This consultation will normally be by telephone or email and will only be for as long as we deem necessary to establish if we can act for you. If we cannot usefully give you any advice in this manner then we will not continue with the consultation. We will not discuss the case in depth for you to be able to decide on your plea or any significant aspect of the case, as this cannot be undertaken informally.
  • Referring you, if possible, to other firms for matters out of our specialism or if we cannot help.

Consultations do not apply to the following cases –

  • If we do not intend to take the case on.
  • Road Traffic cases, drink driving, drug driving, driving bans, speeding, no insurance, mobile phone use, points etc.
  • In all cases where we do not have the capacity to take your case or the availability of suitably qualified staff to provide an initial free consultation. This is applicable in all cases but especially where a more senior lawyer is required because of your personal needs or the complexity of the case.
  • Harassment/stalking/ coercive behaviour/malicious communications or road traffic cases and most sensitive cases. These cases are often too complicated to assess in short consultations.
  • The locations concerned may be too distant to represent you adequately or it may not be cost-effective for you or us.
  • The case is too complicated to assess or raises various charges or facts, complexity, or history to be considered informally or in a short consultation.
  • In most Legal aid transfers where legal aid is granted to another firm except in very grave cases, we may assess the case and merits for a transfer.
  • If your relationship has broken down with your existing solicitor or several solicitors.
  • If you have been released under investigation and have already had a police station attendance. 
  • If you hold legal aid with another firm and seek a second opinion.
  • If you are calling on behalf of the client as a friend or family member unless you have full authority and full facts.
  • To businesses.
  • Advising whether you were given good advice by your other solicitor.
  • Whether to decide to plead guilty or not guilty.
  • Whether you have an arguable defence in law or factually complicated defences.
  • Any advice you have had after your first court appearance.
  • Any advice on appeal on conviction or sentence.
  • If we feel we are unable to communicate with you.
  • If we are likely to be conflicted or breach our professional rules.