CML Concerned Over Mortgage Fraud

Posted 2008-02-14

According to Council of Mortgage Lenders (CML), the trade association for the mortgage lending industry, U.K. mortgage lenders want increasingly tighter rules so that mortgage fraud is reduced. Specifically, the mortgage lenders are upset about sales of newly built city centre flats.
Mortgage lenders are concerned that in the current unstable property market conditions, developers are offering deals of buyers that inflate the new home’s cost. Many of these deals include cash-back offers, free holidays, paid legal fees, and buying white goods.
The CML publication states, “In recent years, discounts and incentives have had the effect of making the real value of new homes less than transparent. This is bad news for genuine buyers and for lenders. Buyers may find themselves with a mortgage worth more than the property’s value, while lenders may find themselves exposed to fraud and the risk of loss.”

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