Connection between loan defaults and mortgage fraud

While lending requirements are becoming much stricter and consumers are finding it increasingly more difficult to get the loan according to their needs, the number of fraudulent loan applications has risen by about 2% in the first half of 2010.

It doesn’t come as a surprise that many of those applicants who have provided lenders with false information about their financial circumstances in order to get a loan approved in the past are currently facing loan arrears, defaults and repossessions, because it is finally beyond their financial means to keep up with their loan repayments.

The latest study carried out by CoreLogic Solutions has revealed that about two thirds of all borrowers who failed to make regular loan repayments and now risk losing their home, provided deliberately untrue information in their loan application.

Today, such levels of fraud are costing lenders millions of pounds annually. 

According to the estimations, out of all the repossession cases of 2010, about 6,500 have had false information in the loan application.
 


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