Mortgage fraud, what will they do?

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  • IAmWales
    IAmWales Posts: 2,024 Forumite
    Beetroot24 wrote: »
    How did you pass the affordability when you switched the mortgage, if you can't afford to live there??

    In case you missed it OP ...
  • JohnnyDancer
    JohnnyDancer Posts: 18 Forumite
    IAmWales wrote: »
    In case you missed it OP ...
    I still had my job as a teacher for another few months.
  • JohnnyDancer
    JohnnyDancer Posts: 18 Forumite
    glosoli wrote: »
    Can't you just sell it?
    I couldn't afford the mortgage payments whilst it was on the market. So I thought stick tenants in it, then move back in when my luck changed.
  • glosoli
    glosoli Posts: 739 Forumite
    First Post Combo Breaker First Anniversary
    edited 11 September 2017 at 8:05PM
    The only thing standing between you and big trouble is a lender conducting an audit check of their mortgage book, and it will quickly come to light that your property is rented out. You may have missed it so far but eventually it will catch up on you. As as much sympathy as I have regarding the mental health issues and alcoholism, to be blunt I don't think they will have much sympathy at all, as after all you have lied to them. Luckily you still have time to sort it out and do the right thing, for if you don't then you will likely get a CIFAS, which has implications for the next six years and may entail having all of your existing accounts closed down (i.e current accounts), and essentially be blacklisted for the next six years. What is more trouble, selling the property or that?

    I used to work in the mortgage services department of a lender back in 2009 ish, when the base rate went to rock bottom. There was suddenly great profits to be made in people renting out properties which had old lifetime base rate trackers. It was remarkably easy for a lender to quickly check the electoral register and to investigate further.

    Not to mention you are acting irresponsibly by having a property with insurance which is likely to be invalid. What would you do if the property burned to the ground tomorrow due to reckless tenants and the insurer refused to pay out?
  • silvercar
    silvercar Posts: 46,955 Ambassador
    Academoney Grad Name Dropper Photogenic First Anniversary
    Is there any equity in the property?

    I would:
    a) see a mortgage broker who will know whether a BTL mortgage is possible. If it is then remortgage with the new lender and the problem is solved. No lender is going to retrospectively chase you when you are no longer a customer. I suspect that you may struggle finding a BTL mortgage without owning your own home as well as the shared freehold issue.
    b) if there is no mortgage possible then you need to consider selling up. It is a shame you remortgaged as there was definitely deception at the point, whereas you obtained the original mortgage in a more honest way.

    Also I would now contact hmrc and own up to the undeclared tax. By the time you tot up allowable expenses, including interest on the mortgage, the bill may be small. Though there will be penalties, they will be smaller than if you were discovered and chased by hmrc.

    Thirdly, look after yourself. These are money problems and will have a solution. You need to look after your mental and physical health too.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • JohnnyDancer
    JohnnyDancer Posts: 18 Forumite
    glosoli wrote: »
    The only thing standing between you and big trouble is a lender conducting an audit check of their mortgage book, and it will quickly come to light that your property is rented out. You may have missed it so far but eventually it will catch up on you. As as much sympathy as I have regarding the mental health issues and alcoholism, to be blunt I don't think they will have much sympathy at all, as after all you have lied to them. Luckily you still have time to sort it out and do the right thing, for if you don't then you will likely get a CIFAS, which has implications for the next six years and may entail having all of your existing accounts closed down (i.e current accounts), and essentially be blacklisted for the next six years. What is more trouble, selling the property or that?

    I used to work in the mortgage services department of a lender back in 2009 ish, when the base rate went to rock bottom. There was suddenly great profits to be made in people renting out properties which had old lifetime base rate trackers. It was remarkably easy for a lender to quickly check the electoral register and to investigate further.

    Not to mention you are acting irresponsibly by having a property with insurance which is likely to be invalid. What would you do if the property burned to the ground tomorrow due to reckless tenants and the insurer refused to pay out?
    With your experience, do you think they will call in the loan?
  • JohnnyDancer
    JohnnyDancer Posts: 18 Forumite
    no equity in the property.
  • silvercar
    silvercar Posts: 46,955 Ambassador
    Academoney Grad Name Dropper Photogenic First Anniversary
    JohnnyDancer wrote: »
    no equity in the property.

    You won't get a BTL mortgage without a sizeable deposit. So your options are very limited (unless you have savings to use).

    So the only options seem to be to continue as you are now with a residential mortgage or let the tenants go and sell quickly. I suppose the third option is to hand the keys back to the lender and walk away.

    Mortgage issues aside for the moment, you should come clean with hmrc and sort your tax situation.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • csgohan4
    csgohan4 Posts: 10,587 Forumite
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    JohnnyDancer wrote: »
    With your experience, do you think they will call in the loan?



    I think your walking on thin ice and forever looking over your shoulder. Is losing everything and not being able to get a mortgage for a long long time worth what your doing now?


    Being on a national fraud register is not something to take lightly, you are also committing insurance fraud as well and may make you getting any kind of insurance difficult at best


    Declare the tax and either sell the flat or get a consent to let. Burying your head in the sand will not do you any favours.


    Do you really want to get a dreaded HMRC investigation or a letter demanding the whole loan come through?


    Do it for the sake of your tenants, as if your not declaring tax, what else are you skimping on? Gas safety check ? e.t.c
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • macman
    macman Posts: 53,098 Forumite
    Name Dropper First Post First Anniversary
    If I understand correctly, you've knowingly committed mortgage fraud and tax evasion for 2 years-so what has changed for you to now ask at this point 'what will happen'?
    I'm still not clear if the deposit is protected, and if the property has a valid gas safety certificate (if required). The latter is a very serious offence, so get that sorted as a priority.
    No free lunch, and no free laptop ;)
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