Massive fraud at building society

ruggedtoast

Thrugelmir wrote: »

House prices aren't of any interest to lenders, other than being used as security for the loan.

lol

.........................

brit1234

Buy to let (no money down) and self cert mortgages are the key reason property prices are overvalued, that why prices have a long way to fall.

There is the more comon mortgaeg fraud involving gift deposits where the lender is unaware the buyer is paying say 15% less thean they declared to the lender.

The other is when certain property companies uses there own surveyors to overvalue the property again to get round the deposit.

This also increases normal property prices as the overvalued value is used in the land registry figures which is then used to ascertain values of other properties against. Pushing prices up

PasturesNew

I always thought Chelsea were one of the harder ones to borrow from, one of the "safer bets". Obviously I was wrong.

tomterm8

Really2 wrote: »

You would have thought they instigated the valuations at least.

It's another "lax lending" story where a Building society does not seem to realize that perhaps they were actually not doing everything they could do to make sure they were ripped off.

I am not aware of what happened at this particular building society, but I personally believe that control frauds were prevalent throughout the propety market. It is strange how people always assume the fraud is committed solely by the BTLer, when it appears there was systemic fraud throughout the industry. on the face of it throughout the industry banks, building societies, credit rating agencies, and regulators, ran fraud friendly corporate government regimes. It seems this was international in nature, not just limited to the UK.

nearlynew

Liar Loans* were rife during the boom and were one of the main drivers of HPI.

Fact..





* copyright eric pebble at hpc

chucky

brit1234 wrote: »

Buy to let (no money down) and self cert mortgages are the key reason property prices are overvalued, that why prices have a long way to fall.

how did you finance your BTL portfolio Brit?

Brit1234 wrote: »

Do you know why he selling? There quit a few landlords I know selling now in Berkshire. I sold one of mine a few weeks ago to make my portfolio a little sturdier due to the climate.

http://www.landlordzone.co.uk/forums/showpost.php?p=48185&postcount=15

mewbie_2

Massive fraud at building society
It said the suspected frauds were mainly due to "the artificial inflation of property values by third-party professionals involved in the transactions", such as mortgage brokers and surveyors.

They (BTL mugs) paid too much - lol

Thrugelmir

PasturesNew wrote: »

I always thought Chelsea were one of the harder ones to borrow from, one of the "safer bets". Obviously I was wrong.

If you have collusion between sufficent parties then its impossible to stop fraud. Particularly if some are professionally qualified people. No doubt there was a solicitor involved for something of this scale.

Everyones human irrespective of their profession. Greed is human nature.

Count_Dante

Can I recommend a genuinely readable and interesting book about financial panics, called Panic: The Story of Modern Financial Insanity, edited by Michael Lewis. The last section goes into the mortgage crisis in the US, and much of it was caused by fraud and stupidity. Much like in this case.

http://www.amazon.co.uk/Panic-Story-Modern-Financial-Insanity/dp/0141042311/ref=sr_1_6?ie=UTF8&s=books&qid=1250855120&sr=8-6

shakerbaby

Really2 wrote: »

http://news.bbc.co.uk/1/hi/business/8213504.stm
Thought I would get in first to stop someone getting a few free thanks

The Chelsea building society has revealed it has lost £41m as a result of mortgage frauds by some of its buy-to-let borrowers.
The frauds are the main reason for the society staying in the red, with overall losses of £26m in the first half of the year.
Last year, the Chelsea lost £39m, the largest annual loss yet recorded by any building society

But on the other side of things if you lose £41m on fraud perhaps that tells you that you have not been checking people.

I always think this kind of loss is compleatly avoidable (To a point a bit of fraud will always happen).
Yes the people have lied, but if it is your money you are lending you should make sure in every possible way you will be repaid, not just take the applicants word.

Kind of ties in nicely with my Mortgage Madness 2003 thread. :eek:

http://forums.moneysavingexpert.com/showthread.html?t=1891869

Oh and quit being such a Thanks Wh0re.