Landlord wants our help to convince mortgage lenders he lives here

DVardysShadow

barnaby-bear wrote: »

On average BTLers get repossessed more than Owner occupiers - the higher charge is to cover the on average higher risk.

That risk is the risk of repo. Not the risk of loss, because the mortgage provides a security which covers the risk of loss on repo.

The fraud is exposing the lender to that risk. The loss isn't the loss of the higher rate - but the average losses over all BTLers defaulting. Whether one particular BTLer meets the payments or intends to is irrelevent borrowing money on a single home you live in means you are less likely to default than someone who is risking having to cover the costs of two places.... it is fraud the loss is in the on average repossession / default costs.

If the lending is sound lending in terms of sound LTV and sound valuation, then the lender does not lose in the case of repo.

DVardysShadow

ILW wrote: »

I would suggest they are losing money. It could be read as they offer a reduced rate if you agree not to let. By taking that option and then letting, it could be considered fraud.

Or just breach of contract.

It is really hard to quantify an actual loss here. On repo, sound lending should ensure that the security covers both outstanding loan and costs. In the case of no repo, the loss amounts to a higher rate they charge, rather than any amount they lose to others.

Aside from the legalities, to me, this is very clearly a breach of contract, a civil matter, at least in the ethics of it. It is much harder for me to see this ethically as a crime. And I think it is really bad public policy to start calling 'crime' on what is essentially a breach of contract.

kunekune

DVS, I see you agree with some prominent criminal lawyers on this point ... But the law is what Parliament says the law is - this is statute, not common law - so we have to live with it. Sensible charging standards are probably being operated. I should add that my reference to bizarreness was based on conventional criminal law principles, and the idea that a criminal offence required an act and not merely bad thoughts, and the lack of any clear distinction between the attempt and the completed crime. It's kind of a technical objection, at least to the layperson.

PayDay

kunekune wrote: »

PayDay wrote: »

I googled mortgage fraud deception and came up with lot of hits.

That's why it's better to get your law from a lawyer rather from google! Yes, there used to be an offence called obtaining by deception. But trust me, honest, there isn't any more! You may well find references to it on the internet, but (a) journalists don't always use very precise language when they are talking about criminal law, they're not lawyers after all, and (b) it can take a while for a case to come to court, so some people will have been charged under the old law because their crime was committed before the new one came into effect.

The link I put in my post was to a government site. They must have been sent to jail under the old law.

I can't think why MPs would have wanted to remove 'obtaining money by deception' from the law.

poppysarah

whether you think it's dishonest or not (is it, morally and legally) then you've got to think what else he'll try and scam you on, and whether you should be supporting people who defraud tax payers (that's you and me).

kunekune

I can't think why MPs would have wanted to remove 'obtaining money by deception' from the law.[/QUOTE]

I'm not sure they really understood. TBH, they rarely do (at the risk of being naughty, perhaps if we paid them better ... but I won't go there). But ... basically, the new law is broader than the old law. So if it was already an offence, it will still be an offence. And some things that were unclear are now clearly offences. And some things that weren't criminal under the Theft Act 1968 ARE obviously criminal under the Fraud Act 2006. It's a "let's make more things criminal" kind of statute, rather than "let's make less things criminal". So if your worry is undercriminalization, stop worrying. If it's overcriminalization, join the queue.

PayDay

kunekune wrote: »

I'm not sure they really understood. TBH, they rarely do (at the risk of being naughty, perhaps if we paid them better ... but I won't go there). But ... basically, the new law is broader than the old law. So if it was already an offence, it will still be an offence. And some things that were unclear are now clearly offences. And some things that weren't criminal under the Theft Act 1968 ARE obviously criminal under the Fraud Act 2006. It's a "let's make more things criminal" kind of statute, rather than "let's make less things criminal". So if your worry is undercriminalization, stop worrying. If it's overcriminalization, join the queue.

I was thinking along the lines of your first point;)

DVardysShadow

poppysarah wrote: »

whether you think it's dishonest or not (is it, morally and legally) then you've got to think what else he'll try and scam you on, and whether you should be supporting people who defraud tax payers (that's you and me).

Eh? Where does defrauding taxpayers come into this? Perhaps we were on safer ground when we burned witches.

kunekune

I think she means that someone who is trying to avoid paying business rates for their mortgage is highly unlikely to be paying all the tax they owe (indeed, if they tried to, it might alert their bank).

silvercar

kunekune wrote: »

I think she means that someone who is trying to avoid paying business rates for their mortgage is highly unlikely to be paying all the tax they owe (indeed, if they tried to, it might alert their bank).

I take issue with this. People let without consent because circumstances force them to do so (eg relocation, can't sell, baby arriving, relationship breakups etc). The vast majority would still declare the income on their tax return (not least because for the majority letting without consent their mortgage is likely to be high and they will make a loss rather than a taxeable profit).

It is a big assumption to go from not getting a lender's permission to tax evasion.