What actually happens if you rent out your property and don't tell the lender?

moneysaver45

brit1234 wrote: »

No that's the law not scare mongering. You won't go to Magistrates Court, you go to Crown Court for trial because it gives longer sentences. Magistrates court is limited to 6 month prison sentences and I have never had a fraud case which hasn't gone to Crown Court.

Fraud by false representation

(1)A person is in breach of this section if he—

(a)dishonestly makes a false representation, and

(b)intends, by making the representation—

(i)to make a gain for himself or another, or

(ii)to cause loss to another or to expose another to a risk of loss.

(2)A representation is false if—

(a)it is untrue or misleading, and

(b)the person making it knows that it is, or might be, untrue or misleading.

(3)“Representation” means any representation as to fact or law, including a representation as to the state of mind of—

(a)the person making the representation, or

(b)any other person.

(4)A representation may be express or implied.

(5)For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).

Say that I was scaremongering to the Crown Court Judge.

The reality is no mortgage lender is going to make a complaint. Think about it. They make a complaint, the mortgage holder goes to jail, and thus cannot pay the mortgage anymore. The lender therefore loses out too. They're obviously not going to do that if the mortgage has always been paid on time. You're scaremongering.

MissMoneypenny

moneysaver45 wrote: »

Hi everyone,

I'm thinking about buying a property to rent out, but I don't want to pay the ripoff interest rates of a buy to let mortgage compared with a residential one. If I told the lender I was going to live in the property, and so got granted a residential mortgage, is there any realistic way they would actually find out?

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


I'd just like to know if there's any realistic chance of the lender finding out, and if so, what the 'sanctions' could be. Cheers.

I'll let you know. I reported someone for this, yesterday; to their lender and HMRC.

sharpee

moneysaver45 wrote: »

The reality is no mortgage lender is going to make a complaint. Think about it. They make a complaint, the mortgage holder goes to jail, and thus cannot pay the mortgage anymore. The lender therefore loses out too. They're obviously not going to do that if the mortgage has always been paid on time. You're scaremongering.

The lender will not lose out they will repossess your house

moneysaver45

GAH wrote: »

Read my last post OP, i said it was a different scenario but it is still fraud all the same.

If you can afford whatever penalties are thrown at you, then go for it.

If your the sort of person that is happy to do this though, i would imagine you are the sort of person that would probably think having a Gas Saferty record done too is a waste of time.

I would of course get the Gas Safety done, as that could kill someone if it's not properly looked after. That's quite a bit different to not paying a bank an even more entortionate rate of interest.

This is the problem with this country. We live in a communist state who seek to take all wealth from private enterprise out of the hands of normal people and give it to banks (which are mostly owned by the state). If interest rates were reasonable, and thus allowed for private enterprise and reasonable profit to be made, there'd be no reason to do this. But an interest rate 2% (or higher) than a normal mortgage is socialism and is designed to rob the hard working British citizen of his money. In such circumstances, you need to try and get the best deal possible for yourself.

Yorkie1

moneysaver45 wrote: »

I do not believe for one second you would go to prison for this so-called 'crime'. That is scaremongering. The difference in profit between a residential mortgage and a buy-to-let is substantial enough to make a big difference, we're not just talking about a couple of hundred quid here.

Perhaps you should take the time to acquaint yourself for the penalties for mortgage fraud then.

Sentencing guidelines pages 23-24.

For a fraudulent single mortgage application of over £100K from the outset you're looking at over 1 year's custody.

moneysaver45

Yorkie1 wrote: »

Perhaps you should take the time to acquaint yourself for the penalties for mortgage fraud then.



For a fraudulent single mortgage application of over £100K from the outset you're looking at over 1 year's custody.

Probably get a suspended sentence as a first offence. Plus if the worst came to worse, plead guilty and then time off for good behaviour and you knock that down to about 4 months.

Not that I think it would ever happen anyway. I've never heard of anyone going to prison over a mortgage!

DVardysShadow

Yorkie1 wrote: »

Perhaps you should take the time to acquaint yourself for the penalties for mortgage fraud then.

Sentencing guidelines pages 23-24.

For a fraudulent single mortgage application of over £100K from the outset you're looking at over 1 year's custody.

Perhaps a moment to reflect on this. Mortgage fraud is generally reckoned to be taking out a loan on a property and disappearing with the money, the pecuniary advantage being the amount of the whole mortgage.

In this particular case, the pecuniary advantage is the difference between residential and BTL rates on a mortgage. So, I don't think we are looking at a year for £k100. But beyond this, I would invite OP to consider how much they are defrauding and apply the sentencing guidelines accordingly

DVardysShadow

Werdnal wrote: »

Many savvy tenants ask for proof you have consent to let or a BTL mortgage. No proof, no tenant.

You are painting a somewhat too black picture here, True enough, the more savvy tenants will look for proof. When they go away disappointed, there will be the less than blue chip tenants who will take a punt on this. Depends whether you want less than blue chip tenants.

moneysaver45

DVardysShadow wrote: »

Perhaps a moment to reflect on this. Mortgage fraud is generally reckoned to be taking out a loan on a property and disappearing with the money, the pecuniary advantage being the amount of the whole mortgage.

In this particular case, the pecuniary advantage is the difference between residential and BTL rates on a mortgage. So, I don't think we are looking at a year for £k100. But beyond this, I would invite OP to consider how much they are defrauding and apply the sentencing guidelines accordingly

Pretty sure it would be in the '£5,000-20,000' range, assuming it was done for a few years. The sentencing for that is pretty minimal (not that I think they'd prosecute to begin with tbh).

You are painting a somewhat too black picture here, True enough, the more savvy tenants will look for proof. When they go away disappointed, there will be the less than blue chip tenants who will take a punt on this. Depends whether you want less than blue chip tenants.

I'm not too worried about the tenant. They would be a family member and I'm certain they wouldn't smash things up etc.

jjlandlord

Of course, one should get consent to let/BTL mortgage to avoid putting oneself in more trouble than it's worth.

Still, I find it fascinating that every time that the subject of consent to let from lender pops up so many people rise to the defense of the banks' interests.