BTL "fraud"

Guy_Montag

The City watchdog has weighed into the controversy over Britain’s booming buy-to-let market, revealing that it has uncovered a number of instances of buyers lying to bank lenders.

The rise in property prices over the past 10 years has encouraged a growing number of investors to buy rental properties. Last year saw a record 330,300 new mortgages taken out by landlords, a 57 per cent jump on the previous year, despite falling rental returns on such properties.

But the Financial Services Authority has warned that some prospective landlords have lied to lenders about their income level, pretending that they intended to live in the properties and even masquerading as first-time buyers.

Such behaviour, which “would constitute potential fraud”, would allow them to obtain bigger and cheaper loans, the FSA said.

FT article

Discuss!

thesaint

No sh*t Sherlock.

litaus

I wonder what the moral belief is on the forum - tenants should really excuse themselves, but owner-occupiers and BTLers, what do you think of the 'fraud'? Is it ok and just a fact of life if you want to buy property these days, or is it morally corrupt and 'something should be done' to stop the rest of the BTLers being tarred with the same, lying, brush?

I excuse myself on the grounds of my Tenancy AGreement (I'm too conformist anyway and wouldn't add anything to the debate).

lynzpower

I wonder whether this fraud has any PROVABLE correlation between the number of btl repos we are seeing at the moment. If thats the case, then I could guess that this has impact on interest rates ( im no expert) and affect mortgagees as a whole? Is this correct? Or am I confused again?

hearts

This is a capitalist society where money is (sadly) god in the eyes of many. We are brought up and taught this belief. So if people suddenly decide to break a few rules to get in on the act then Let him who is without Sin cast the first stone ;-)

Sapphire

If BTLs are committing fraud by stating falsely that their BTLs are their first homes to avoid paying tax, then I do object to this and hope the law will come after them. I pay tax - why shouldn't others?

Gorgeous_George

Indeed. Fraud is theft. Lying is always wrong. Lying to the Building Society is one thing that I wouldn't do but I don't care about one way or the other.

Tax fraud is another matter.



GG

Romani_Ite_Domum

It's not just BTL but all mortgage fraud in general. It time the FSA looked into this more and started penalising the lenders for allowing this.

If you lie on your mortgage application you push prices up for evryone else.
If you on your tax returns you are robbing schools and hospitals
If you lie on your insurace claims you are pushing up premiums for everyone else.
and so on

lie to buy has an affect on HPI. In fact the whole property market has been one big scam for years now.

rant over lol

lynzpower

If you lie on your mortgage application you push prices up for evryone else.
If you on your tax returns you are robbing schools and hospitals
If you lie on your insurace claims you are pushing up premiums for everyone else.
and so on

Pre MSE I bent the truth on my mortgage application form about how much debt I had. My parents were lending me 4k towards the deposit I would pay them back at 100 a month. I simply told my broker this was a gift and not a loan.

Do you think Ive "pushed prices up" by doing this.

To be honest, In this scenario, I dont know who youd prosecute- my parents for not telling my broker - my broker for not making me wear a jeremy kyle style lie detector or Abbey from whom I had no direct conversation.

Obviosuly Ive learned my lesson now, being an all copnverted moneysavingexpert and I wouldnt do it again... interested to know peoples views.

thesaint

lynzpower wrote: »

To be honest, In this scenario, I dont know who youd prosecute- my parents for not telling my broker No - my broker for not making me wear a jeremy kyle style lie detector No or Abbey from whom I had no direct conversation. No quote]

Only you for lying on your mortgage application form.;)

lynzpower

thesaint wrote: »

lynzpower wrote: »

To be honest, In this scenario, I dont know who youd prosecute- my parents for not telling my broker No - my broker for not making me wear a jeremy kyle style lie detector No or Abbey from whom I had no direct conversation. No

quote]

Only you for lying on your mortgage application form.;)

I was racking my brains then ( im going back to 2004 here, cant remember exactly whether I put it on my form as an "outgoing" or left it blank- given my parents did say they would be uber flex if I didnt want to pay them back I didnt have to :rolleyes: then I bet i didnt add it as an outgoing

OUt if interest what would peoples thoughts be on what sortof prosecution be appropriate? and who would execute those?