Advice on possible mortgage fraud

Bemzil1

Hi it's my first time on here ,
I'm looking for some advice for my step son . Ok here goes . My step son is 19 and about a year ago has taken out a mortgage on behalf of his mother and step father who already own their own house . My step son is quite naive , he had epilepsy as a child and although he is fit free now after an op , he needs support with finances and is not what I would call clued up .

He disclosed this information to me and his dad about 2 months ago , which worried us as we didn't feel he knew the consequences of what he had done .
This second home is not lived in by him , but it is rented out . He receives no money from this she gets it all . When he told us this we checked on land registry and sure enough the deeds are in his name . The mortgage lender being bank of Scotland . He does not pay the mortgage she does , apart from his name on the mortgage she deals with the rest . We are also concerned as to how he actually got the mortgage being on a 22 hour contract on minimum wage , the deeds say the house amount was 44000 pounds .
His mothers husband is self employed and on land registry only his name is on the house they live in . She has always had poor credit so I'm not sure if this is why she is on neither mortgage .

My step son rents a room in a private house from a private landlord , he has been doing temporary work and told us last night he has been laid off . He has put in an online claim for job seekers and housing benefit, this has added to the worry for us as now wouldn't he be making a fraudulent claim for HB if he has a mortgage / house in his name ?

I have real concerns as I personally feel he has been taken advantage of by his mother , she has not explained anything to him . We feel disgusted that she would use him to gain money and I assume avoid tax . She is quite manipulative , and seems to manage to convince him she's doing nothing wrong . Although when he did disclose this information he said she had asked him not to tell us as if he died we would get the house and it's hers ! Couldn't believe that . Anyway any advice would be very helpful .
What can we do to help him sort this out ?

Thanks

Pixie5740

I think you're right to be worried. I would also be concerned about his status as a landlord and the tax implications for him. Could you and his father talk to his mother and step-father to find out what is going on?

Old_Git

Bemzil1 wrote: »

Hi it's my first time on here ,
I'm looking for some advice for my step son . Ok here goes . My step son is 19 and about a year ago has taken out a mortgage on behalf of his mother and step father who already own their own house . My step son is quite naive , he had epilepsy as a child and although he is fit free now after an op , he needs support with finances and is not what I would call clued up .

He disclosed this information to me and his dad about 2 months ago , which worried us as we didn't feel he knew the consequences of what he had done .
This second home is not lived in by him , but it is rented out . He receives no money from this she gets it all . When he told us this we checked on land registry and sure enough the deeds are in his name . The mortgage lender being bank of Scotland . He does not pay the mortgage she does , apart from his name on the mortgage she deals with the rest . We are also concerned as to how he actually got the mortgage being on a 22 hour contract on minimum wage , the deeds say the house amount was 44000 pounds .
His mothers husband is self employed and on land registry only his name is on the house they live in . She has always had poor credit so I'm not sure if this is why she is on neither mortgage .

My step son rents a room in a private house from a private landlord , he has been doing temporary work and told us last night he has been laid off . He has put in an online claim for job seekers and housing benefit, this has added to the worry for us as now wouldn't he be making a fraudulent claim for HB if he has a mortgage / house in his name ?

I have real concerns as I personally feel he has been taken advantage of by his mother , she has not explained anything to him . We feel disgusted that she would use him to gain money and I assume avoid tax . She is quite manipulative , and seems to manage to convince him she's doing nothing wrong . Although when he did disclose this information he said she had asked him not to tell us as if he died we would get the house and it's hers ! Couldn't believe that . Anyway any advice would be very helpful .
What can we do to help him sort this out ?

Thanks

contact the tenant of the house he owns .Give them his bank details ,tell them to pay him .
How much is the house worth now ,can he sell it.

Caz3121

there are a number of issues here
Housing Benefit claim form will ask if he owns other property - he needs to answer "yes" otherwise this would be fraud
He would be liable for tax on income from the rent (minus interest and expenses)
The mortgage may have been taken as a residential mortgage rather than a BTL and the lender may not have given consent to let

neas

I'm not sure this is as bad as you make it out though. This is your view (which will most likely be biased because of the whole step mon/step father split business).

WHat we have here is a lad who parent guided him to buy a buy to let property, and whose parent + step parent are managing for him on a day to day basis. in 10 years he will still be on the land registry and mortgage but the house will have appreciated thousands of pounds.

Unless they forced him to gift back the earned cash, he would stll be financially better off.

She takes all money, because they probably gifted him 5-10% of the house value in deposit (he doesn't sound like he has the means to save the deposit).

From my perspective it looks like a well meaned attempt at increasing your stepsons wealth and position for when he is 30 years old and starting a faimily. If all goes well he will have a tidy deposit for his own family house.

You know what I mean? In 10 years when the equity is worth £30k, he could sell it and has got £30k for nothing. Sure it affects his housing benefit but I can't believe its as bad as you are portraying .

Maybe you could help him get a 2nd house and then you would be even with them?

fairy_lights

neas wrote: »

From my perspective it looks like a well meaned attempt at increasing your stepsons wealth and position for when he is 30 years old and starting a faimily. If all goes well he will have a tidy deposit for his own family house.

Really? It reads to me more like the mother wanted a buy to let to increase her own wealth but couldn't get a mortgage in her own name. Hence telling her son not to tell the op because the house is hers, not his.

Bemzil1

Hi thanks ,
Neas I can see where you are coming from , but is this still not fraud if she is taking the profit and not declaring it ? Also my concern is if it was done purely for his gain why does she not let him live in it ? Or rent a room in it ? She asked him to leave her house as she said she no longer had room for him ? He has spent periods of time with us until he rented privately . She has six children and an elder sister , she's not brought her a house ?
I do agree that it's hard not to be biased in my situation which is why I have asked for advice to put a better spin on things .
Thanks for your advice , I will bear this in mind .
I am often the mediator for my husband as they don't get on together , I am thinking about approaching her to see what her story is . I'm afraid I still feel uncomfortable with this . She is aware he is applying for housing benefit but has not explained to him that this would be fraud by himself which could get him into big trouble .

Bemzil1

fairy_lights wrote: »

Really? It reads to me more like the mother wanted a buy to let to increase her own wealth but couldn't get a mortgage in her own name. Hence telling her son not to tell the op because the house is hers, not his.

I can't help but agree even if I am biased ' thanks

Pixie5740

fairy_lights wrote: »

Really? It reads to me more like the mother wanted a buy to let to increase her own wealth but couldn't get a mortgage in her own name. Hence telling her son not to tell the op because the house is hers, not his.

Yes that's what it sounds like to me unless the mother has been giving the son the rent minus her fee for managing the let.

Bemzil1

No he has had no financial gain from this property . Will it flag up strait away that he owns a house when he applies for HB ?

Guest101

He needs to take control of the situation.

Rent paid to him, consent to let, make sure all checks up to date.