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Buy-to-let mortgage fraud seems to have reared its ugly head in the last few weeks as several buy-to-let lenders admit they have been the victims of massive scams.

Chelsea building society admitted it has provisioned £41m against probable buy-to-let mortgage fraud – it found, after going through its mortgage book, that many mortgage cases had been fraudulently applied for and many property prices had been fraudulently inflated. Bradford & Bingley also admitted it had provisioned a whopping £270.8m against probable buy-to-let fraud.

And experts think this is just the tip if the iceberg. They think that because of negligence on the part of mortgage lenders, along with a large increase in cowboy solicitors, surveyors and advisers, we are going to see billions of pounds provisioned against buy-to-let mortgage fraud.

Simon Bevan, head of the fraud services team at BDO Stoy Hayward, says: “From a fraud point of view we are a long way from bottom. It is extremely likely that the total fraud figures will treble during the course of the recession."

So how can you make sure that you are well clear of any dodgy practices? The best place to start is to make sure that your buy-to-let mortgage adviser is on the level. Ask to see proof of their authenticity – official authorisation, past client testimony – anything that can prove that they have done all they can to distance themselves from the cowboys that plagued the buy-to-let market for so long.


SOURCE: Chelsea, B&B, BDO Stoy Hayward, 21/08/09

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