The sharp rise in fraudulent mortgage applications is a surprise, according to Legal & General Mortgage Club.
According to Experian, during the second quarter of 2012, new fraudulent applications increased to 0.39 per cent.
Legal & General Mortgage Club managing director Ben Thompson said: “Given that we experienced a credit boom in the run up to the bust, and that it became increasingly hard to get onto the housing ladder, it is perhaps surprising to see the figure as low as 0.39 per cent.”
However, he also said that fraud can take many years to be properly uncovered.
Thompson added that mortgage lending criteria has tightened to such a degree that it has become “almost impossible” for many genuine buyers to become homeowners.
“We all know why the tightening has happened,” he said. “But many believe that whilst necessary, the restrictions have gone too far and now serve to tempt applicants to stretch the truth when trying to get onto the housing ladder.
“This is obviously not the right attitude to have, and it is sad that people feel they need to resort to this in order to secure lending.
“Our hope is that lenders can start to slowly and appropriately relax their lending criteria enabling eligible buyers to own their own homes. Fraud prevention and controls clearly must continue however, our efforts across the industry to help buyers must strengthen, otherwise it is likely that we will see this rise in fraudulent applications continue.”
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