The Analysis News & Opinions
Opinion
Mortgage fraud rises by 5% in 2019
Our figures have revealed mortgage fraud has seen a 5% increase in the first six months of 2019 compared to the last six months of 2018. Mortgage-application fraud occurs when either false or altered documents are provided in support of a mortgage application: fraud by production of a false document increased by 14%, and fraud by submitting altered documents increased by 32%. Such applicants often provide false or altered bank statements and proof of income as a way to validate income for mortgage applications. Nearly half of those caught committing
application fraud (45%) were aged between 31 and 40 years old, a 16% increase compared to the last six months of 2018. They were closely followed by those aged between 41 and 50 years old, who saw a 6% increase. Coincidentally, our research revealed that
people in the 35-44 age category were more likely to think that exaggerating their income on their mortgage application was ‘reasonable’ than any other age group. In terms of regional breakdowns, the West
Midlands saw the highest increase in fraudulent mortgage applications at 43%, whereas cases in the North East rose by a third. We would urge people to stop, think, and
consider the serious consequences of making false claims in mortgage applications. Taking out a mortgage based on a false income could result in homeowners being unable to repay the debt later on. Other consequences could include blacklisting against future product purchases, or possibly being reported to the police for investigation – potentially leading to a criminal conviction and a prison sentence. It is also easy to assume that making
exaggerations to improve the chances of your mortgage being approved is harmless, but the reality is that this is fraud and the consequences can be very serious.
Mike Haley Chief executive officer, Cifas
Record numbers now seeking advice
Statistics published last month revealed a record 331,337 people contacted StepChange for help with their debts in the first six months of 2019. The charity’s latest Statistics Mid-Year
Update reveals that, of the 190,484 new clients who received full debt advice, the average level of unsecured personal debt was £13,799. This represents a rise of 2% in the past six months and 6% since 2016. Meanwhile, around a third (31%) of new
clients’ outgoings were more than their incomes – the average monthly shortfall for clients with deficit budgets is £365. The figures also reveal that unexpected
life events are the three biggest causes of problem debt, with those experiencing a reduction in income (18%), injury or illness (16%), or unemployment or redundancy (16%) making up the bulk of new clients. Phil Andrew, CEO of StepChange Debt
Charity, said: “These statistics provide a sobering assessment of the scale of problem debt in this country. Across the board, we are seeing red flags, including worrying proportions of new clients falling into debt due to reduced income, illness, or because they rely on credit to pay for day-to-day living expenses. Clearly, more and more households are struggling to hang on and are ill-equipped to deal with any economic shocks the future may hold. “These figures must act as a wake-up
call to the government, who have a real opportunity to tackle some of the drivers of debt in the upcoming Queen’s Speech and beyond. By taking concerted action to curb unlawful bailiff behaviour and waking up to the impact the five-week wait for Universal Credit is having on those who have experienced a sudden drop in income, it can go some way to stemming the rising tide of those in problem debt.” Further findings from the report underline
the pressing need to tackle a range of issues driving problem debt in the UK. Council Tax continues to be the most
common arrears type among new clients and has been so since 2015, when the national
6
www.CCRMagazine.com
scheme of Council Tax Benefit was removed. The proportion of new clients responsible for Council Tax who are in arrears is now at 31%, a slight increase on 2018 (30%). Mr Andrew added: “Debt can have a
serious impact on anybody’s life, but for people who have vulnerabilities, such as physical or mental-health problems, it can be even more severe. In the first half of 2019, 43% of clients were identified as having an additional vulnerability on top of their financial difficulty, while half of clients (49%) identified as vulnerable have a mental-health issue. “Vulnerable clients have an average
monthly income of £1,276, more than £200 lower than the average for all clients (£1,518), while they are also more likely to be behind on their household bills. “Single parents remain overrepresented
among clients, compared to the general population. They make up one quarter (24%) of those who came to us in the first six months of 2019, a disproportionately high figure given just 6% of the population fall into this bracket. This proportion has risen by a third since 2014, when 18% of new clients were single parents.” Elsewhere, a higher proportion of single
parents (34%) had outgoings that were more than their incomes compared to the average of 31%, while the overwhelming majority are renters (90%).
October 2019
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52