Launch of Mortgage Verification Scheme to Combat Fraud

publication date: Sep 7, 2011
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Launch of Mortgage Verification Scheme to Combat Fraud


Since the credit crunch, the FSA have identified a substantial amount of mortgage (and other financial) fraud which has run into millions. The National Fraud Authority estimates the cost of mortgage fraud at £1 billion last year.

To help combat and reduce mortgage fraud, HM Revenue & Customs, the Council of Mortgage Lenders and the Building Societies Association have worked together on the development of the Mortgage Verification Scheme and see it as an important additional tool to help beat fraud.

Mortgage lenders will send relevant details of mortgage applications where they have inadequate evidence of declared income and suspect fraud using a secure electronic platform to HMRC, which will check income details declared to lenders against information provided in income tax and employment returns. HMRC will then advise lenders whether or not the details correspond, which will inform lending decisions.

As well as aiding mortgage fraud prevention, the scheme will help HMRC to risk assess whether the information it has been given on applicants' tax affairs is correct. In return, lenders gain access to a source of data that helps them to lend responsibly and manage risk.

HMRC has set up a specialised unit to deal with the requests. Any mortgage lender who wishes to use the scheme may do so. Other than a fee of £14 plus VAT per case to cover HMRC's costs, lenders face no additional fees to participate. It is not anticipated that the scheme will have any significant impact on the time taken to reach a lending decision.

For the full Press Release - follow this link

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