Monthly Archives: August 2013

TestimonialKevin is a very helpful, knowledgeable and approachable person. He was invaluable as we were first time buyers and had no idea on how to go about the mortgage process. Kevin took all the responsibility for our mortgage application but kept us informed and explained the process in simple terms every step of the way. I would not hesitate to recommend him to family and friends and will definitely be calling on his services again in the future.

TestimonialKevin was brilliant from start to finish! Have already been recommending. Many thanks for all your help which has made the whole process a lot easier.

 TestimonialApplying for a first time mortgage was a very daunting prospect, but the advice and support offered by Kevin made the process a lot less scary. I will definitely recommend Park Gate to others looking to find a mortgage. Many thanks

When police announce they have uncovered a major mortgage fraud conspiracy, it’s almost inevitable that unflattering mug shots, lurid court case and prison sentences will soon follow.

But many mortgage frauds are quiet affairs, committed by applicants who fully intend to make their repayments, and often only discovered when they stop. Nevertheless, if found out, the fraudster could be facing criminal charges – and in some cases drag their broker in with them.

So who are these quiet fraudsters, and how could their actions affect the brokers who take them on as clients?

1) The stealthy landlords
The number of residential mortgage borrowers busted for renting out their property rose 41% in 2012, according to the UK’s fraud prevention service CIFAS.

It suggested borrowers were trying to take advantage of the present rental market: “This exposes the mortgage lender to greater financial risk, and presents another challenge to organisations in terms of their need and responsibility to educate customers in what constitutes fraud.”

2) The homeowners in disguise
While homeowners may be trying to profit from ‘Generation Rent’, buy-to-let lenders face the opposite problem – mortgage applicants trying to dodge the strict income requirements brought in post-2008.

In July, Precise managing director Alan Cleary announced he would be expelling five brokers from the buy-to-let specialist’s panel for continually bringing cases in which residential clients misrepresented themselves as landlords.

3) The property clubbers
There’s nothing like a helpful business introducer – unless that introducer is part of a scam. Members of ‘Property Clubs’ may conspire to disguise a property’s true purchase price in order to obtain a mortgage without a deposit.

The network Openwork tells its brokers: “The important thing to remember here is that selling a property at a discounted price is not illegal or fraudulent. Disguising this fact to the lender is.”

4) The payslip printers
A client meets a lender’s minimum income requirements and has the payslips to prove it. Or does he? Santander financial crime manager Tracey Carr explains: “There are websites available where you can order replacement payslips. And for a fee you can order payslips to order. Some of them are very good quality.”

Earlier this year, the Financial Conduct Authority banned two Glasgow brokers in part because they failed to identify forged payslips.

5) The bonus baggers
“People inflate their income by saying they receive a regular bonus every year from their company,” says Goldsmith Williams partner Eddie Goldsmith. “It is not hard to get the documentation to impersonate a company, therefore it is not hard to forge the confirmation they have received a bonus.”

Earlier this year, a court found a lettings agent had lied about a £40,000 annual bonus in order to obtain a £488,720 mortgage. In her defence, she tried to blame the mortgage broker.

HMRCHMRC to target buy-to-let tax evaders

Buy-to-let investors who fail to declare their income are likely to be a key target of HM Revenue and Customs’ investigations, a top law firm has warned.

 A study by Pinsent Masons found there were 617 tax evasion prosecutions in 2012-13 – double that of the previous year.

Pinsent Masons partner Jason Collins said HMRC increasingly focused on smaller tax evaders in order to meet its target: “Many people see buy-to-let as a substitute for a pension. It may produce similar financial results but they need to remember they can still incur significant tax liabilities.

“For new, part-time landlords who put their buy-to-let properties to the back of their mind to focus on their day job while the money rolls in, it can be quite easy to get caught out.”

Doctors, dentists, lawyers, construction contractors and restaurant owners as well as landlords were likely to come under fire, he suggested.

In 2010, the government provided HMRC with an additional £917m to tackle tax avoidance and tax evasion, and later topped up funds to more than £1bn. HMRC beat its target of 565 prosecutions this year, despite failing to meet a much smaller target the previous year.

HMRCHMRC offers second property owners ultimatum.

Taxpayers have until 9 August to tell the tax authorities about any unpaid tax on such property sales, and until 6 September to pay the tax that they owe.

HMRC’s property sales campaign is aimed at those selling second homes in the UK or abroad where Capital Gains Tax (CGT) should be paid. It includes properties that were rented out and holiday homes.

HMRC said those who voluntarily come forward will receive the ‘best possible terms and any penalty will be lower than if HMRC approaches them first’.

Marian Wilson, head of HMRC campaigns, said: “Over the last few months we have published articles and written to a lot of people to make them aware of the campaign. As a result, hundreds of people have now come forward. It is not too late for people to contact us.

“If you have sold a second home you might not know it could attract Capital Gains Tax. If anyone has done this in the past and is unsure, they should look at HMRC’s website and use our simple decision tree to find out if they might owe CGT. Telling HMRC about your tax liabilities is straightforward, and help, advice and support are available.”

After 6 September, HMRC will take a much closer look at the tax affairs of people who have sold properties other than their main home, but who appear to have paid no CGT.

HMRC will use information that it holds about property sales in the UK – and abroad – to identify people who have not paid what they owe. It says that penalties – or even criminal prosecution – could follow.

People can take advantage of the campaign by:
a)  telling HMRC about unpaid tax by 9 August,
b)  disclosing the details of what they owe,
c)  paying the tax owed by 6 September 2013.

For more details on the campaign – visit HMRC’s website or call 0845 601 8819.

 

BOEBank of England maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion

The Bank of England’s Monetary Policy Committee voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion

The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The previous change in the size of that programme was an increase of £50 billion to a total of £375 billion on 5 July 2012.

With outputs still well below its pre–recession level and the unemployment rate has not shown any convincing signs of a sustained reduction.

There has been considerable media attention on the new Bank of England governor, Mark Carney, to see what changes he and the Monetary Policy Committee might make to monetary policy.

With inflation at 2.9% and the MPC about to reveal its hand on the possibility of offering forward guidance on policy, the decision to hold Bank Rate and quantitative easing again this month was widely expected.