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.

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