Prospective homeowners urged to lie by brokers

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by Kay Murchie

It has been claimed that prospective homeowners are being encouraged by mortgage brokers to lie about their salary in order to secure huge loans.

A spokesperson for the Citizens Advice Bureau said that an increasing amount of people are being urged to lie about their income to take on home loans where it is impossible to maintain payments. Simple checks are not being carried out and a growing number are suffering as a result.

The Citizens Advice Bureau stated that a care worker who earned less than £6,000 conned two mortgage companies into lending her more than £100,000. The care worker said she was advised to lie about her income in order to secure a £102,000 loan in 2003. In 2005, she increased the loan to £122,000 after stating she was earning £35,000 per annum. On a second application she claimed she earned around £80,000 working in the public services sector.

However, her actual annual income was between £3,000 and £5,500. The care worker was given a 6-month suspended prison sentence after admitting obtaining money transfers by deception.

During the hearing, comparisons were made between Britain’s mortgage market and the subprime loan outrage in America. Subprime mortgages are high interest loans granted to those with a poor credit history.