Mortgage fraud doubles

The Land Registry has revealed that it has paid out almost £4 million in compensation to defrauded homeowners and mortgage lenders this year, twice the amount it paid out the year before for mortgage fraud.

It is estimated that the UK’s banks and building societies could be carrying up to £17bn worth of fraudulent mortgages on their books.

Paul Doxey, a forensic accountant at Navigant Consulting, told Channel 4 News: "There's been a complete explosion in mortgage fraud.

"There is probably over £7bn worth of fraudulent mortgages sitting on lenders' books. It could be much higher than that - as high as £17bn."

He went on to estimate between 30,000 and 60,000 properties in the UK could have been bought with fraudulent mortgages.

Property fraud is usually carried out by criminals obtaining false ID papers of a homeowner and then going to the Land Registry to transfer ownership to a new name.

Under the new name they obtain a mortgage and then disappear with the cash, leaving the owner facing repossession.

A spokesperson for the British Bankers Association said: "This is something we remain concerned about. "In a market downturn the risk of fraudulent activities always increases, especially given the big gains seen recently in the property market."

Earlier this year the BBA raised the problem with the Financial Services Authority to investigate.