Mis-sold Mortgage Claims > Mortgage News
Mortgage Lenders Get Last Chance with Mortgage Fraud
Wed, 09 Nov 2011
Mortgage lenders may have their last chance in regard to mortgage fraud.

Following the US Treasury's bail-out of giant mortgage lenders Fannie Mae and Freddie Mac, the Federal Reserve has just announced new rules to "facilitate responsible lending".

These measures will include ones to prevent lenders from imposing a penalty on early mortgage payments .

Relaxed lending standards are viewed as highly contributory to the American sub prime property collapse as it is clear that risky loans were provided on an immense scale to people who were known to be unable to afford them and went on to not be able to pay them.

Property booms can involve exaggeration on the part of borrowers, with the worst case scenario being deception on the part of borrowers. For Mortgage lenders, their enthusiasm can mean lax standards with regard to decisions revolving around loans and underwriting.

The fervour can lead to costly mortgage fraud operations. This has led to exorbitant anti-mortgage fraud initiatives in the UK, with the City of London Police estimating that mortgage fraud cost £700m in 2010 alone.
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