Accountancy firm BDO says 80 per cent of mortgage fraud could be eradicated by including a second valuation.
A recent report by Experian discovered that fraudulent mortgage applications submitted to lenders increased 22 per cent between April and June.
BDO head of fraud and financial crime Simon Bevan says: “Most of the fraud is around buy-to-let and that seems to be because there is a shortage of rental property and it is the buy-to-let area that they are lending on.
“You could eradicate 80 per cent of mortgage fraud if you had two valuations from two different valuers. They would have to collude together so you would take your risk profile down massively. The banks will not do that as they are trying to keep their charges as low as possible.”
John Charcol senior technical director Ray Boulger says: “Because of the controls lenders have now put in, the scope for fraud is quite limited unless someone has found a way round the system.”
Goldsmith Williams solicitors’ partner Eddie Goldsmith, says: “If fraudulent valuations are an issue with lenders, then having a second independent valuer go out is going to assist that enormously. The question is, who is going to pay for it?”