The Financial Services Authority FSA is conducting research into the number of properties that are being sold at auction and the possibility of buy-to-let landlords buying the properties and taking out residential mortgages. This is potentially fraud. Records of properties being sold at auction are being kept and monitored.
This action is being taken due to the high increase in the number of homes being repossessed and the areas in which they are most likely to occur. The Financial Services Authority has already identified some suspicious activities, which include the providing false information to lenders about their income, and pretending to be first-time buyers.
Our view
Fraud is fraud. Rules are in place to protect us all and if some are abusing the position by borrowing too much and then getting into difficulty, it has to be investigated. The results of this study will hopefully be published in the next Financial Risk Outlook.