Mortgage rules not tight enough claim lenders
The sales of newly built city centre flats are being subject to conditions which could untether mortgage lending fraud. Lenders in the UK are wanting tighter, better rules to help prevent such practices from unfolding, and thus causing further rifts in the housing crisis.
Developers seeking to take advantage of uncertain market conditions may be tempted to offer deals which could lead to the inflation of property values, says the Council of Mortgage Lenders (CML).
CML is the trade association for the industry of mortgage lending and warns the incentivized deals could include cash-back offers, free holidays, paying of legal fees and buying of white goods, among the few mentioned.
The CML publication stated: “In recent years, discounts and incentives have had the effect of making the real value of new homes less than transparent. This is bad news for genuine buyers and for lenders. Buyers may find themselves with a mortgage worth more than the property’s value, while lenders may find themselves exposed to fraud and the risk of loss.”
Now that mortgage practices are under close scrutiny and lending is tighter than in decades, creating an atmosphere which may open doors to fraud must be carefully examined not only by industry experts, but also by would-be home buyers.
There are times when the oldest advice is the best advice for all; Caveat Emptor - Buyer Beware.