The Financial Service Authority has warned that there is an increase in buy-to-let mortgage fraud by people who are unable to gain an owner-occupier mortgage offer from lenders.
The FSA believes that this is a way around the current restrictions for people who wish to invest in property and this is set to increase over the next year as lenders fail to relax their lending criteria.
Richard Iganowicz is a whole of mortgage broker and Director of Mortgage Savers. He says:
Lenders crying wolf and FSA claiming a fraud loophole. There must be something wrong if people are failing to get normal 90% LTV residential mortgages and therefore having to revert to 75% LTV buy to let products!
The government initiative to have the banks lend more money seems to be falling on deaf ears, cynics would say that BTL lending is more profitable than like for like 75% LTV residential products so why do they need to loosen lending criteria for residential mortgages? After the LIBOR fixing revelations can we really trust them to be doing what is best for the customer?
The solution is simple,
improve lending criteria for residential mortgages and you will automatically remove the fraud alternative.
Instead of the FSA spending their resources hunting out fraudulent applications they should come down hard on the banks (the root cause of the problem) and close the door to this loophole in one simple move!
About Mortgage Savers
Mortgage Savers is a whole of market mortgage brokerage. Our fully qualified consultants arent sales reps; they are professional brokers offering totally impartial advice. We help people find the best residential, commercial or buy-to-let mortgage product available from over 200 lenders offering in excess of 10,000 mortgage products. Our services dont end there. In addition to providing mortgage advice, we also offer free credit reports, debt advice and solutions, overseas property sourcing, insurance services and for those who really want to get to grips with buy-to-let we offer several how to books on renovating a property, buy-to-let secrets, tax guides and money saving tips through our online Bookshop.