New Mortgage Verification Scheme launched to combat mortgage fraud
A new system has been launched, backed by the HMRC, The Council of Mortgage Lenders and the Building Societies Association, in an aim to prevent mortgage fraud.
The Mortgage Verification Scheme will be used by lenders who have reason to suspect – after running their own checks – that some type of mortgage deceit may be taking place.
The mortgage lender will send details over a secure electronic platform, to the HMRC (Her Majesty’s Revenue and Customs), who will then cross-reference the income declared against income tax and employment returns. The HMRC has set up a special unit to follow these investigations, and they will then inform the mortgage lender of any discrepancies.
The mortgage lenders will have to pay a fee of £14+VAT to cover the HMRCs costs, but there is no subscription fee to lenders.
CML Director General, Paul Smee states "Lenders have found during the pilot that the scheme has been very useful in helping them to lend responsibly. It has helped them to avoid lending in some cases where there is a risk of fraud, at the same time as giving them complete confidence about the borrower’s credentials in some cases that they might otherwise have felt compelled to refuse”.