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HMRC and lenders join forces to combat mortgage fraud
Posted Sep 4, 2011
A new Mortgage Verification Scheme has been launched, which will enable mortgage lenders to check applicants' income declarations with HMRC records in cases where fraud is suspected.
Mutual benefits for lenders and HMRC
The scheme, which went live on 1st September, was developed by HMRC, the Council of Mortgage Lenders and the Building Societies Association. A pilot period ran from the March 2010, when the scheme was first announced, until the launch last week.
If mortgage lenders believe that a case of mortgage fraud is underway, and insufficient proof of income is available, they can now send details of applications to HMRC, together with a modest payment of £14 per case.
The tax authorities will then compare the income details on the application against details captured from previous tax and employment returns. HMRC will then let the lenders know whether the details correspond or not.
Unsurprisingly, the scheme will not only cut down on the estimated £1bn of mortgage fraud which takes place each year; it will also help HMRC determine whether the information submitted on individuals' tax returns is correct.
Commenting on the launch, Colin Barclay, Assistant Director of HMRC Risk and Intelligence Service, said:
"HMRC are determined to tackle fraud wherever we can. The Mortgage Verification Scheme is an unprecedented opportunity for HMRC and lenders to work together to combat fraud in the mortgage industry."
Contractor mortgage help
Contractors, and other small business people, have often found it harder to prove their income than their permanently employed counterparts. If you want specialist help finding a mortgage, try our contractor mortgages enquiry service.
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