The Dutch Authority for the Financial Markets (AFM) has recently been receiving increasing signals indicating mortgage fraud. This can have significant consequences, so the watchdog is calling for greater attention to this issue.
Mortgage fraud includes any form of deception intended to mislead the mortgage provider. This can involve falsified tax returns, falsified sales figures, falsified payslips, fictitious employment relationships, or manipulated valuation appraisals.
Any financial service provider can become involved, even unintentionally or without realizing it, according to the AFM. This can have significant consequences: some credit providers may no longer want to work with financial service providers who have been involved in fraud.
For people who have obtained a mortgage based on incorrect information, it may mean that the mortgage contract is terminated. This means that the mortgage amount must be repaid immediately.
The police, the Royal Dutch Association of Civil-law Notaries (KNB), the Dutch Banking Association (NVB), and the Mortgage Fraud Prevention Foundation (SFH) also raised the alarm last month and have asked the government to take measures to combat mortgage fraud.
Because mortgage lenders are currently unable to independently verify income data, people applying for a mortgage can declare a higher income. This not only leads to unfair competition in the housing market, but it also allows criminal networks to strike, according to the police. As a result, thousands of homes end up in the hands of criminals.