Mortgage lending in the UK is very strict. Usually limiting peoples
potential to borrow to one sizeable loan secured on one property.
However there is a grey area in that customers sign a written
declaration saying they have no other mortgages. Or indeed loans
secured against there property.  Please could someone point out, the
point of law, with cases that these mortgage lenders are upholding. Or
at least give some law sites, that are applicable. Some clarification
would be appreciated.
                         When juggling fiancees, its tempting to
utilise your status to the utmost.Therfore by having a intimate
insight to property law ,will allow me to find a better lender!

Dear axil221-ga,

When completing an application for a mortgage you are asked a number
of questions. You then normally sign a declaration with words to the
effect that it is true. I have copied below extracts from a couple of
such declarations which appear on mortgage applications (selected at
random), but the existence of a warning is not required for the
offence to be committed.
If you knowingly do not supply correct information then the lenders do
not know your true financial position. If they do grant you a mortgage
then you could render yourself open to civil action and / or criminal
charges. You will note in the extracts below there is threat of making
good any losses. The main criminal offence involved is Obtaining A
Money Transfer By Deception, Contrary to Section 15A Theft 1968.

The Act appears here.
http://www.lawteacher.net/Criminal/Property%20Offences/TA%201968.pdf


This is from the Criminal Prosecutions Service guide to charging
standards which specifically refers to mortgage fraud.

?Obtaining A Money Transfer By Deception - Section 15A Theft Act 1968
(As Amended By Theft (Amendment) Act 1996, Section 1.
Specimen Indictment (Indictment Precedent Manual)
Definition (Archbold, 21-213).
Unlike obtaining property by deception and theft, you do not have to
prove intent permanently to deprive. (It is likely that such an intent
will be involved, however.)
The transfer is usually done by:
Cheque; or 
Telegraphic transfer; or 
Clearing House Automated Payment System ("CHAPS") order 
In some cases e.g. a mortgage loan, the advance may be paid into the
account of a third party (e.g. a solicitor acting for the building
society) for onward payment to the vendor of the property. This does
not affect the wording of the charge.?
http://www.cps.gov.uk/legal/section8/chapter_a.html


Examination of a Case Stated
?A mortgage fraud typically involves the obtaining of an advance,
usually to enable the purchase of real property, by the making of
false representations about the borrower's earnings, job or indeed any
fact which may be material to the lender's decision to lend on the
security of the relevant property. Mortgage fraud is more than merely
"anti-social" conduct; yet until recently, this sort of behaviour was
considered to be outside the clutches of the criminal law, at least
when committed by one person. This state of affairs was of particular
concern to banks, building societies and other lending institutions,
who were often the victims of such "non-criminal" fraud. From a moral
perspective, however, mortgage fraud is no less deserving of
reprobation than other forms of obtaining of goods or services by
means of deception, the latter already being covered by the Thefts
Acts, 1968 and 1978. ?
http://webjcli.ncl.ac.uk/1997/issue2/clements2.html

The scale of seriousness depends on the extent of the deception,
whether it is organised and involves several persons, and the attitude
of the lenders. These are two examples.
http://news.bbc.co.uk/2/hi/uk_news/wales/4352174.stm
http://www.sfo.gov.uk/news/prout/pr_365.asp?id=365


Mortgage self-certification has recently been crticised; you may wish
to see the comments made in this articles on failure to reveal full
information or to tell lies.
http://news.bbc.co.uk/1/hi/business/3478635.stm
http://www.fool.co.uk/news/Comment/2003/c031029d.htm
http://www.myfinances.co.uk/property/self-cert-mortgage-branded-dangerous-lending-$2880400.htm

?Be honest with your broker. They will carry out a 'fact find' to
establish your financial position. Do not be tempted to overstate your
income or downplay existing debts or other financial commitments.
Remember that it is a criminal offence to lie about your income on a
mortgage application form.?
http://www.financedition.com/journal/2005/09/11/10-uk-broker-tips


Extracts from application forms.

?The information given in this application is true to the best of my
knowledge and belief and should the mortgage be made such information
must be regarded as forming part of the terms of the mortgage. If any
such information is incorrect I will make good any loss which you may
suffer by acting in reliance on such information. I have read and
understood the above declarations and the declarations in sections E
and G. I understand that a false declaration will forfeit any mortgage
offer.?
http://www.scottishwidows.co.uk/documents/lifetimemortgage_application.pdf


?I agree that, if I have given any information (or if any information
has been given on my behalf) which I know to be incorrect or which I
have not checked and which is subsequently shown to be incorrect, I
will pay all reasonable fees, expenses and costs incurred by the
Society in connection with processing this application and any
resulting loan.?
http://www.norwichandpeterborough.co.uk/gibraltar/pdfs/SHL003.pdf


?The information in this application is true to the best of my/our knowledge and
belief and should the mortgage advance (?the Mortgage?) be made such
information will be regarded as forming part of the terms of the Mortgage. If
any information is incorrect I/we will make good any loss which the Lender may
suffer by acting in reliance upon any such information.?
http://www.metrofinance.co.uk/mortgageapps/Capital_Home_Loans_BTL.pdf



I hope this answers your question. If it does not, or the answer is
unclear, then please ask for clarification of this research before
rating the answer. I shall respond to the clarification request as
soon as I receive it.
Thank you
answerfinder

---

Request for Answer Clarification by axil221-ga on 28 Oct 2005 04:42 PDT

frde-ga,Thanks for sticking up for me!,the whole subject is a delicate
matter and deserves the benefit of the doubt.If and by the sound of it
you are, familiar with the grey areas I am referring to in my original
question,I would appreciate you enlarging on your statement "use a
real building society such as the Nationwide",as opposed to not using
a real society?
Your comment was usefull,it reminds me of when I had a mortgage in
1988 .It was tough and I had to sell the house.From this I know my
limits and dealing with large amounts of money requires a whole new
frame of mind to have a chance!

Gave me a reality check,could have done without  "oarin".

axil221-ga,

These are my thoughts. I don?t believe there is a property law
relating to this. A mortgage is a loan to purchase a property. The
lender requires security for the loan and that is the property. They
need to know all relevant facts concerning your financial situation,
that is why they ask about other mortgages. They are lending you money
and wish to protect themselves against any loss if you cannot meet the
mortgage payments. If you do not disclose all relevant facts then they
are making a decision not knowing the full facts. This could mean that
you are obtaining a mortgage by deception which may be a criminal
offence.
I can provide more information on the criminal offence if that is what
you are referring to.
answerfinder-ga

Yes please,some cases would be usefull,any information please so I
know where I am.Some court cases would be usefull?

"When juggling fiancees, its tempting to utilise your status to the utmost."

Sorry, Axi1221-ga, I just could not resist calling attention to this
delightful typo  - or is a Freudian slip?  :)

@MyOarin
- that was no Freudian slip - just a subtle explanation of the problem.

@Axil
Be prepared for interest rate rises, in my time, rates are
unbelievably low and I've seen two nightmarish scenario when rates
have gone through the roof.

Definitely get a repayment mortgage, preferably from a 'real' building
society, the Nationwide is the only major one I can think of right
now.

Normally when getting a 'hooky' mortgage one uses a mortgage broker
who does your lying for you - it costs - but it does the job.

It might be a sound idea to get Fiancee1 to agree to taking over her domicile.

Be very careful - with a little lying you will probably get what you
want (and nobody will care if you keep up the payments) but things can
go horribly wrong.

@axil221-ga 

As you are doubless aware, the majority of UK Building Societies have
'de-mutualized' - this changes their reason for existence from
borrowing money from relatively small depositors and lending money for
property purchase
- to (supposedly) maximizing returns to shareholders.

In short they are now in it for a profit, which makes them far less
tolerant and a lot more bloodthirsty.

Normally when people have a slightly tricky financial position they
use a 'mortgage broker' who generally maintains a 'relationship' with
a number of lenders, and of course charges commission. The lenders are
likely to be institutions who want a rapid increase in their lending
portfolio.

Although more convenient, you are likely to land up with a lender that
is more inclined to squeeze you in the short term, rather than take a
slightly stodgy long term view. You may find yourself offered a
mortgage with strings attached, like life/employment insurance, one
off 'insurance policies' etc, in the old days the scam was endowment
policies, but that has been rumbled.

Digressing, currently we have very low interest rates, it would take
very little to make them rise, so if you are aiming to stretch
yourself I would definitely try to find a mortgage that has a 'cap' or
is on a fixed rate, at least for a few years.

Personally I suggest that you tentatively try a number of approaches,
a quiet word with your solicitor will probably get some surprizing
results, also an enquiry at an estate agent will get interest. Making
an appointment with a 'real' building society to discuss matters would
also be wise.

I would definately avoid any 'heavily marketed' offer, as decisions
are literally made by computer - and computers have little discretion
for unusual circumstances.

Also, be very well aware that you could land up with 'negative equity'
if house prices fall, which is no great worry provided one can keep up
the payments and does not have to move.

In short, I suggest that you decide what you can afford, then test the
waters, you'll find plenty of takers, but most will be sharks.

Best of luck.

If its any help you can find some useful definitions regarding
mortgages on http://www.home.co.uk/guides/mortgage_glossary.htm