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Mortgage Verification Scheme

Levels of home ownership are reportedly as low as they were in the 80s, and the government's new Mortgage verification Scheme doesn't look likely to change matters. It means that lenders can pass on details of mortgage applicants for extra checking. If there income isn't what they say it is, they could face an investigation.

A spokesperson for the Council of Mortgage Lenders said the scheme will 'help HMRC to risk assess whether the information it has been given on applicants’ tax affairs is correct.'

CML director general Paul Smee said: '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 confidence about the borrower’s credentials in some cases that they might otherwise have felt compelled to refuse.'

Meanwhile Colin Barclay, Assistant Director of HMRC Risk and Intelligence Service, added: '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.'

The voluntary scheme is meant to be limited to when lenders have reasonable doubt over the veracity of the borrower's claims. It will cost the lender just £14 plus VAT to refer the applicants to HMRC.

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