FTAdviser.com

Advertising

Last week Channel Four news reported this type of deception, where fraudsters steal the identity of a home owner and then transfer the property into another name in order to borrow against that property, was becoming more widespread.

The Land Registry told Channel Four News that incidents had doubled in the last year.

In 2007 to 2008 it paid out almost £4m in compensation to lenders and defrauded homeowners, compared with just in excess of £2m in 2006 to 2007.

Sue Anderson, head of member and external relations for the CML, said the numbers were "not large" in the context of overall housing transactions and the Land Registry's annual report revealed only 60 cases had occured between 2007 to 2008.

She said: "Title fraud is relatively rare. These things are always going to be part of the pot but the important thing is minimising them. I think they are being dealt with efficiently and effectively and I think these numbers do reinforce that.

"It is not a common occurrence and we are not seeing a large volumes of pay-outs here relative to the total size of the market, it is incredibly small in fact."

However Paul Doxey, managing director of disputes and investigations for Navigant Consulting, a company that advises lenders on mortgage fraud, told Channel Four at least £7bn of overall fraud could be sitting on lenders' books.

Ms Anderson said she could not comment on whether this was a fair reflection of the extent of providers exposure to fraud but said lenders had employed a number of measures in the last year, such as tightening up on new build valuations and the FSA's information from lenders initiative, to tackle fraud.

She said: "It is not possible for us to confirm those numbers are in the right ball park or not but I think what is possible to show and demonstrate is quite how much effort is going into making sure the numbers are minimal."

Melanie Bien, director of Savills Private Finance, said criminals were becoming increasingly sophisticated in committing fraud.

She said: "Obviously advisers will have checks in place to ensure they protect themselves and clients as much as possible but it is an ongoing battle.

"Advisers and lenders work well together in trying to stamp it out but there are more and more different ways to become exposed and it just goes to show you cannot be complacent and you just have to keep on working at it."