There are unfortunately many different types of mortgage fraud that occur within the UK. Property title fraud refers to the specific act of taking out a mortgage under a property title of which that person is not the proprietor and then using the mortgage money for themselves.
Essentially, therefore, the fraudster will claim to be the owner of a property of which he or she is not, take out a mortgage against that property, and then disappear with the mortgage monies. This leaves the mortgage company having a charge over a property to which it has no right to, and without the mortgage monies.
The individual who actually owns the property will have to answer to a mortgage company that thinks it has a charge for the mortgage amount over the particular property in question.
This will obviously cause a lot of grief for the actual owner of the property; however, it is generally the mortgage company that will lose out, as it will have no claim over the property, or the Land Registry that will have to pay compensation for allowing a non-proprietor to be added to the title. For all parties concerned it causes huge amounts of grief.
Identifying property title fraud
One of the main problems with this type of fraud is the length of time it takes to discover there has been a fraud. If somebody has used your property title to obtain a mortgage frequently, how are you to find out?
Most people will only view their property title when buying or selling their house. Therefore, the first likely trigger of any suspicion will be when the mortgage company realises that the repayments are not being made and makes efforts to track down the individual.
The prevalence of mortgage fraud has risen dramatically in the last 20 years with many people putting this down to the fact the Land Registry holds title information electronically and fraudsters have found it a lot easier to engage in criminal activity accordingly.
Reporting property title fraud
Anybody who believes they may be the subject of property title fraud should contact the Land Registry to inform them and then contact the police to report the fraud.
A solicitor may be able to help and advise on how to rectify the situation. In order to prevent possible property title fraud a solicitor will properly recommend you enter a Restriction at the Land Registry. This will prevent anybody placing a charge against the property without your consent.
The appropriate form is an RX1 and the cost of processing the application will be 50. This is a very cheap and cost-effective way of protecting yourself against such fraudsters.
If you suspect you may have been the subject of mortgage fraud then you would be wise to seek out a solicitor for legal advice.
However, given that the cost of buying official copies (a Land Registry document showing the property title) is normally as little as 4, and placing a Restriction so that you will be aware of any attempt to place a charge on the property is only 50, a cost-effective way of minimising the problem is to be proactive and act in person before any fraud has occurred.