MORTGAGE fraud costs the UK £600m a year and, as solicitors, we need to be on our guard to ensure clients are not victims.

Of particular concern are two new fraud issues, foreclosure fraud and application hijacking.

Foreclosure fraud has come from the US, where criminals offer rescue schemes to homeowners struggling to meet mortgage repayments.

They usually involve homeowners being offered to remain in the property as a renting tenant, while the rescue scheme pays the mortgage.Š

But the reality is that the mortgage doesn’t get paid and loans are taken out against the property by a criminal syndicate, so the home owner often gets evict-ed and the amount that is owed by them is far greater than the amount of debt they had originally been struggling to pay.

Application hijacking essentially involves criminals usually pos-ing as solicitors and falsely claiming to be the new legal represen-tative for a buyer just before a mortgage com-pletes, and thereby obtaining the mortgage advance.

With these issues, it is up to practices to remain vigilant, know their clients and work with them closely.

With foreclosure fraud, clients should be encouraged to contact their solicitor if they are offered any “rescue agreements”.

Solicitors can then check the “bona fides” of the organisation and ensure they are not a criminal syndicate.

BRIAN LAWLOR is a commercial property specialist at Morecrofts.