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Spain cleans up finance rogues - 6 June 2007

Authorities in Spain last week raided the offices of a Costa Blanca-based mortgage broker, arresting the owner on grounds of providing false documentation to banks over mortgages obtained for their clients. As a result, one of the major banks involved in this investigation, Caja Mediterraneo (CAM Bank) has instructed its branches not to accept any more non-resident mortgages until further notice. On top of this, customers of the arrested broker have had the unwelcome knock of the Guardia Civil at their door as part of the investigation.

The investigation has been applauded by other brokers. Heather Chambers, Director of International Mortgage Solutions Ltd (IMS), Spain’s largest non-resident mortgage provider said, “We are very happy that Spain is finally getting to grips with this practice. We have come across instances where clients, in the non-regulated environment that exists here, have been talked into presenting false mortgage applications to obtain the finance that they require. In these circumstances the broker has made no attempt to protect or care for their client, all they are concerned with is the commission they will receive from the bank.”

Providing false documentation to obtain a mortgage leaves clients open to the possibility of serious longer-term implications, and even repossession. Heather continues, “Even worse, some clients may have been sold a mortgage product that does not exist thinking it is self-certified or non-status, with the broker providing false papers to the bank without the client’s knowledge.”

This news comes in the same week as controversy rages about the easy availability of false documents from the internet to obtain fraudulent mortgages in the UK. Payslips, P60 forms and other supporting materials can be obtained for as little as £10 each, and rely on the fact that banks do not always bother to check salary details with employers when approving home loans.

 

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