The head of the mortgage broking sector has warned members that they could be snared by a multimillion-dollar mortgage fraud scam.
Megan Salt, chief executive of the Mortgage Brokers Association, sent a warning to broker members about the swindle which has also caught out real estate agents and banks.
"These scams are being committed by groups of individuals making applications for finance on fraudulent sale and purchase agreements or on properties where the price quoted has been well above valuation," Salt wrote to her members.
She said she was acting on advice from the Real Estate Institute which wanted her to warn mortgage brokers and said banks could lose huge amounts.
"The institute is concerned that mortgage brokers may be inadvertently caught up as well," she said.
Her warning comes after news that ASB Bank lost $180,000 late last year to a woman posing as a West Auckland home owner seeking mortgage finance for a holiday and renovations.
Late last year, the institute urged members to be suspicious of people wanting sale and purchase agreements, and anyone who put a property which had just sold back on the market for re-sale at an inflated price.
It advised people to watch for suggestions that a price had been elevated beyond expectations, agents asking for dummy contracts to be drawn up, deposit inquiries from lenders where an agent has no record and the use of nominee companies or cases where settlement was demanded in less than 10 days.
In a series of separate proceedings, the Serious Fraud Office is prosecuting 11 people in Auckland and Christchurch for alleged mortgage fraud.
Those charged have been involved in property and company dealings, but are not real estate agents. Depositions and trials of up to three weeks have been set down in Manukau, Auckland and Christchurch district courts throughout this year but no further details were available.
Brokers warned to beware of mortgage fraud swindles
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