SFO lays charges for mortgage frauds

The Serious Fraud Office (SFO) has charged 11 people in Auckland and Christchurch with mortgage fraud and will prosecute next year.

Property developers and others charged with being involved in housing loan scams had been investigated by the SFO and faced fraud charges, the New Zealand Herald reported today.

Banks and financiers were said to be the big-time losers in swindles involving false housing contracts and over-valued properties.

Before Christmas, the Real Estate Institute (REINZ) said it had cautioned its members about a mortgage scam apparently designed to defraud financial institutions but which could "entrap" some of its members.

"We believe that there is a scam operating which involves people applying for credit on a fraudulently obtained or altered sale and purchase agreement," REINZ national president Howard Morley said.

"We understand that some lending institutions have suffered significant losses and some cases have undoubtedly involved unwitting REINZ salespersons."

Today Mr Morley said REINZ was alerted to the scam about two weeks ago. Its investigation was in its early days and the extent of the problem was not known.

But he confirmed on National Radio that at least one or two agents were involved in some way.

"In some cases the agent may be aware of the alteration to the sale and purchase agreement. Where that has occurred we will be coming down on them like a tonne of bricks, really," he said.

"Once we find out if they are involved, there's no place for them in the industry."

Mr Morley said the changes to the sale and purchase agreements were made after deals were done.

REINZ was warning licensees to watch for such things as a resale of a recently sold property at a greatly increased price.

- NZPA