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Sentencing for mortgage fraud

What is the sentence for mortgage fraud in 2024?

At the heart of any mortgage fraud offence is an attempt to gain illegitimate advantage from the UK property market. Offenders are typically seeking weaknesses in the lending process so that they can financially benefit.

mortgage fraud

There is a range of process flaws for offenders to use to their advantage. Mortgage fraud investigations can involve the misleading provision of information to the lender, or completely fraudulent and fictitious applications for loans. The crime will often involve estate agents, property developers, property surveyors, investors, financial advisors, mortgage brokers, solicitors and accountants.

Even solicitors who are involved in property transactions can be held criminally liable if their clients are found to be committing mortgage fraud. Mortgage fraud can also occur when it is related to money laundering.

Mortgage fraud is typically committed through two primary methods. The first method involves misrepresentation of income or of the value of the property required to receive more significant funds than the person is entitled. Secondly, it may be a crime syndicate working on the overvaluing of properties and using false identities and not making any repayments on the mortgage.

In any event, the implications of committing mortgage fraud can be severe, especially since the inception of the Proceeds of Crime Act 2002 which allows the Court to restrain all your assets, limit access to your own money and then order the confiscation of your home and any other assets you may have.

To help you to understand what the outcome might be as a result of being convicted of mortgage fraud, we’ve detailed the sentencing guidelines below.  Please note that a competent and experienced solicitor may be able to get any prison sentence reduced or even avoid it entirely.

Read more information about the offence of Mortgage fraud

Have you been charged or arrested for mortgage fraud?  

If you or somebody you care about has been charged or arrested in connection to a mortgage fraud case, you’re most likely feeling very worried. It’s essential to take the legal guidance of mortgage fraud solicitors as soon as you have heard that you are going to be investigated.

In some instances, a person will have been accused of playing a part, but in reality, they have had no involvement whatsoever. In situations like this, it’s crucial that you get your name cleared.

Mortgage fraud is an offence that can severely damage your professional and personal finance reputation, including your credit score. It’s vital that you take the advice of a fraud solicitor as quickly as possible to deal with any allegations.

It’s incredibly important for you to keep your reputation intact, in particular if you’re a professional in the property industry.  Specialist fraud lawyers can give you the support and defence that you need to ensure that your rights are protected from day one.

It’s essential to take early action so that your solicitor has the time to prepare to provide you with a strong defence.

More about mortgage fraud offence

Every act of mortgage fraud is aimed at misleading a lender to obtain the loan or to secure a larger loan than might otherwise be offered. Proceedings may not be limited to the borrower but may involve any of the professionals involved in getting the loan.

Investigations of mortgage fraud are typically complex and can be a strain on any business or person involved. The emotional pressure can be immense, and it’s vital to select an experienced lawyer who can handle the matter supportively and sensitively.

Despite most people being of the understanding that mortgage fraud is committed by experienced financial criminals, this isn’t the case.

There are many different activities that can be classified as mortgage fraud and an increasing number of UK citizens are committing the crime without even being aware of doing so.

Here are further activities that are classified as mortgage fraud in the UK.

False Information on Mortgage Applications

Most people who apply for a mortgage in the UK will be looking to raise a mortgage on their own home. The individual is likely to either move house or remortgage at least once during their life and may apply for mortgages on several different occasions.

This type of borrower, they may inadvertently or purposefully commit mortgage fraud by either exaggerating income or by providing false information elsewhere on the application form.

By exaggerating their income, the borrower will be increasing the amount that they want to borrow. Even if the borrower feels they can quickly meet their monthly mortgage payments, it still comes under the category of mortgage fraud.

Providing any false information on the application form is also considered to be mortgage fraud. This may include information about marital state, name, address or any historical information such as where they have lived previously.

False Documents

In more recent years, providing false documents to lenders is an activity that has been increasing. Personal identification or evidence of income that have been falsified are typical acts of fraud. Unfortunately, it’s now possible to access a wide range of personal documents through suppliers who market their products on the internet.

With the quality of false documentation now being so high, it’s tempting for people to attempt to pass them off as being real. However, providing documentation that is false to a UK mortgage lender is a criminal offence and a form of mortgage fraud.

Exaggerated Valuations

Lastly, a new type of mortgage fraud is now committed by a network of property professionals. Surveyors, property brokers, solicitors and valuers will work together to obtain mortgages on overvalued properties.

For example, the criminal network of fraudsters will work together to overvalue a property. They may negotiate to buy a property for £100,000 but then value the property at £150,000 so that a mortgage can be secured against that value by a broker. The conveyancing is performed by the soliticors and when the vendor is paid their £100,000 the remaining £50,000 will be retained by the fraudsters.

This scam involves several professional partners working as a team, is very complex and sophisticated and is a form of mortgage fraud.

What is the average sentence for mortgage fraud offences?

The motivation of a lender is to reclaim their money. If you cannot pay, then the property may be repossessed. If the court deems your crime to be particularly harmful, then they may give you a suspended sentence and potentially a fine. You may be given the freedom to be in the community, but you will be on license and expected to adhere to specific conditions set by the court.

How does a court decide on the seriousness of the mortgage fraud offence for sentencing purposes? 

The information that judges is given with regards to sentencing are only guidelines, and each case will be looked at individually. One of the factors judges consider in every case of this nature is the defendant’s level of genuine remorse.

The following factors are considered when the court decides which sentence to give. They will look at:

  • Your previous conviction
  • The degree of your remorse

What are some of the mitigating factors that might reduce the mortgage fraud offence sentence?

When sentencing for mortgage fraud, your case will be investigated thoroughly by the police and other regulatory agents.

It will be looked at for whether you have taken part in a group activity or to see if you were forced into it. If you’ve used a false identity, or you have used the identity of others to access more funds, this will be considered to decide your sentence.

Certain aspects of a case are known as the mitigating aspects which can influence the sentence that a judge gives. One of the factors judges consider in every case of this nature is the defendant’s level of genuine remorse.

The following are some of the other factors considered when the court decides which sentence to give. They will look at:

  • Any previous conviction
  • Your level of remorse
  • Your level of cooperation with the investigation
  • Whether the activity you took part in was originally legitimate
  • Your reputation / good character
  • Whether you have any serious medical conditions that require long term, urgent or intensive treatment
  • Whether you have a learning disability or a mental disorder
  • Whether you are the sole or primary carer for related dependents

Is it possible to reduce a sentence for mortgage fraud with a guilty plea?

In recent years, several changes have been made to the sentencing system in the UK to save the court time and cost and to protect witnesses from the stress of needlessly going through a trial. For offenders aged 18 and over, pleading guilty early on in a case can reduce a sentence by as much as one third (maximum). The later the plea is entered, the smaller the reduction.

‘Early on’ refers to ‘the first stage of the proceedings’ and means anytime up to and including the first hearing at the Magistrates Court or Crown Court for indictable offences.

If a plea is entered 14 days after the first hearing, for example, the maximum level of reduction is just 20% or one fifth of the sentence. For indictable offences, the limit for a guilty plea to be made is within 28 days after the prosecutor has stated compliance with section 3 of CPIA 1996 and serving disclosure; although the decision is ultimately in the hands of the Judge who has discretion to apply whatever credit is deemed appropriate.

After these times there is a sliding scale of credit applied. This goes down to one tenth on the first day of the trial and to zero if entered during the course of the trial. In theory, the ten percent could be given if the plea is issued after the opening speeches on the first day, but prior to any witness evidence being heard.

If the accused does not want to plead guilty, then it’s important for the solicitor to regularly inform the court throughout the trial of the reasons why the client’s plea is not guilty.

What are some of the other consequences of the mortgage fraud offence?

Ancillary Orders

A court can also make ancillary orders on a defendant if they are found guilty and convicted of a mortgage fraud offence. These are extra elements of punishment that can be added to a sentence and include additional restrictions or requirements that can affect a dependent’s finances, your property or business or financial activity.

Ancillary orders that are typically added to the penalty for those who are found to be guilty of mortgage fraud include:

  • Compensation for loss
  • Restraint orders
  • Reparation orders
  • Financial reporting order
  • Prevented from applying for any form of credit including mortgages and loans
  • Confiscation orders

As part of your investigation, you may also have your assets frozen with the possibility of having cash or other assets seized.

In addition, the court may demand payment of the following if the accused is convicted:

Payment of costs applied for by the prosecutors

Although the police meet some of the costs involved in the prosecution, the costs of investigation are typically sought from the convicted. These may include the costs of:

  • The work done in obtaining sufficient evidence for prosecution either at the initial stage or later at the request of Crown Prosecution Service (CPS)
  • Seeking medical or expert evidence as part of the investigation, (where a witness is required to attend Court, the cost of the attendance falls on the CPS).
  • Re-interviewing witnesses
  • The entire costs of the prosecutor, including fees for the use of external Barristers used by the CPS, can be recovered from the defendant, subject to means. At the end of the case, the prosecutor under The Prosecution of Offences Act 1985 will request the Judge to order a sum to be paid for the costs incurred by the prosecutor in bringing the prosecution.

Victims surcharges

The term victims’ surcharges can be explained as paying compensation to a fund for victims and can range between £20 to £170 depending on what sentence you were given at conviction.

How sentences can be added to national information databases

There are several national databases that hold information about individuals and any allegations made about them, their criminal and court records. These include the DBS (Disclosure and Barring Service) which was previously known as the CRB (Criminal Record Bureau) and the Police National Computer (PNC).  Depending on what happened, whether the accused is convicted and what sentence was issued, the accused may be added to one or all these databases. Their purpose is to provide information to potential employers and to regulate the ability to take part in certain activities.

If your case progresses to court and you are convicted of mortgage fraud, your conviction will be noted on your CRB / police record. The period of the endorsement will depend on the nature and length of your sentence.

Below are details on how long you will be listed as holding a criminal record if convicted. This is something very serious to consider when it comes to future employment. The term ‘spent’ refers to when your name can be removed from the databases.

Rehabilitation Period
(the time it takes for the sentence to become ‘spent’)
Sentence Adult (aged 18+) at time of conviction Young person (aged under 18) at time of conviction
Prison sentences of more than 4 years Sentence is never spent Sentence is never spent
Prison sentences of more than 2.5 years (30 months) but less than 4 years Sentence length 7 years Sentence length 3.5 years
Prison sentences of more than 6 months but less than 2.5 years (30 months) Sentence length +4 years Sentence length +2 years
Prison sentences of less than 6 months Sentence length + 2 years Sentence length +18 months
Conditional Discharge Length of order Length of order
Absolute Discharge None None
Conditional Caution 3 months 3 months
Simple Caution / Youth Caution None – immediately ‘spent’ None – immediately ‘spent’
Other Including Compensation Order, Supervision Order, Bind Over, Hospital Order Length of the order / once compensation is paid Length of the order / once compensation is paid

How Can Stuart Miller Solicitors Help?

Stuart Miller Solicitors have defended solicitors, accountants, estate agents, mortgage brokers, bank officials and individuals for mortgage fraud for more than 30 years. Whether you are accused of mortgage fraud from a business perspective or as an individual, our fraud solicitors will bring their tenacity, their knowledge, hard work and creative problem-solving skills to defend you. We are also known as specialist mortgage fraud solicitors in London.

Our Mortgage Fraud Lawyers have substantial experience in Mortgage Fraud cases and understand how the economic climate has caused the banks and prosecuting authorities to look at some applications with a fine-tooth comb. If you are reading this page, it is likely that you are concerned about a potential prosecution. Our Mortgage Fraud Solicitors understand the reality of your predicament, the impact on your business, the stress inflicted on your family, your fears of losing your home and or your income and most of all, the unbearable level of anxiety you may be suffering.

As expert fraud solicitors with experience defending mortgage fraud allegations, we will try to give you as much information as possible to calm your anxiety. We will ensure you understand the entire process, what will happen, why and when. We will give you ‘no-frills’ direct and honest advice as to your position and likelihood of success. We will undertake a damage limitation exercise and create a strategy to defend your case, with your agreement. Why are we concerned about your mental state? Because we need you to be 100% focused on beating the prosecution case, on working with us to provide relevant and useful defence material and to be on your A-game when you are called to the witness-box to give evidence.

Defending mortgage fraud allegations is not only about specialist fraud solicitors scrutinising the prosecution’s evidence, instructing world-class financial analysts and creating the best defence strategies alongside brilliant and talented Fraud Barristers. We believe success in these cases comes with hard work and attention to detail in collaboration with you and ensuring you will add to the case by giving convincing evidence to the Jury.

We understand that being the subject of an investigation is a stressful time for our clients and choosing the right lawyer is of paramount importance. We offer a dedicated solicitor, barrister and caseworker to each mortgage fraud case, which will ensure an outstanding level of client service throughout.

Would you like to discuss your case before instructing us?

If you’d like to have a no-obligation chat with us before you instruct us to take your case, then call us today.

In addition to giving you a free consultation, we can also represent you at the police station if you’ve been arrested. We can look at securing your legal aid.

Please Contact Us and ask to speak to our mortgage fraud lawyers and financial fraud solicitors to arrange a meeting in person, online or by telephone. If you prefer, you can WhatsApp us from the link you will find at the bottom banner if you open this page on your mobile phone device.

Get in touch with us now for mortgage fraud legal help.


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