Warning on mortgage broker deception
Major fraud squad detectives have warned mortgage brokers and loan applicants they can face fraud charges if they provide false financial information on loan applications.
Police recently investigated allegations of deceptive conduct by a Perth mortgage broker after a client hit financial difficulty when they were unable to meet home loan repayments.
There was insufficient evidence for charges to be laid because detectives could not establish whether the broker or the client had misrepresented the client's income and assets on an application.
But police warned similar investigations in the ACT and NSW had led to prosecutions against mortgage brokers.
In April, a former Perth high-flying mortgage broker who swindled friends, fellow churchgoers and clients out of more than $4 million for an imaginary retirement village dubbed "Mormonville" was jailed for five years.
Catherine Anne Thompson's business Mortgage Miracles specialised in low-document loans, which let people with variable incomes or who did not meet traditional lending criteria get big loans. She allegedly falsified details of the value of borrowers' homes and their incomes to get deals across the line and many investors were left with debts of hundreds of thousands of dollars they could not repay.
The major fraud squad said although no charges were laid over the recent investigation, it highlighted concerns for both brokers and clients including the arrangement of multiple low document loans that borrowers could not afford to repay and misrepresenting a borrower's financial position in a loan application.
Police said both brokers and clients could be held accountable and needed to ensure an applicant's financial position was not falsely inflated.
