Mortgage fraud complaints soar

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Eli Devoy, 47, was convicted last month on a raft of charges related to mortgage fraud. Photo / Greg Bowker
Eli Devoy, 47, was convicted last month on a raft of charges related to mortgage fraud. Photo / Greg Bowker

Mortgage fraud complaints soared during the past year.

Figures released to the Labour Party and shared with the Herald show the Serious Fraud Office (SFO) received five complaints about alleged mortgage scams in the year to March.

That's more suspicious mortgage activity since at least 2010.

Only one mortgage fraud complaint was made to the SFO during 2014 and two were made the year before that.

Not a single instance of alleged mortgage fraud was reported to the SFO in 2012.

Of course, just because people complain about fraud doesn't mean it's actually taken place. Only one of the five complaints received in the last year resulted in a formal investigation, the SFO said on Friday.

I would not be surprised if the promise of alluring returns from Auckland's red-hot property market was enticing some buyers to stray into dishonesty.

Fraud, after all, tends to follow the money.

Labour housing spokesman Phil Twyford said he believed that the "massive speculative gains" were proving an "irresistible temptation" for some.

"Along with the frenzy of speculative activity in the housing market and the spate of dodgy behaviour by real estate agents ... these are symptoms of a wild west housing market," Twyford said.

Prosecutions for mortgage fraud, while not exactly rare, are hardly the SFO's stock and trade.

Of the 80 or so cases the fraud-busting agency has brought to court since 2009, seven have involved mortgage scams.

One of these was a $9.2 million racket where banks lent funds on the back of false information and where properties were bought and sold between family and friends.

Auckland businesswoman Eli Devoy, who was found to be central to this scheme, was convicted last month on a raft of charges.

The 47-year-old is facing jail time when she is sentenced in August.

- NZ Herald

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