Cathy
The report refers to the so called property company 'Atrex' which purchased the majority of Hill House by bulk purchase from Persimmons. Atrex were struck off by Companies House some months ago and I believe the named people could not be identified.
Criminals who set themselves up companies such as 'Atrex' also furnish themselves with dodgy mortgage brokers, solicitors and accountants all from their own community. It is these incestuous, so called professional facades which has allowed this fraud to go unchecked. Subprime is implicated, networks of criminal gangs from overseas, developers and mortgage lenders along with the government are all implicated in this.
If anyone is to receive compensation for this - it should be those of us who bought directly from the developers themselves in good faith and who now have negative equity and a ghetto lifestyle that would be the envy of Old New York. Yet again, it is honest hard working households who pick up the tab.

First time buyer, West Thamesmead - London, England

We bought on one of the developments in West Thamesmead that was targetted by these criminal gangs.
Developers selling practices and their lack of care for building sustainable communities (mass buy to let does not make a sustainable community) has been contributory by way of mass selling discounted block buys to fraudulant/errant landlords. Few first time buyer incentives were practically non-existent in the area and were often reserved to the last few properties left. Housing shortage? There's no shortage here - just a shortage of honest cash and honest people.
We do indeed have negative equity of £20,000 on our property but that is due to the high rates of repossessions and high levels of unsociable behaviour. We are paying for them.
Whilst the rest of London experienced increasing property value we were unique in that ours was decreasing. Overseas criminal gangs and their partners in crime have ruined our quality of lives and also ruined our experince as first time buyers

First time buyer, West Thamesmead - London, England

Yes Cathy it can and has. In the eighties boom (followed by bust) lawyers, bankers, surveyors etc were all involved in fake mortgage applications. Nobody bothered of course 'il it all came crashing down.

wadey, Lancs, UK

I know of a few BTL investors who misstated the position on their mortgage applications, little thinking that they were commiting a serious criminal offence which can lead to years in jail (the courts take a dim view of stealing from banks - whether at the point of a gun or at the point of a pen!). As articles of this type bring the message home, these borrowers are indeed rushing to estate agents in the hope that they can escape undetected.

George, Brighton, UK

The problem with surveys is that the price is based on the value of similar properties in the same area. As there is no scientific formula for valuing something, all that you can go on is the price that someone paid for a similar thing previously.

As story highlights, the developers were selling the properties for well above their value, thus establishing a value for future properties to be valued against.

I believe what they did was increase the value of the first few properties fraudulently to push up the prices of future sales to genuine buyers.

Lee, Macclesfield, Cheshire

Mortgage Lenders fighting for market share have cut so many corners that they have left themselves open for serious fraud, which main stream lender will be brave enough to accept the truth and pull out of the self cert fastrack processing market for employed applicants? Self Cert / Fastrack mortgage applications are offered because the lenders do not want know the truth of extreme lending income multiples being made, its time for the FSA to pull the plug unless they are also scared of the truth!

Peter, Sevenoaks, Kent

Its amazing that this is only coming out now and people are acting all amazed and disgusted. Is this not the business world which people promote. Is is not what people call finding the "loop hole". I blame the lenders as they should be more diligent as opposed to negligent when lending money as they are the ones helping facilitate it. People would not be able to buy the BTL properties in the first place if the lender was not willing to lend the money.

T. Morris, London, England

Exactly Cathy,

It is the Building Society's problem and I think that the BOE are subtley implying this.

I do not forsee Mr. Brown allowing the BOE to dip into funds to 'compensate' reckless lenders (or borrowers come to that).

Calvinistic principles can be admired in some situations.

Pete Balchin, Solicitor , Bristol, UK

It is obvious this has been going on; this whole house price inflation has been on the back of both sub prime numties and fraudulent companies. The whole market is corrupt and should be shut down; anybody buying a house today is a complete fool and deserves to lose their shirts.

james bennett, Manchester,

How many BTL investors are guilty of fraud by, for example, taking out a residential mortgage for an invetsment property? Whilst prices have been rising no one has really cared, lenders won't look too closely when everything is running smoothly. However, if, as is looking more and more likely, the property market turns and these BTL investors find their properties being repossessed it is certain that lenders will pull out all the stops to get their money back. After repossession, bankrupty to recover any shortfall and a criminal prospecution for fraud - with a possible prison sentence as a result. I presume that any BTL investors who did lie on their mortgage application are rushing to the estate agent almost as I type - in the hope that they can sell before the market collapses, pay off the mortgage, keep any profit and remain hopeful that their fraud will never be discovered.

Graham, Oxford, UK

Nobody bothers about fraud in a rising market and the lenders only have themselves to blame. Why didn't they get independant valuations? As I have commented elsewhere the next election could well take place in a climate of depression with millions in negative equity etc. There won't be a property ladder more a property slide and I for one will welcome it. If they only lent 3 times income of ONE buyer and a 10% deposit house prices would reflect wages.

wadey, Lancs, uk

Perhaps now people will realise that the prices they've paid for ALL property in recent years has been totally daft.

Wouldn't like to be holding onto a property portfolio over the coming months , ouch.

Still , you makes your bed as they say.

Death by Donut, Glos',

I cannot understand this report. Were the appartments not valued by the mortgage-lenders' appointed surveyors before the money was lent? In addition, how did the borrowers manage to mis-state their earnings - did the mortgage-lenders not require proof from employers or properly certified accounts? This report suggests that there has been gross imprudence on the part of the mortgage lenders and/or a massive conspiracy to defraud. Can this really have occurred?

Cathy, Bristol, uk