Mortgage Fraud Drives Up Solicitors Legal Costs

Tue, 15 Sep 2009

The cost of compensating victims of corrupt solicitors has been driven up by rising levels of mortgage fraud . Average legal costs have risen by 160 per cent for such cases, as the charge levied on solicitors in England and Wales is to rise from £150 to £390.

In response to rising mortgage fraud, the Solicitors Regulation Authority (SRA) had recommended that the Law Society increase the fee by £320 to £470, though the increase has not been as severe as requested. The SRA maintain that their compensation fund remains solvent, and even voiced predictions that they could have money left over at the end of the financial year. It isn’t the first time the Law Society has ignored a request from the SRA, with a similar request to increase the levy to £300 for each solicitor declined in 2008.

The news follows a warning from the City of London Police fraud squad last month, revealing a rapid increase in the level of mortgage related fraud. Such fraud typically involves lawyers and surveyors exploiting home loan providers, overvaluing properties to defraud lending institutions. The SRA’s figures reveal an increase of more than a third in the past two years, with reports of mortgage fraud rising from 215 in 2006 to 350 in 2008.
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