NEGATIVE EQUITY

Viaduct needs to rub it in, people just do not listen or even understand that they are being ripped off. Just read the following which was not written by Viaduct, but shows the con merchants will stop at nothing and hope to suck in more of you uneducated people.


New rules for valuing properties
Man looking in estate agent's window
The Financial Services Authority is cracking down on mortgage fraud

Mortgage lenders are to change the way newly-built properties are valued to prevent possible mortgage fraud.

The Council of Mortgage Lenders (CML) says new rules will help stop mortgages being granted that were worth more than the value of the home.

Some developers could be tempted into offering incentives to buyers, such as cash-back offers, as the market slows.

But lenders were concerned that they were not always being informed about the discounts and deals on new flats.

Other incentives have included developers offering to pay buyers' deposits, pay legal fees, clear the stamp duty or pay for the cost of moving.

'Bad news'

The CML warned in February that the trend could mask the real value of new homes.


We are introducing these measures to help sustain confidence in the market for newly-built properties
Michael Coogan, CML

Buyers could find themselves with a mortgage worth more than a property's value, and so face immediate negative equity, the CML said.

Lenders would also find themselves at risk of fraud or losses. A disproportionate number of fraud cases have involved newly-built apartments in city centres

Lenders are supposed to be told about any deals by the professionals who do the conveyancing, typically solicitors. Yet, the deals could be hidden from these people too.

Rule changes

From 1 September, builders and developers of newly-built and converted properties will have to fill out a form which ensures all incentives are disclosed.

The CML and the Royal Institution of Chartered Surveyors (Rics) will make this a specific requirement in their books of rules.

"We are introducing these measures to help sustain confidence in the market for newly-built properties," said CML director general Michael Coogan.

Rics spokesman Barry Hall said: "All parts of the property industry are in agreement that standards must be maintained and that the consumer must be protected from any disingenuous practice."

The Home Builders Federation and Homes for Scotland supported the move, saying that it built upon the work they did to strengthen their codes of conduct earlier in the year.

"These initiatives will ensure that housing developers maintain the confidence of mortgage lenders, and help facilitate the process of buying a new home," a Home Builders Federation spokesman said.

The Financial Services Authority have been cracking down on mortgage fraud this year, and the Association of Chief Police Officers has said it is a significant element of the UK's annual fraud losses.