In the UK, mortgage fraud is typically prosecuted under the Fraud Act 2006, and the penalties can be quite severe. Here’s a breakdown:
What the Law Says
- Under the Fraud Act 2006, giving false information (e.g. on a mortgage application) is an offence. Legislation.gov.uk+2Crown Prosecution Service+2
- Depending on how the fraud is committed, it could be:
- Fraud by false representation (e.g. exaggerating your income) Legislation.gov.uk
- Fraud by failing to disclose information (if there’s a legal duty to disclose) Legislation.gov.uk
- Fraud by abuse of position (e.g. misusing a trusted role) Crown Prosecution Service+2Adam Law Solicitors+2
Penalties for Mortgage Fraud
Here are the possible punishments:
- Imprisonment
- Maximum sentence is 10 years if convicted on indictment (i.e., in a serious court). Legislation.gov.uk+2Ashmans Solicitors+2
- On summary conviction (a less serious court), you could get up to 12 months. Crown Prosecution Service+2Legislation.gov.uk+2
- In practice, shorter sentences are common for less serious fraud, but big or organized frauds can lead to much longer prison terms. Stuart Miller Solicitors
- Fines
- Unlimited fines are possible for fraud under the Fraud Act. Money Saving Guru+1
- The actual fine depends on “harm” (how much money was lost or risked) and the “culpability” (how deliberate / serious the fraud was), as per sentencing guidelines. Sentencing Council+1
- Confiscation / Asset Recovery
- Under the Proceeds of Crime Act, courts can order seizure of assets or money obtained through fraud. Moeen & Co. Solicitors+1
- Compensation orders are also possible — the offender might have to pay back money to the victim (e.g. the lender). Sentencing Council+1
- Other Consequences
- A criminal record, which can make future borrowing or employment very difficult. Money Saving Guru
- Regulatory consequences: for example, if the fraud involves a professional (like a mortgage broker), they could be fined by regulators or even be barred / struck off. FT Adviser
- Possible suspended sentences, in less severe cases or if there are mitigating factors (like a guilty plea, low loss amount, no previous record) Ashmans Solicitors
How Sentencing Works (Guidelines)
- The Sentencing Council’s Definitive Guideline on fraud is used for sentencing. Sentencing Council
- Sentences are based on:
- The actual or intended loss (harm) — how much money was defrauded or at risk. Sentencing Council
- The culpability level: how deliberate or planned the fraud was. Sentencing Council
- Aggravating / mitigating factors: e.g., destruction of evidence (aggravating), or cooperation / remorse (mitigating). Sentencing Council+1
- As an example: in a case cited by the Sentencing Council, someone overstated their income to get a £300,000 mortgage, but the actual loss to the lender was under £5,000. The court treated it as “medium culpability” and a “risked loss,” leading to a starting point of 18 months’ custody, which was reduced to 12 months, and then further reduced to 8 months because of a guilty plea. Sentencing Council
Bottom Line: If you’re caught committing mortgage fraud in the UK, you could face up to 10 years in prison, unlimited fines, and asset confiscation, depending on how serious the fraud is.
