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21/08/2009
Building Society Loses In Buy-To-Let Fraud
Chelsea Building Society has revealed that it has lost £41 million due to buy-to-let mortgage fraud.
The building society, the fifth biggest in Britain, has blamed the fraud for it sliding into the red during the first half of the year, reporting overall losses of £26 million, compared with a £23 million profit during the same period last year.
It has been revealed that the Chelsea discovered that the fraudulent loans, which were mainly among buy-to-let loans, had been made between 2006 and 2008. They said that the frauds were a result of the "artificial inflation of property values by third-party professionals involved in the transactions".
The Chelsea ceased any buy-to-let lending last year.
Commenting on the latest figures, Stuart Bernau, Chelsea's Chairman and Interim Chief Executive, commented: "The Society has been through a difficult period and reporting a loss in the first half of the year is disappointing.
"However, the underlying performance is strong even though we have had to make provision for impairment and fraud losses.
"In a competitive market, we have continued to attract strong retail inflows with our savings accounts increasing by over 38,000 in the first six months of the year, a testament to our strong and trusted brand.
"Our mortgage lending is now fully covered by our retail deposits and this has significantly reduced our reliance on wholesale markets," he said.
"This is a good platform from which to build and we are concentrating on the society's strengths by returning to its traditional values.
"We will continue to focus on providing excellent value and service to our members and Chelsea remains well placed to benefit from any recovery in the economy and housing market over the coming months."
(KMcA/BMcC)
The building society, the fifth biggest in Britain, has blamed the fraud for it sliding into the red during the first half of the year, reporting overall losses of £26 million, compared with a £23 million profit during the same period last year.
It has been revealed that the Chelsea discovered that the fraudulent loans, which were mainly among buy-to-let loans, had been made between 2006 and 2008. They said that the frauds were a result of the "artificial inflation of property values by third-party professionals involved in the transactions".
The Chelsea ceased any buy-to-let lending last year.
Commenting on the latest figures, Stuart Bernau, Chelsea's Chairman and Interim Chief Executive, commented: "The Society has been through a difficult period and reporting a loss in the first half of the year is disappointing.
"However, the underlying performance is strong even though we have had to make provision for impairment and fraud losses.
"In a competitive market, we have continued to attract strong retail inflows with our savings accounts increasing by over 38,000 in the first six months of the year, a testament to our strong and trusted brand.
"Our mortgage lending is now fully covered by our retail deposits and this has significantly reduced our reliance on wholesale markets," he said.
"This is a good platform from which to build and we are concentrating on the society's strengths by returning to its traditional values.
"We will continue to focus on providing excellent value and service to our members and Chelsea remains well placed to benefit from any recovery in the economy and housing market over the coming months."
(KMcA/BMcC)
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Northern Ireland WeatherToday:A cloudy day with a little light rain or drizzle at times, but some spells of drier weather too. The north coast may become somewhat brighter later this afternoon. Maximum temperature 11 °C.Tonight:Cloudy and patchy light rain will slowly clear away this evening. Then the rest of the night will be dry with broken cloud. Westerly winds freshening in the early hours. Minimum temperature 6 °C.
