An intelligence report out in London states that criminal gangs are generating income and laundering money through the use mortgage fraud activities.

From The Times: 

Terrorists and criminals are conning British banks out of £700 million a year to help to finance their illegal activities, a police report has revealed.

An intelligence report by the Association of Chief Police Officers said that organised crime groups used mortgage fraud to generate income and launder money from the proceeds of their operations, such as drugs, human trafficking and prostitution.

The fraud is generally committed by overvaluing a property.

Fraudsters can con lenders out of money by using corrupt surveyors to issue false valuations. This allows them to apply for a loan that is larger than the value of the property. In addition, they will usually apply under a false name, supported by false documentation, and later fail to make any repayments.

On a larger scale, solicitors can assist criminals to secure mortgages illegally. The buy-to-let market is particularly vulnerable to mortgage fraud, whether through new-build apartment complexes or large-scale renovation projects. In January, a High Court judge ruled that a former head of valuations at a subsidiary company of the troubled property services company Erinaceous was liable for an £11.5 million mortgage fraud after he overvalued a property.