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Chelsea Mortgages Hit By Fraud8/22/2009 10:29:04 AM The credit crunch havoc continued yesterday as Chelsea Mortgages were hit by £41m worth of of mortage fraud. The fraud relates to the mutual’s buy-to-let book and mainly concerns lending advanced by Chelsea during 2006 and 2008. Chelsea attributes the fraud to overinflated property values by third parties involved in the sales. External consultants have reviewed the society’s entire mortgage book for suspected or proven fraud, the mutual says. The building society has also announced that Chelsea’s finance director Andrew Parsons has resigined, and will now be working his notice period while a replacement is found. Former Nationwide board director Stuart Bernau was appointed as chairman on August 1, and hold the roles of both chief executive and chairman until a longer-term replacement is found. Bernau says: "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." He adds: "Our mortgage lending is now fully covered by our retail deposits and this has significantly reduced our reliance on wholesale markets." "This is a good platform from which to build and we are concentrating on the society’s strengths by returning to its traditional values." Written by Frank Polenose of Secured Loans, Debt Help and Payday Loans |