866% mortgage anyone?

Six solicitors who committed possibly one of the largest mortgage frauds ever carried out in the UK have now gone on trial at Southwark Crown Court.  The jury have heard how the fraud was committed by conning banks and building societies into lending almost £50 million for properties that were only worth an estimated £6 million.
Reports state that the solicitors, who had acted for various companies between February 2005 and March 2006, had applied for the loans after allegedly selling the properties to each other in order to inflate the asking price.
Andrew Baillie QC said:
"This is not an 80 per cent or a 90 per cent mortgage but, taking all of these loans together was the equivalent of an 866 per cent mortgage.
When they realised the properties were worth only a fraction of what they thought, it was too late. The money had been distributed, a very substantial part of it sent abroad and the banks were left to whistle for their money."
He added: "It must be one of the largest mortgage frauds ever perpetrated in the UK.  The question that this trial has to address is whether each of these defendants is guilty of acting fraudulently."
The investigation was initially referred to the Serious Fraud Office in March 2006 by West Midlands Police following a complaint from the Cheshire Building Society.
Mr Baillie said that one of the properties involved, a property in Alma Street, Smethwick, in the West Midlands, was valued at an inflated £2.3m, but once it was repossessed it sold for "a nasty loss" at just £100,000.
The six solicitors have also been charged with offences in relation to the alleged fraud but have pleaded not guilty.  The prosecution said:  “These six defendants are all solicitors and the prosecution’s case is that they also acted dishonestly.”
The trial is expected to last around 12 weeks.
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