Causes and Conditions which Influence the Commission of Frauds in Mortgage Lending

Abstract

This article researches the causes and conditions that contribute to the facilitation of the commission of frauds in the sphere of mortgage lending. We present the arguments which regard to the importance of mortgage lending as a key factor of the economic development stimulation. Their efficient use will provide the increase of investments’ income in the Ukrainian economy. It was found that the development of mortgage lending system allows the growth of the national income and GDP, increases demand and reduces unemployment, helps to solve a number of social and economic problems of society and to accelerate the country’s economic development. The paper identifies the main groups of determinants which impede the efficient functioning of the domestic mortgage market as well as create favorable conditions for committing frauds. Researched causes and conditions of crime are the major and the most complex tasks of criminology which always attract attention of native and foreign scientists. The effectiveness of combating such negative phenomena as frauds in the sphere of mortgage lending can be increased as a result of their solutions and analysis. The paper deals with thesis that the banking sector is closely linked to economic, political, legal, moral and other spheres of life. This is due to the fact that each of them requires money, which are carried out by the banks. In addition, the sources for income lenders are the cash flows from one to the other, which are accepted by banks. That is why a close relationship with different social spheres is a prerequisite of successful banking. It is not surprising that the frauds committed in mortgage lending are typical for its intensive development under the influence of various social factors that are directly attributable to this sector. It should be noted that the worsening criminal situation in the area of bank lending is typical to the banking system as a whole. Determinants can be divided into two main groups. The first includes the general social factors and accumulates all the flaws, omissions and failures in social and economic policy of the economic management, the functioning of government and its management; and the second – deals with specific features of the banking system.