The price for years of excess

IT'S only when the tide goes out that you can see the detritus left behind on the beach. This old saying is as true of the economy as of the coastline and now, three years after the onset of the credit crunch, the disturbing level of losses faced by Yorkshire's mortgage lenders is becoming apparent.

The figures by accountants KPMG show this means of financial crime has soared. Much of it is down to a large number of bad loans made at the height of the property boom, but there are several other reasons why the unscrupulous were able to make a quick buck during the good times.

A mixture of slackness, recklessness and blind optimism meant lenders poured money into developments with only a scarce idea of where it was going. As such, it is time for an overhaul of the way money is loaned for property, whether it is for individuals buying homes or entrepreneurs and businesses purchasing land for developments. A reform, of sorts, has already begun with the credit drought cutting lenders' exposure to criminal investors.

More needs to be done, however. Banks have a responsibility to be more diligent, and more intelligent in the way they spend money which in reality comes from shareholders and honest customers. There is nothing sophisticated about following a glut with a famine and financial institutions should rediscover the prudence that once characterised Britain. It is vital banks start lending again to the responsible house-buyers and entrepreneurs who can help propel this country back to economic prosperity.

Government too has a role to play. Labour clearly failed to get to grips with an escalating problem and this is one of the areas where coalition Ministers should not hesitate to intervene. The police, meanwhile, need to be given the resources to tackle the costly menace of mortgage fraud. The success of forces' economic crime units shows it is being taken seriously but such cases involve long and complex investigations and many months spent combing through accounts.

The fight against mortgage fraud has begun but, long after the tide went out, an ugly scene remains. The clear-up job has barely begun.