Page last updated at 11:03 GMT, Tuesday, 31 March 2009 12:03 UK

Homeowners at risk due to 'fraud'

More than 2,000 homeowners in North Tyneside face uncertainty as police investigate two mortgage companies.

Officers are examining the affairs of North East Property Buyers and Newcastle Home Loans.

Earlier, police raided properties in Gateshead and Durham amid claims about the businesses mortgage dealings.

A police spokesman said some residents had received notification that their mortgages defaulted. He added it was likely to be a long investigation.

'Protracted investigation'

Officers from Northumbria Police Economic Crime Unit seized £20,000 and a large amount of documents during the raids.

Det Insp Phil Butler said: "We are at the start of what is likely to be a protracted investigation.

"Understandably a lot of residents will be concerned. Some of them have received notification from the some of the financial institutions because the mortgages defaulted.

"We understand there are about 2,000 homes affected."

The Financial Services Authority (FSA) initially investigated the claims and passed their findings to the police.

In February, the FSA fined Newcastle Home Loans £170,000 for breaches of FSA rules.

No one was available to comment from either company.

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