A SOLICITOR has been arrested during an inquiry into an alleged sell-and-rent-back mortgage fraud that has affected thousands of households across the region.

The 32-year-old woman from Gateshead is being questioned by detectives investigating North-East Property Buyers and Newcastle Home Loans.

The companies offered to buy homes from people struggling to make mortgage repayments, and then rent them back to them, but have allegedly defaulted on the payments themselves.

As a result, hundreds of people are thought to have received eviction notices as the mortgages lenders attempt to regain their money.

The investigation has resulted in raids at the offices of several North-East estate agents, including David Oliver, a former estate agent in Duke Street, Darlington.

Andrew Oliver Bellwood, a partner in David Oliver, was arrested on suspicion of money laundering in March after £34,000 was found in his home in Newton Aycliffe, County Durham.

Craig David Purdie, a former appointed representative of Newcastle Home Loans and a partner in David Oliver, is also being investigated, as are Mr Purdie’s stepmother and father, Grace and David Purdie.

The couple are each thought to be directors in North-East Property Buyers and Newcastle Home Loans.

Although no formal charges have been brought, about 15 professionals in the housing industry have been arrested and police say more are likely to follow.

Detective Chief Inspector Jim McCall, from Northumbria Police, said: “A complex mortgage fraud cannot be perpetrated without the assistance of professionals such as solicitors and surveyors.

“Often these professionals will be acting in good faith, but if we get evidence to suggest that they are complicit, then we will treat them as criminals.

“This investigation focuses on an organised crime group who have allegedly fraudulently obtained some 2,000 mortgages from various lenders, and we believe that several local solicitors and surveyors have been involved.”