Brokers must be vigilant on mortgage fraud
By Bridging Loan Directory -
John Malone of Sesame Bankhall Group used his seminar session at today’s Mortgage Business Expo in Manchester to spell out the need for greater vigilance by brokers when it comes to determining potential cases of mortgage fraud.
Malone said the “level of mortgage fraud has remained relatively static in the last 12 months” however there were a variety of sectors which were more prone to fraudulent activity than others. He said these sectors generally involved so-called ‘dabbler’ brokers and were more likely to be in sectors such as buy-to-let, equity release and bridging finance.
Malone said: “There is a big problem with buy-to-let and this is where most of the fraudulent activity is taking place.”
He also suggested that lenders admitted to him that they had more of a problem with fraud within their branches rather than through intermediary business. He said: “In some respect they have taken their eye off the ball with regard to their own branches and call centres. [However] it is so difficult to judge what is a genuine, and what is a fake, document.”
He recounted a recent conversation with a lender on the scale of the problem they faced: “I met with a lender who gets 1,500 applications per week and they believe 12 to 15% are fraudulent…and most of them are in the buy-to-let market.”
Malone also flagged up the potential fraud risk of brokers allowing their introducers to submit cases, and deal direct, with a lender using the broker’s authorisation number. Malone said it was “beyond belief” that an FSA- registered broker would allow this and put their whole livelihood at risk.
Finally he highlighted the progress that had been made across all mortgage stakeholders in tackling fraud and said it was the widespread sharing of information which would continue to reduce fraud.