Mortgage Lenders and The FSA Join Forces
Posted on April 12, 2006
Filed Under Mortgage Updates
The Financial Services Authority (FSA) has joined forces with lenders to try and stop the rampage of fraud that has only risen in the last few years. Mortgage fraud is costing everyone in the business billions of dollars annually and it doesn’t look as though it is slowing down anytime soon.
The two are setting up a system in which they hope to reduce the amount of fraud that involves applications handled by intermediaries.
Stephen Bland, Director of FSA’s Small Firms Division:
“We very much appreciate the input and co-operation of the CML and lenders in this important initiative. It is the first time we have used information of this type in this systematic way, and it is an example of our strategy of working with the market to supervise small firms working effectively in practice. Mortgage fraud is a serious matter and can lead to criminal proceedings both for intermediaries and mortgage applicants. We are looking to all lenders to help us in the fight against this practice.”
Michael Coogan, Director General of the Council of Mortgage Lenders:
“We welcome and support this new, co-ordinated approach to collecting information on fraud. We hope that it will make it easier for the FSA to identify systematic suspicion and act quickly upon it.”
Rob Griffiths, associate director of the Association of Mortgage Intermediaries (AMI):
“We’re delighted to support anything that reduces mortgage fraud as fraud is detrimental to the entire industry. AMI takes mortgage fraud very seriously and has produced member guidance in the form of our ‘Fraud Prevention’ factsheet which is available from the AMI website.”
Examples of mortgage fraud include:
Proven Fraud
- Fraudulent documentation, for example bank statements, utility bills, wage slips, Passports, Driving Licenses etc;
- False employment or income details;
- Inconsistent information relating to the same applicant, i.e. various applications made with different incomes/details either to the same lender or lenders within a group.
Suspected Fraud
- Doubts over income and employment details;
- Links with other applicants where fraud is suspected, for example shared addresses, purchases on same development, identical loan amounts etc;
- Links between different mortgage applicants, for example shared bank accounts, and addresses;
- Applications cancelled when further information/verification is requested;
- Suspected fraudulent documentation.
Source: First Rung
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