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The fight against fraud

Figures from Financial Fraud Action UK have reveal that, on average, a financial scam was committed every 15 seconds during the first six months of 2016. In light of this, it is clear that although a proportion of intermediaries have continued to increase their defences against mortgage fraud risk, there is still a real need for greater vigilance. Suspicion of fraudulent activity on the part of the client is still the most common reason for intermediary expulsion from lender panels. This is just one of the reasons why it is imperative that we have good, strong relationships with intermediaries that are built on trust, as we are reliant upon them to really know their client’s circumstances and personal information. For example, they may have historic credit issues or could be looking at a specialist buy-to-let mortgage through a limited company structure.

Detection and prevention

Once the correct and essential documentation is received it must be verified thoroughly and, as well as communicating clearly, intermediaries should be alert to all parts of the mortgage chain. In other words, an increased awareness from intermediaries could certainly go a long way to helping to detect and prevent this growing trend.

Although digital technology and robo-advice are likely to play an important role in the vanilla mortgage market, one of the upsides to the specialist lending market is that it requires more human, face-to-face interaction with lenders. This is simply due to the nature of the market and because there are, in my opinion, components of the mortgage process where human interaction will always be necessary.

Despite prevention schemes and ongoing regulations to eradicate mortgage fraud, it remains a large threat and one that intermediaries should remain alert to. The sector must ensure it remains transparent and has particularly robust resources and systems in place to help intensify the crackdown on mortgage fraud. It is a widespread problem that needs to be eliminated quickly and with a greater focus and commitment from the mortgage market as a whole.