Mortgage fraud is estimated to cost the UK economy £1 Billion (GBP) every year, according to the National Fraud Authority (NFA).
MyPropertyPowerTeam.com takes a look at the steps some bridging lenders are taking to mitigate fraud and how they vet the solicitors and valuers that they work with.
It is important to ensure that all mortgage lenders’ procedures and vetting measures are consistently in check, particularly for those lenders who outsource their professional services regularly.
In light of the increasing number of products and services being offered by lenders entering the short-term lending sector, the FSA are keeping a close eye on any poor practices.
But, are the systems and controls in place to detect and prevent mortgage fraud robust enough in the industry?
Banks and mortgage lenders are being extremely vigilant when looking at how vulnerable their own systems and controls could potentially be and in what places they can be improved.
The FSA are also keen to crack down on poor practices and in December 2011, they published a guide, entitled Financial Crime: A Guide For Firms.
This document provides guidance to firms on steps they can take to reduce their financial crime risk and is designed to help firms adopt a more effective, risk-based and outcome-focused approach to mitigating any financial crime risk, which includes examples of good and poor practice.
Many Bridging lenders have made substantial investments in ensuring that they mitigate fraud and are using both automated systems and human intervention to detect fraud.
Good bridging companies choose solicitors that they deal with very carefully and will have carried out due diligence to mitigate the risk of solicitor fraud.
New systems actively search and cross reference data from all lender members and multiple government agencies for any indications of fraud including identifying and investigating potential fraud as well as money laundering and the identification of Politically Exposed People (PEP).
Want to avoid Mortgage Fraud? Find a reputable mortgage broker here
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