Regular readers of our CeMAP articles will know that in recent months the FSA has fined and banned many mortgage advisors – approximately 20 to date. With the problems of the credit crunch, it seems that some mortgage advisors are deliberately falsifying information to help their customers get a mortgage and this problem could become worse.
The Financial Services Authority (FSA) is now demanding that they want more action taken. They have asked lenders to increase their checks on mortgage applications. The FSA is also targeting more than 200 broker firms to check that they comply with procedures in place.
Philip Robinson, director of the FSA’s financial crime and intelligence division, said: “The FSA continues to take very seriously the question of whether lenders’ systems and controls for dealing with mortgage fraud are proportionate to the risk. We are likely to take particular note of cases where weaknesses in due diligence and customer checks – or in outsourced relationships with third parties – may have contributed to a heightened mortgage fraud risk.”
The Council of Mortgage Lenders welcomed the move and a spokesperson said:
“People may not think of lenders as victims of crime, but unless fraudsters are tackled then honest customers are the ones who end up paying more. We expect that even more lenders will now participate in the voluntary initiative designed to identify and investigate broker fraud.”
During CeMAP training, FSA regulations are discussed and the importance of being aware of fraud is highlighted.