The National Fraud Authority and the Metropolitan Police have brought together all the key partners in the mortgage community to establish the Mortgage Fraud Forum. The aims of the forum is to make it much harder for criminals to commit mortgage fraud, as well as to tackle top mortgage fraudsters and increase awareness of mortgage fraud and the damage it causes. The NFA estimates that the annual value of mortgage fraud is £1bn, and without continued cooperation, that figure could increase.
.“Working Together to Stop Mortgage Fraud”, is the NFA’s second update report on the progress the mortgage community is making to address the threat this crime poses to the UK.
Its report says the FSA has recognised this risk and has expressed an intention to re-focus its attention away from brokers and onto the lenders. It has also published a set of proposed changes to the way it regulates the mortgage market which incorporate a number of measures that would, if implemented, impact on mortgage fraud.
The NFA mortgage fraud report notes that significant progress has been made by public and private organisations involved in combating mortgage fraud in the past twelve months, but urges stronger joint efforts by both sectors to more effectively respond to new fraud threats.
The report also highlights key issues and shows how the mortgage community is responding. One of the key issues highlighted in the report is the difficulty lenders and intermediaries sometimes have in identifying fake and falsified documents within the mortgage application process.
HM Revenue and Customs ran a pilot scheme to assist lenders and this helped to prevent attempted commercial frauds with an estimated total value of over £111m. its report says the mortgage community is fighting fraud more effectively by targeting corrupt mortgage intermediaries, solicitors, licensed conveyancers and surveyors engaged in fraudulent activity. Investigations by the Solicitors Regulatory Authority into solicitor involvement in mortgage and other property fraud have saved lenders between £15-20m.
The City of London Police, which is the National Lead Force for fraud, is currently working on 15 investigations into organised mortgage fraud worth millions of pounds, up from four in 2008, with a number of arrests in several cases.
NFA CEO Bernard Herdan says: “In the economic downturn, there has been a reduction in the availability of products that were targets of fraud such as sub-prime, buy-to-let and self-certified mortgages. The economic climate also has increased pressure on lenders to reduce costs, so there has been a greater emphasis on fraud prevention, detection and recovery of losses. The NFA urges mortgage lenders to maintain this robust approach in the anticipated economic upswing.”
http://www.attorneygeneral.gov.uk/nfa/WhatAreWeSaying/NewsRelease/Pages/160310release.aspx
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