The penalties faced by those who commit mortgage fraud are high, says Christine Newell, partner manager at Paradigm Mortgage Services.
She says mortgage fraud can cost an intermediary their livelihood which means that they will never work again in financial services.
They can receive large fines through enforcement from the regulator. The ultimate penalty for any person involved in mortgage fraud is a prison sentence.
In December 2014, a Swansea-based gang who carried out mortgage fraud of more than £5m over an eight-year period were convicted and are now serving jail terms of up to eight years. The defendants made fraudulent applications using fake names and falsified documents.
In October 2014, a former pilot was jailed for 14 years having been convicted of coordinating £30m worth of mortgage fraud. He posed as a property developer, using corrupt solicitors and accountants to help approve his false mortgage applications.
If authorised by the FCA, the firm or individual would be fined and /or struck off the FCA register.
Failing to take steps to identify and prevent fraud is the most common reason for enforcement action against mortgage lenders, according to Mark Spiers, head of wealth at Bovill.
emma.hughes@ft.com
