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ASTL conference looks at mortgage fraud

ASTL conference looks at mortgage fraud

Advisers should encourage a culture and governance to help tackle the rising problem of mortgage fraud, Jonathan Newman has said.

Speaking at the Association of Short Term Lenders Conference in London on 1 October, the senior partner at Hertfordshire-based Brightstone Law suggested a number of measures, such as mortgage fraud awareness training for someone in a firm with a clear responsibility for fraud prevention.

He said that the most common examples today were identity, income, occupancy and valuation fraud. For example, he said property title fraud claims were on the rise, with a total of £23.3m claims received by the Land Registry last year.

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He referenced reports by the National Fraud Authority and credit checker Experian which cited increases year-on-year, but said the true number might be more than £1bn.

According to a fraud report by Experian, 89 per cent of attempted mortgage frauds were down to individuals painting a knowingly false portrait of their personal circumstances on applications.

Mr Newman said: “Lenders do not publish figures, or show they were victims, so it is hard to get actual figures about instances of mortgage fraud.”

Highlighting past cases of mortgage fraud, he gave examples of red flags to look out for, such as concerns laid out by the Law Society, including the use of non-bank lenders, flipping and back-to-back transactions, application hijack and claiming deceased estates.

Adviser View

Paul Dorward, mortgage adviser at South Yorkshire-based PAD Financial, said: “When it comes to accessing people’s credit we cannot access credit files, so we do not get the same information and have to rely on them providing it. Solicitors play a vital role – we have seen cases when a property was not registered and title not right.”