CML welcomes FSA mortgage fraud thematic review
Published: 22 June 2011
The Council of Mortgage Lenders welcomes today's recognition by the Financial Services Authority in its thematic review of mortgage fraud that "the industry has made progress in getting to grips with this problem over recent years. Defences are now stronger, and the value of cross-industry cooperation is better recognised."
The CML will now look to work with the FSA and lenders to strengthen anti-fraud measures further still, in the light of the FSA's findings that suggest weaknesses in some areas of the mortgage industry could undermine the effectiveness of the sector's overall efforts to ensure that fraud is identified before it can be perpetrated.
As the FSA has identified, the high incidence of solicitor fraud has led lenders to strengthen checks on their solicitor panels significantly, and intelligence to help lenders have confidence in the integrity of other key professionals in the mortgage process is also vital.
In particular, the CML will look to ensure that it helps the FSA to encourage good engagement in the "Information from Lenders" scheme, and other measures that help to improve collaboration and information sharing within the industry to help stamp out mortgage fraud.
CML head of policy Jackie Bennett commented:
"Prevention is better than cure, and information systems that help lenders to spot potential fraud play an important role. As the FSA points out, the pilot scheme from HM Revenue & Customs that enabled lenders to cross-check prospective applicants' income details was able to stop £111 million of suspect lending. We look forward to the rollout of a fully-fleshed version of this scheme for all lenders soon."
"We are working extensively with the National Fraud Authority, the police, and lenders, to ensure that the right resources are in place to investigate and prosecute fraud. Recent successful convictions should leave fraudsters in no doubt that the industry is committed to pursuing them, and that for perpetrators a jail term is a serious prospect."
Notes to editors
1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 94% of all residential mortgage lending in the UK. There are 11.3 million mortgages in the UK, with loans worth over £1.2 trillion.
2. The mortgage fraud against lenders thematic review is available on the FSA website.