A new scheme to combat the increasing problem of mortgage fraud has been announced, with high aims to reduce the crime often linked to serious social harm, money laundering and people trafficking.

According to The Financial Services Authority FSA mortgage fraud is a “serious problem and widespread problem” in the UK. In the past 12 months 17 individuals have been banned or fined for mortgage fraud or attempts to process fraudulent mortgage applications.

The new scheme hopes to make it harder for criminals to deceive the system with a number of tough industry regulations and checks. The new measures include visits to 200 targeted mortgage intermediaries to assess their financial crime systems and controls.

The plan also hopes to enhance the way intelligence is used in supervising firms and bringing about enforcement actions.

Engagement between regulators and law enforcement partners will be increased, including more involvement from the National Fraud Strategic Authority (NFSA). Plus
information and intelligence analysis within the industry also hopes to be improved with an emphasis on clarity and improved sharing on information.

Lastly, the role of the Approved Persons regime will be reviewed, as it relates to mortgage intermediaries including brokers.

“We have set out our approach and expect the industry to do its part in tackling this menace,” says Philip Robinson, Director of Financial Crime and Intelligence at the FSA

“Brokers should make sure that they provide suitable advice and that their businesses cannot be used for the purposes of committing fraud.”

Robinson claims lenders must have in place systems and controls which allow brokers and mortgage firms to reduce the level or mortgage crime committed. Lenders must also continue to provide the FSA with intelligence- a key role in successfully lowering the levels of mortgage fraud committed.

“AMI supports the FSA and recognises its attempt to drive out criminal activity,” comments Chris Cummings, Director General of The Association of Mortgage Intermediaries (AMI).

“The current mortgage fraud crisis is leaving a shadow over the whole industry, damaging the reputation of good firms who put the needs of their clients first.”