Though mortgage lending is believed to be on the rise, a recent report from financial services company, Experian claims the number of applications detected for mortgage fraud risks has been reduced.
According to Director of Identity and Fraud at Experian, Nick Mothershaw, the property industry has witnessed 79 out of 10,000 mortgage applications being fraudulent in August 2014. This is compared to the same period in 2013 when there were 82 cases.
This decrease is reportedly due to lenders performing more extended and thorough checks on consumers, which comes as a result of greater housing demand, as well as regulatory intervention.
Consumers are now facing in-depth analysis when seeking a mortgage, including questionnaires, interviews with professionals, and a variety of other tests. The primary aim, says Mothershaw, is to prevent key issues of borrowers misleading lenders about their current credit status and falsely inflating their income.
Expedia has also reported concerns over professional adviser fraud, with brokers and financial advisers at the forefront. There is a distinct urgency for financial advisers to seek the guidance of solicitors and qualified legal professionals when dealing with mortgage transactions.
Mothershaw reports there has been more than 100 cases of third party firms being shut down by regulators within the last 8 years. Now more than ever it is crucial for conveyancers to perform adequate checks with any external individual or firm you work with during a property transaction.
Identity fraud also remains an issue within financial sector, says Mothershaw. Professionals and consumers share the responsibility of safe guarding against offenders and need to remain aware of the possible hazards and risks.
Primary targets of identity fraud, according to Mothershaw, have shifted from those with greater assets to gain, to those who have less but are easier to obtain. Such cases are said to be the most prominent amongst younger consumers, who more readily rely on online portals to perform transactions and gain advice. Lenders are believed to be gradually adapting to the need for digital platforms, with updated screening solutions being performed alongside some of the required paper-based formats.
Yet again, this highlights the need for conveyancers and property professionals to take heed and invest in security, with up to date online fraud protection.
Web-based screening systems, such as Lawyer Checker, can be used by conveyancers who want to protect themselves from being targeted by other financial and legal professionals within the industry. Bodies and regulators such as the Solicitors Regulation Authority (SRA) work tirelessly to help prevent fraud within such a lucrative industry, but it’s your responsibility to thoroughly implement required processes and comply with new regulations.
