Q: I’m keen to know how to spot clients clearly trying to pull a fast one on a mortgage application where it isn’t so obvious.
Can you offer some solid tips on how to spot fraudsters and protect the firm and myself?
Richard Sexton, business development director of e.surv
A: Fraudsters are nothing if not resourceful and the nature of fraud is an ever changing one, as criminals seek new methods to breach lender defences.
As often the only individual to physically see the property and meet the applicant, valuers have a crucial role to play as the eyes and ears of the lenders.
In June alone, e.surv raised more than 100 instances of potential fraud for the attention of our clients.
Importantly, e.surv is effective in this role partly because we don’t disclose all our current anti-fraud measures.
However, some top tips from a valuer perspective are:
- Identity fraud – fraudsters obtain keys to a property and pose as a selling agent, insisting on meeting a valuer on site rather than allowing the keys to be collected.
- Disguised buy to let – if you can visit the property, look for evidence of one or more tenants in situ with no signs of moving out.
- Disguised let to buy – a relatively new type of fraud, where the purchaser is unable to obtain a standard mortgage and applies for buy to let, with no intention of letting. Question the potential ‘landlord’- do they have a good understanding of the local letting market, supply and demand, likely rental values, target tenants etc. Do they have a pre-existing portfolio?
- Back-to-back sales – It is not unheard of, but it is unusual, for properties to be resold soon after being purchased. Check out the Land Registry for recent transactions for the property.
- Property substitution – This is particularly in relation to new build. A recent court case found against a valuer who had deliberately been shown the wrong unit on a site to influence his valuation figure.
- Make sure the property being inspected is the subject property, as far as possible, look for evidence of number changes on the front door – a 6 becoming a 9 etc.
