The news that the FSA is appealing for help from brokers in its fight against the rise in mortgage fraud, requesting greater collaboration and coordination between the different sectors of the market, was more worrying than it might seem.
Having already banned around 20 brokers this year, the FSA is not letting up in its quest to stamp out mortgage fraud. Whether this is because there has been an increase in the amount of fraud perpetrated or just because this is the first time the FSA has looked at it in any detail is academic. However, to suggest that brokers have been turning a blind eye tarnishes everyone with complicity. And from the flurry of responses we received as soon as the story went up on our website, it seems that brokers do contact the FSA as a matter of course, but to date have seen little action taken on the strength of these tip-offs.
The fraudulent actions of a few need to be stamped out, but to imply publicly that fraud is not being reported is a bit much. It smacks of a witch hunt, and we need to be strong in our response. Let us be clear: mortgage advisers are not responsible for the situation that the market finds itself in.
It is to AMI’s credit that its response urges brokers to put their own house in order first before running to the FSA. But the question remains, where does it stop? Yes, bad firms must be reported for the good of all, but turning the industry on itself will create an air of mistrust that we could do without.
The FSA is also having another run at lenders changing unfair fees. It has found a number of lenders still include variable terms that constitute unfair contracts, and is threatening further regulatory action if they do not change them. This is another laudable move, but it doesn’t seem to be asking lenders to shop each other, so why brokers? n
