Lenders’ confidence will have been shaken by the torrent of fraud news that has cascaded into their inboxes recently.
Mortgage fraud has risen 14% since the recession, and valuations fraud, in particular, has been a hot topic, with news that Countrywide set aside a £12m provision for over-valuations claims in 2010. This is a potential tell tale sign of a perceived lack of confidence in the quality of surveyors and their output on lenders’ valuation panels, and the quality of the management information that lenders receive.
When lenders lose that confidence in the panel and the quality of the report it is bad news for everyone else and the effects permeate down through the property transaction chain. Brokers are one of the victims.
The good news is that in today’s smaller marketplace there is greater pressure to be innovative, and go some way to solving the problem.
Lenders are currently focusing on the need for real time valuations. They want alerts that go out to risk and compliance teams when reports submitted by surveyors present an over-valuations risk. That sort of innovative technology minimises their risk and gives them greater confidence in the process.
The solution to calm the frayed nerves of lenders? Agile and innovative technology that minimises risk. We are operating in a sub one million transactions marketplace that, since the recession, has shrunk more rapidly than Colonel Gaddafi’s air force. With business so slow there is a greater incentive for people to play foul, so there is a greater need for quality third party suppliers to help minimise risk.
For technology providers, and all third parties, the name of the game is giving lenders confidence – confidence in the quality of the panel by improving the efficiency of the valuations process and the quality of the management information they receive.
The Fraud Advisory Panel found that the majority of fraud still is stumbled upon by accident or by whistle blowing, rather than through a rigorous, standardised process. So what lenders need is agile and robust technology that can standardise the valuation process and provide a cure to ease the headaches caused by their valuation panel. This ‘nurofen moment’ for lenders can come from better quality management information.
Mark Blackwell is managing director of xit2
