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Brokers “must heed lenders’ fraud clampdown”

  • 21/10/2011
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Brokers “must heed lenders’ fraud clampdown”
Mortgage brokers must choose their legal partners with care in order to help satisfy lenders’ growing appetite for due diligence across the industry, Goldsmith Williams has said.

It said that banks are increasingly asking buyers for details of their solicitors before making a mortgage offer, indicating a greater desire among lenders to clamp down on mortgage fraud by using only trusted panel solicitors.

Goldsmith Williams said the issue has become so prevalent that many larger solicitors are now being called upon to act on behalf of a lender alongside smaller practices, often costing the client significantly more money.

Eddie Goldsmith, senior partner at Goldsmith Williams, said this latest move by lenders is evidence of the need for greater due diligence across the mortgage sector and brokers need to follow suit by demonstrating a duty of care when referring clients.

He said: “The entire industry is being continuously squeezed by lenders’ efforts to minimise fraud in transactions and brokers are not immune to this condition.

“Increasingly, we are seeing the integrity of smaller law firms being called into question indirectly by the demands of the banks and this is causing ripples across the sector.

“Combating mortgage fraud clearly reflects the industry zeitgeist and brokers must heed the warning signals by choosing a legal partner who will serve their client, not only fairly and equitably, but also without undue delay or disruption from the lender.”

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