With lenders under pressure on capital and credit conditions painfully restricted, the amount they lend will fall yet further over the coming months.
The pinch will be felt throughout the mortgage industry. It will hurt profitability and put the whole market under increased strain, and that will tempt more people to commit fraud.
Significant progress has been made on fraud in the last few years, but as the FSA thematic review in June pointed out, weakness in anti-fraud technology still abounds.
The Fighting Fraud Together strategy launched by the National Fraud Authority last month was a welcome step.
Schemes like this will go a long way to addressing the lack of industry collaboration on tackling fraud. The scheme proposes a more comprehensive commitment to sharing information between the mortgage industry and the public sector. It was a strong signal of intent.
However, the proposals it outlined can only go so far.
More information sharing is all well and good, but the mortgage industry and anti-fraud teams need better information in the first place about third parties suppliers and borrowers, so they can spot fraudulent trends more easily.
Often a firm uses a variety of systems, which makes pulling together data easily a Herculean task. To circumvent the problem, individual departments often develop ad hoc measures of their own, which sit outside the main IT system. This muddies the water further and allows more fraud to slip through the net.
The only way the mortgage market can keep pace with increasingly sophisticated fraudsters is by using flexible web-based systems that allow information to be stored in a single place and single format.
This allows suppliers and borrowers to be monitored more closely, increasing the likelihood that fraudsters are spotted.
Better data and data sharing needs to become the eyes and ears of the mortgage industry in the fight against fraud.
Mark Blackwell is managing director of xit2
