According to the FSA, the guide is not a checklist of things that all firms should do to keep up defences against financial crime, but a list of steps they can take to reduce their own risk.
Examples of good practice for lenders include ensuring that a firm’s underwriting process can identify applications that may present a higher risk of mortgage fraud.
Lenders should also ensure that membership of its panels of brokers, conveyancers and valuers is subject to ongoing review, review existing mortgage books to identify and assess mortgage fraud indicators, promptly discharge mortgages that have been redeemed and check whether conveyancers register charges with the Land Registry in good time.
Examples of good practice for mortgage intermediaries include asking to see original documentation on whether or not it’s required by lenders and using the FSA’s Information from Brokers scheme to report intermediaries it suspects of involvement in mortgage fraud.
Examples of poor practice from firms include failing to undertake due diligence on introducers, accepting all applicant information at face value and treating due diligence as the lender’s responsibility.
Click here to read the full version of the FSA’s guidebook: Financial crime: a guide for firms
