Lenders, do you really know who is recommending your mortgages, conducting valuations, conveyancing and who might be intentionally or unintentionally harming your business and exposing you to increased financial risk?
There are loopholes that can be plugged, with good planning, coordination between industry, national and international bodies and good technology systems that tie all the information together.
There should be systems whereby connections between conveyancers, valuers, brokers can be linked and patterns can be analysed to help detect suspicious or fraudulent activity.
For example, according to the FSA report of 2011 into mortgage fraud, one small lender could not identify whether individual brokers, solicitors or valuers were connected with multiple mortgage applications, making it difficult to identify collusion.
How can lenders best perform due diligence on third parties to reduce instances of crime most effectively in the future? There is a requirement to understand who is dealing with your customer and your assets (your mortgages).
With sudden rises in mortgage volumes comes the dim prospect of the world possibly getting carried away with itself – how much of this increase in volume is positive sentiment and freely available funding, or how much is it that some lenders maybe getting in decent volume before they batten down the hatches to prepare systems and staff before the Mortgage Market Review comes into effect in April next year?
Alongside all this increased activity the need to be more vigilant is paramount – knowing who is working for you or against you is key in this seemingly growing market.
Mark Blackwell is managing director of xit2
