The latest Mortgage Solutions poll revealed that 35% of respondents have seen evidence of such activity, with a further 21% hearing rumours of the practice.
This follows the FSA’s head of conduct policy, Sheila Nicoll, warning last week that the regulator would not tolerate “imaginative” misuses of buy to let and bridging to obtain loans for customers unable to access finance.
Nevertheless, 44% of brokers said they have not seen anything to suggest such potentially fraudulent business is taking place.
Kevin Thomson, director of Brilliant Group, said that, on the bridging side, much of his time is taken up proving exit loan strategies for clients to regulated lenders.
“Could it be done? Yes – there’s always a loophole. But if I were the FSA, the incidence is so small, I wouldn’t put this at the top of my agenda,” he said.
“This is a bit like decreeing there must not be any more mortgage application fraud. Everyone has tightened up their systems, but there is always a risk,” he added.
