Don’t risk your reputation by failing to put proper fraud processes in place, says Paul Size, Mortgage Controls Manager, Halifax Intermediaries. Fraud costs the UK hundreds of millions of pounds each year and impacts customers and businesses alike. Fraudsters are becoming more savvy when it comes to committing fraud on mortgage applications, so it’s important as an intermediary that you take extra steps to satisfy yourself that your customer’s circumstances are genuine. Where lenders identify fraud on applications that have been submitted to them it may ultimately lead to an assessment of your panel status. In other words, failing to prevent fraud can have a big impact on your reputation and your career. Spotlight on fraud In recent years lenders have invested in technology and fraud controls to strengthen their Intermediary, conveyancer and valuer panels, and to identify and disrupt attempted application fraud, from both borrowers and very occasionally intermediaries. As well technology helping to identify application fraud, our processing and underwriter teams are alert to potential fraudulent applications. Additionally, the Group undertakes proactive monitoring activity across our Intermediary and Conveyancer panels to assess accuracy of key disclosures made and to identify signs of application fraud. Thankfully, most of the application disclosures made intermediary are accurate. This helps the lender assess mortgage affordability and will help to deliver a sustainable lending decision for your clients. If Broker monitoring highlights risks, we move quickly to support the panel member improve standards for future submissions. This may involve a guidance letter or support from a local business development manager. For more serious concerns, formal warnings may be issued accompanied by an action plan which will be agreed with the panel member to deliver required improvement. In a small number of cases, it may be necessary to exclude a broker for our panel. This decision is not taken lightly and will only be reached if the level of risk is too high resulting in increased risk to the bank and our customers. Where do we find instances of application fraud? Common types of fraud We’ve analysed the type of application fraud that we tend to see, and the vast majority involves some form of income and employment manipulation, where an applicant has tried to inflate their income to access a bigger mortgage. As we have previously explained, you must be vigilant on fraud especially at this time when affordability is under increased pressure from the cost-of-living crisis. Protect your business by fighting fraud 12 WINTER MORTGAGE NEWSLETTER Paul Size Mortgage Controls Manager Halifax
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