Application fraud may involve fake payslips, rotating money across bank accounts to create illusion additional income streams or inventing a secondary job to boost income levels. Sometimes, the income and employment manipulations will take place a few months before the mortgage application is made. Pay close attention to recent changes. We also see increased application fraud risk take place when an intermediary uses the services of a third party, such as a new introducer or a lead generation business, so be particularly alert to this when accepting referred business and do not accept disclosures on face value. Conduct due diligence and be comfortable with your submission. What can intermediaries do? Due diligence at the early stages of the client mortgage journey will protect your client from overstretching affordability, protect your business and protect the lender. We know you’re busy, but these additional checks don’t need to be too timeconsuming. Once you embed anti-fraud measures into your processes, they will some become second nature. Investing additional focus at this key stage will ensure genuine applications are processed without delay by your chosen lender. You will be more confident about your application submission quality and better placed to answer any additional questions which the lender may have. Here’s where to start: 1. Put anti-fraud checks and processes in place throughout your business and ensure they are understood by all members of staff your processing team. 2. Make sure your data management is robust and secure, so that no one can get access who shouldn’t have it. 3. Conduct due diligence when recruiting staff – administrators are the backbone of many broker businesses and key to help support safe lender submissions. 4. Always sense check the income and employment information your clients give to you, as well as cross checking the information to help verify the facts. Ask yourself if the information and the and the client scenario is plausible? 5. Consider running additional background checks on clients, this can be as simple as a quick social media check or conducting a search on Companies House if self-employed. You can learn a lot about a person by their on-line presence. 6. Consider the use on-line ID&V technology to help identify your clients. 7. Ask your clients to provide a credit search covering all addresses resided at over last few years. This will help assess outgoings – loans and credit agreements when assessing affordability. 8. Where you have joint buyers, you may wish to speak to them separately to see if they have any additional information, they want to disclose but might have kept from their partner (such as previous credit problems). 9. With introduced business, know exactly where your leads are coming from and review application referral quality on a regular basis. 10. Look to your compliance manager or Paradigm for additional fraud prevention support – they will have resources and potentially technology to help you. 11. Lenders can help too. For example, Halifax produces a pack of useful material for brokers that you can get from your business development manager (BDM). Application Fraud remains prevalent, don’t be complacent. You will come across clients that forget key information, bend the truth, or attempt to commit application fraud. Application fraud shouldn’t be thought of as a little white lie – there can be potentially serious consequences for both customers and intermediaries. Make sure you embed fraud prevention processes into your daily routines now to protect your business as well as your clients. 13 WINTER MORTGAGE NEWSLETTER
RkJQdWJsaXNoZXIy NzAxMDUz