View more on these topics

FSA turns on the bat signal way too late

The Financial Services Authority this week called on brokers to don their capes and masks and become mortgage fraud crime fighters.

In 2006 the watchdog launched IFL, Information From Lenders, which it hoped would wheedle out fraudsters. It didn’t do that well – this week Bradford & Bingley revealed that of it’s £206 million losses, £18 million were thanks to mortgage fraud.

The FSA must have had a think, a really hard think to figure out who else they could turn to combat mortgage fraud. Eureka! two years later the quick-footed regulator asked mortgage intermediaries, who are at the centre of two thirds of all mortgages in the UK, to join them in the fight against mortgage fraud.

Many brokers have been incensed by this. Not because they are fans of mortgage fraud, far from it. It is because the FSA not only asked them two years too late, but they also insulted them – because spotting bad borrowers is part of the brokers’ jobs already.

The intermediary should check the facts and the intermediary should make sure that the borrower can pay the monthly repayments. The FSA even says it. In the statement this week it said: “we are simply asking firms such as yours to ensure you are doing what you are already expected to do”.

So in other words, do your job.

Thanks FSA.

Intermediaries are not stupid, they know fraudsters affect the whole industry. The loses of B&B will be recouped by withdrawing good products. That means for all the products the lender pulls in the next few months, one in ten will be due to fraudsters. That’s less products on the market and less chance for brokers to place their borrowers. So that’s lost business. The FSA seem to forget that lenders and intermediaries are in it together.

And lenders should remember that. Brokers have complained that they are not given enough information by lenders, information which could help both parties identify and finger fraudsters. Lenders tell brokers as little as they can and the lines of communication are anything but clear much of the time.

The borrowers are the brokers’ clients and the broker is always honest and upfront. But the brokers are the lenders’ clients – so lenders should be honest and upfront also.

Holmes didn’t solve much without Watson, Batman always does better with Robin and lenders will be able to catch fraudsters a lot easier with brokers. And vice versa.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com