The FSA is warning mortgage brokers to be wary of property hijacking.
In its April smaller firms regulation round-up, published last week, the regulator reports an increase in cases where fraudsters are trying to get mortgages on empty properties they do not own, which it calls property hijacking. The fraud is commonly perpetra-ted by introducers that are previously unknown to brokers.
The FSA says: “There have been attempts by fraudsters to raise mortgages on unencumbered properties.
“This demonstrates the importance of undertaking appropriate due diligence when engaging in new relationships to ensure that you know who you are dealing with and can identify any trends or anomalies in the business being offered.”
London & Country associate director of communications David Hollingworth says: “Brokers have to make sure they do enough due diligence when taking on a new introductory source to make sure they are not being used as part of a scam to commit fraud.”