PMS executive chairman John Malone says the mortgage market’s efforts to stamp out fraud have successfully lowered the loss to the industry to a tenth of what is was four years ago.
Speaking at the Mortgage Business Expo in London last week, Malone said the estimated annual loss to the industry caused by fraud is currently around £500m, compared to around £5bn in 2008.
Malone said he is sceptical of the results of an Experian survey which indicate the number of fraudulent mortgage applications submitted to lendersincreased 22 per cent between April and June.
He said: “All the lenders I deal with say this is not how they see it, they actually see fraud being reduced.”
However, he admitted the mortgage market will never eradicate fraud entirely.
He said: “The intermediary sector has not only taken on the message that we have been delivering over the past 24 months but I would like to think we have made some pretty decent strides. I would not say we are winning the battle but I will say our own bit of the market has improved considerably.
“Up until two to three months ago, we were estimating fraud in the mortgage market was about £1bn. It has now dropped to £500m.
“You will never beat the fraudster. He is cleverer than all the systems which can be provided. What you can do is to slow it down and understand how it is coming to pass.”
Malone said the key areas of concern for fraud are property clubs, distressed property sales, introducers and the buy-to-let and bridging sectors.