Mortgage salary fraud initiative set to launch
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Mortgage lenders will be able to verify the income claimed in a suspected fraudulent mortgage application by the end of the year, HM Revenue &Customs has confirmed.
HMRC says it is on track to launch the scheme this year, allowing lenders to check a person’s alleged salary against their income tax and employment returns.
The scheme was announced in the March 2010 Budget and will be limited to cases where lenders reasonably suspect fraud following their checks.
An HMRC spokeswoman says: “Financial institutions have confirmed decisions about mortgage lending are their responsibility alone. They will use a variety of sources in assessing mortgage decisions and will not rely solely on responses provided by HMRC.”
HMRC has set up a specialised unit to deal with the requests and will charge financial institutions a small fee to cover its costs of providing the scheme.
HMRC is in advanced discussions with the Council of Mortgage Lenders and other representative groups about operational details of the scheme and governance.
John Simmons, consultant at Vertex, says it is seeing lenders bulk up their systems to defend against fraud.
He says: “Lenders’ systems are flexible and can allow them to not only look at the applicant’s credit data, but also cross-reference this against any other accounts, debt and properties they may have.
“Fraud is being discovered by lenders that has been embedded for years, but lenders have the tools to detect fraudulent cases, they just need to use them.”
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