Failing to act on fraud suspicions could lead to crisis
It could be argued that brokers have never had it so good. Full diaries, frankly ridiculous mortgage products, proc fees for product transfers, criteria relaxing with each passing day… But an instance a couple of weeks ago was a stark reminder of just how quickly the wheels could come off.
One of our advisers met a new client: a first-time buyer with a chunky deposit coming from his parents. He was two months into a new job, with payslips and all other documents provided in good order, and net incomes all tallying with bank statements. But as is our process, we had also requested a copy of the employment contract. An offer-of-employment letter was duly provided, which stated the job was actually a six-month fixed-term contract. It appeared to be game over. Low and behold, two days later he was back in touch with another letter from the same HR manager, stating his role had been made permanent, having explained the situation to his employer, who had been sympathetic to his home-buying plight.
Except the formatting was different. The font was different. And there was a typo on the footer of the ‘headed paper’. It did not take DS Steve Arnott to work out this needed further investigation, and a call to said HR manager was made. Of course, the document was a knock-up. The correct process was followed and I am guessing the lad ended up in a world of trouble with the employer.
Following a sleepless night, I emailed the HR manager, pleading for leniency. A daft act in a moment of desperation meant he had possibly lost his job. No reply.
However, if it is the client or me that will end up under the bus, it will always be the client. Looking at the file, the criteria and amount required, there is every chance the mortgage would have ended up with one of the big boys. If we had not picked up on this and the lender had, it is no exaggeration to say the ramifications for our firm would have been catastrophic.
Stay vigilant, check all documents, then check them again. And if it does not feel right, do not do it.
Robin Purdie is a director at Borders Mortgage Hub