The total cost of complying with the Financial Services Authority’s mortgage fraud guidance could hit almost £400,000 a year for mortgage firms.
The regulator has published a cost-benefit analysis of how much it would cost firms to implement proposals in its Mortgage Fraud Thematic Review.
It breaks down the estimated cost into six sections. Assessing when a deterioration in employees’ finances could make them susceptible to fraud could cost between £150 and £132,000 per affected firm.
Engaging in cross-industry fraud initiatives will cost between £6,500 and £10,000 and reducing the size of third party panels will see lenders paying between £750 and £11,220 a year.
Other costs include systems that can check brokers are not gaming a lender’s system which could mean firms shelling out £300 to £10,000 while having underwriting processes that can identify higher fraud risks is estimated to cost between £300 and £212,500.
It is also estimated that improving management information will cost between £450 and £5,000