A Police report on mortgage fraud has called on the Financial Services Authority to individually register and regulate the estimated 40,000 UK mortgage brokers.
The Association of Chief Police Officers has made the recommendation as part of its report into the growing problem of mortgage fraud in the UK.
The Association of Mortgage Intermediaries estimates that there are between 11,500 and 12,500 mortgage brokerages in the UK, but because brokers are not individually registered there is no verified figure of how many of them there are.
Based on the last official figures from the Mortgage Code Compliance Board, Mortgage Strategy estimates that today there could be some 40,000 brokers in the UK.
Richard Farr, director of AMI, says that it would be in favour of individual registration but only if the process was slick.
He says: “Everybody is for individual registration as long as the process is slick and we are talking to the FSA about this.
“IFAs have the approved persons regime which is individual registration but the problem is that there are various administrative burdens currently in that system.”
A spokesman for the FSA says: “At the moment we authorise firms and not individual mortgage brokers. We will revieve the police report and consider their proposal.”
Key findings of the report highlight the fact that criminals are attracted to fraud because of its low risk of detection and prosecution with high monetary return.
Mike Bowron, ACPO lead on economic crime and commissioner of the City of London police, says: “Organised mortgage fraud can take many forms and while difficult to measure accurately, remains a significant element of the UK’s annual fraud losses.”
The report took evidence from 47 UK police forces, 45 mortgage providers (representing over 75% of the market), the Serious and Organised Crime Agency, Serious Fraud Office and Her Majesty’s Revenue and Customs.
It also consulted with the FSA, Council of Mortgage Lenders, British Bankers’ Association, the Association of British Insurers, the Royal Institute of Chartered Surveyors and the Solicitors Regulatory Authority.
The report states that the FSA is already establishing a joint intelligence operation with City of London police and industry to improve knowledge of the scale of the problem and help guide efforts of both regulators and law enforcement.