Brokers must be on guard against fraud

Another week, another depressing headline about the economy. Things have become so tough that some people are being dishonest about their financial affairs when applying for a mortgage, according to reports.

payne.jpg

Fraudulent mortgage applications increased by 8% in 2011, says Experian. A number of applicants fabricated information about the jobs they held and attempted to hide their bad credit ratings to secure a mortgage.

Home owners are often warned of the pitfalls associated with buying a home, but it is rarely reported that advisers need to be careful too. If a client is struggling to make ends meet it is a tricky for advisers to handle it sensitively.

But it is vital brokers heed these findings and appreciate the impact that missing a dishonest application could have on them, the client and the industry.

Although the decision to embellish the facts is the client’s, brokers must do their best to ensure they get the truth.

More and more lenders are hiking their mortgage rates and the regulator is soon to announce stricter guidelines to ensure responsible lending as part of the Mortgage Market Review.

It is a sad fact that many people may now find it harder to secure a deal because of the behaviour of others, but it is only right that steps are taken to restore faith in the housing market.

At a time like this the judgment and discretion of advisers becomes even more important.