We must beware the enemy within

Mortgage fraud has come to the fore in the national press in the past couple of weeks, with a report by KPMG stating that £36m worth of fraud cases were brought before the courts in 2008 - up nearly 10-fold on 2007.

Of course, it is no surprise that in times of increasing unemployment the incentive to commit fraud rises.

Mortgage professionals, whether they be brokers, IFAs, banks or building societies, need to have processes in place to protect themselves from becoming either unwitting accomplices or victims.

But in my recent experience, that £36m figure is massively under-cooked and in the next couple of years it will undoubtedly be substantially higher.

Mortgage fraud hurts the whole industry. Providers with mortgages on their balance sheets or those that are considering purchasing assets are especially vulnerable, and it is important they root out fraud and put prevention at the top of their priority lists.

When most consumers think of mortgage fraud they think of borrowers lying about income or hiding adverse credit information, but there is also such a thing as professional fraud.

This is perpetrated by gangs that collude with professionals in the mortgage industry including solicitors, valuers, developers and brokers.

The Financial Services Authority has strengthened its position on these professionals but there is still a lot of work to be done if the industry is to be protected against further attacks.