In the Spring edition of its e-newsletter, Mortgage Matters, the trade body says the major budget cuts announced in 2010 will hit police capacity and capability to investigate fraud.
It says a chief constable with a budget under pressure might consider that compared to combating street crime, violent crime or anti social behaviour, investing in combating fraud offers a low return.
The BSA says a key theme for the anti-fraud community in 2011 will be how to fund specialist police mortgage fraud investigators and work better together to make the most of the capability that it does already have.
The trade body says Professional Indemnity insurers will also have strong concerns about the potential scale of claims from lenders given the reduction of resources for criminal prosecution.
Many small professional firms – solicitors in particular – are struggling to find affordable PI insurance, without which they cannot be in practice.
In its newsletter, the BSA says: “Mortgage lenders have become the pantomime villain for many small solicitors as they have rationalised panels following a spate of major mergers but the reasons for high PI premiums are very complex.
“The professional indemnity situation for small firms of solicitors and other professionals will be a huge hurdle in 2011 and is not something for the mortgage industry to interfere in.
“But lenders will want to make sure that they still have operational flexibility in running their professional panels and that a civil route to recover damages is still available.”