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FSA: lenders not enhancing fraud controls for high risk mortgage products

Some lenders are failing to enhance their fraud controls for high risk mortgage products, says Edna Young, strategy specialist for financial crime and intelligence at the Financial Services Authority.

She says the FSA’s Mortgage Fraud Thematic Review found that some lenders either did not apply additional controls to high risk products such as bridging or sub-prime loans, or they simply bolted them on rather than incorporating them into product development.

Speaking at the FSA’s Financial Crime Conference today, Young also says it was noted that lenders which have diversified into now areas such as buy-to-let have stringent and often manual controls for such products.

But she says: “Whether this will be sustainable when lending volumes increase remains to be seen.”
       

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