The total cost of complying with the Financial Services Authority’s mortgage fraud guidance could hit almost £400,000 a year for mortgage companies.
In its consultation paper on Financial Crime released today the regulator published a cost-benefit analysis of the ongoing incremental costs of its guidance for mortgage fraud.
It estimates that mortgage firms could pay up to £380,720 every year to comply.
The regulator breaks down the cost into six sections and gives a range of the estimated costs.
The cost of assessing when deterioration in staff members’ finances could make them susceptible to fraud could range from £150 to £132,000 per affected firm.
Engaging in cross-industry fraud initiatives will cost between £6,500 and £10,000 and reducing the size of lenders’ third party panels will see firms paying from £750 to £11,220 every year.
Having systems that can check in a broker is ‘gaming a lenders’ system’ will cost firms £300 to £10,000, having underwriting processes that can identify higher fraud risks is estimated to cost between £300 and £212,500 and improving management information and effectiveness will cost between £450 and £5,000.