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Lenders ditch plans for a mortgage fraud squad

Lenders have scrapped plans to launch a specialised mortgage fraud unit within the City of London Police.

Last year the Council of Mortgage Lenders held talks with its members, the National Fraud Authority and the City of London Police about funding a unit with the aim of targeting mortgage fraudsters.

This move was prompted by the revelations that one police force was no longer investigating mortgage fraud because of cuts to funding.

In October 2010 a Comprehensive Spending Review pledge was to cut 20% of police spending by 2015.

The Association of British Insurers backed a similar scheme, launching the Insurance Fraud Enforcement department in January this year.

But lenders opted not to create a mortgage unit, deciding their resources would be better targeted at their own systems.

A spokesman for the CML says the broad conclusion of discussions was that lenders would prefer to prevent fraud than pursue prosecutions.

He says: “It was decided it is better to use resources to stop lenders being victims rather than channel them to the police to prosecute criminals.

Obviously lenders would favour prosecutions but that focusses on fraud that has taken place rather than prevention. It is unlikely we will be taking the proposals any further.”

John Malone, executive chairman of PMS, says: “CML members have different priorities so trying to build a consensus was never going to be straightforward.

“The requirements of, say, a medium-sized building society and a huge lender are different.”

Bill Warren, managing director of Bill Warren Compliance, believes the decision makes sense for lenders in light of regulatory pressure to im-prove their systems.

He says: “There is more regulatory emphasis on lenders protecting themselves than ever before.

“I would go down the same route as they have more control over protecting themselves rather than just dishing money out to the police.”

Brian Pitt, director of Rockstead, also agrees with lenders’ position as they are better placed to tackle mortgage fraud than the police.

He says: “Prevention is always better than cure so it makes sense. There have never been too many fraud cases that make it to court with the police pursuing them vigorously.

“The big commercial cases may have secured prosecutions but for day-to-day fraud, lenders are better dealing with it themselves.”

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  • Anon 9th May 2012 at 5:50 pm

    I know of a colleague who was dooing a shedd load of mortgages for police officers around 7-8 yrs ago – all self cert and many were buying their ex-council house on right to buy.

  • Anon 9th May 2012 at 5:50 pm

    I know of a colleague who was dooing a shedd load of mortgages for police officers around 7-8 yrs ago – all self cert and many were buying their ex-council house on right to buy.

  • mozmil 8th May 2012 at 11:23 am

    Lenders know it would affect them the most, and may end up having to close some branches as they sack many of their own staff for involvement in mortgage fraud.

  • Dave 8th May 2012 at 10:31 am

    What a wasted opportunity!

    Yes they should prevent fraud – but this is penny-pinching, pure and simple – and wouldn’t cost a great deal in the grand scheme of things.

    Meantine, the baddies continue to get away with it.

    The number of prosecutions since M-Day has been pitifully small.

  • Tom Cleary 8th May 2012 at 10:25 am

    Anon – What is your source please? Where did you pull these figures from? Or are they possibly just plucked from the sky? Lies, lies and damn statistics…

  • H DALRYMPLE 8th May 2012 at 9:44 am

    BEST INDUSTRY ESTIMATES, INDICATE THAT UP TO 8000 POLICE OFFICERS MAY HAVE SELF CERTIFIED THEIR INCOME TO OBTAIN MORTGAGES.THE NUMBER OF EX-OFFICERS IS PROBABLY 10,000+. WHY WOULD ANY PERSON WHO COULD PROVE INCOME CHOOSE TO SELF DECLARE AND PAY A HIGHER RATE OF INTEREST ? FALSE DECLARATION IS A CRIMINAL OFFENCE AND SACKABLE !