BDO’s head of fraud and financial crime Simon Bevan made the claim last week saying: “You could eradicate 80% of mortgage fraud if you had two valuations, from two different valuers. They would have to collude together so you would take your risk profile down massively. The banks won’t do that as they are trying to keep their products as low as possible.”
But Clifford, who also sits on the Board of Sesame Bankhall Valuations, said: “It would be folly to argue with the claim that mortgage fraud could be hindered by a second valuation, but the claim that 80% of fraud could be eradicated by a second valuation sounds like poppycock to me."
Clifford also blasted the claim that a second valuation as a de facto feature would be strongly supported by the industry.
He said: “Every lender, broker and network I've chatted to on this topic holds a similar view that a second valuation is unlikely in the extreme to become a standard feature.
“Most strongly believe that it would create a disproportionate cost bourn directly or indirectly by the consumer, not to mention the delay to application processing.
“The UK mortgage market has worked hard to streamline the mortgage process at virtually all of its touchpoints, so why on earth would lenders or regulators impose more complexity and delay?"
And he argued: “Nothing will eradicate the potential for a corrupt developer, solicitor or other stakeholder - certainly not a second valuation. It's a ridiculous suggestion that lenders would want it or have intent to bring it about."
Over a decade ago the likes of packagers and brokers could choose the valuer which occasionally facilitated fraud - not a feature which is true of the modern day market.
Clifford added: "The fact is that lenders have massively protected against valuer fraud by more tightly supervising their approach to residential valuations.
“Direct Valuations and Sesame Bankhall Valuations act for virtually all the major lenders and that panel management model has proven over two decades to be a surefire way to mitigate the risks."
