The scheme, which is backed by the Council of Mortgage Lenders (CML), is aimed at reducing the levels of fraud involved in mortgage applications passed through intermediaries and has already been successfully tested with a number of mortgage lenders.
Lenders are asked to supply details on the intermediary, the customer and the application to the FSA. This enables the regulator, using the new system, to respond quicker and implicate those involved in any wrongdoing.
Stephen Bland, director of small firms at the FSA, said: “It is the first time we have used information of this type in this systematic way, and it is an example of our strategy of working with the market to supervise small firms working effectively in practice. “Mortgage fraud is a serious matter and can lead to criminal proceedings both for intermediaries and mortgage applicants. We are looking to all lenders to help us in the fight against this practice.”
During a pilot scheme ran with a number of mortgage lenders, four intermediaries were referred to the FSA for possible enforcement action after being reported for fraudulent behaviour.
The Association of Mortgage Intermediaries (AMI) has also backed the proposal.
Rob Griffiths, associate director at AMI, said: “AMI supports the regulator’s move to protect the industry’s excellent consumer reputation and we will be monitoring the FSA’s initiative closely. Anything that reduces mortgage fraud is to be welcomed as fraud is detrimental to the entire industry.”
Sally Laker, managing director of Mortgage Intelligence, said: “It is good to see some clarity being brought into the procedure. Up until now, lenders have had their own procedures, so it will be welcomed that there is now a uniform method which everyone can subscribe to.”
