The lender, which wished to remain anonymous, said it had seen a spike in self-cert cases being pulled up on its anti-fraud system because the broker, having seen the application fall through with one lender, was ramping up the client’s income to secure a deal.
The source explained: “We have noticed a spike in recent weeks of cases being pulled up by Hunter, the anti-fraud system. The cases are being touted around as they are falling through with other lenders but there is a significant amount coming through where the income has been increased from the previous application.”
While a number of lenders admitted they hadn’t seen a similar situation on their lending, they admitted this was a worrying aspect of the credit crunch which needed to be monitored.
Mark Sismey-Durrant, chief executive of Heritable Bank, commented: “This is a major worry as inevitably, as the capacity of the market shrinks, the temptation will be there to manipulate the data. From a lender’s perspective, it is even more important to do the background checks so it all stacks up.”
Bob Sturges, director of communications at Money Partners, added: “We have not seen any trend on self-cert lending but this is not the time for anyone to relax their attitudes towards self-cert.”
Robin Gordon-Walker, spokesperson for the Financial Services Authority, commented: “If lenders suspect fraud or overstated incomes, we have a dedicated line to report these cases to us and we have had over 200 referrals from lenders this year, of which 30-35 went on to further investigation. You’ve got to remember that it’s up to the lender to make a decision on lending, regardless of the market conditions. Our message is if you suspect fraud, tell us.”
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