The front page headline in FA is ‘Fraudsters operating in mortgage market claim’. Large scale fraud is being carried out mainly by self-certifying borrowers, often with the connivance of mortgage intermediaries and independent financial advisers, it is claimed. The attitude of the perpetrators was: ‘As long as I can hold on to the asset and then sell and pay off the lender without any questions asked, then I have achieved my aim.’
Points of interest
MM contains a special report on London Mortgage Business Expo. The Financial Ombudsman Service (FOS) has praised mortgage intermediaries for the continuing low level of complaints. In contrast, endowment sales accounted for 70 per cent of the 113,000 complaints handled by the FOS last year.
In MS, Sally Laker, managing director of Mortgage Intelligence, picks up on the current debate about the size of networks, and says that measuring a network’s quality by looking at the number of its appointed representatives (ARs) is misguided and misleading, and that working in the interests of members is more important. Laker also believes the true measure of a mortgage network’s success will always be the bottom line, because money still talks.
Also in MS, Alan Cleary, managing director of edeus, talks about the Financial Services Authority (FSA) beginning to flex its muscles and fine errant intermediaries. The main cause for concern is lack of documentation to prove the clients’ requirements have been noted and an appropriate mortgage recommended by the brokers.
Cleary points out that technology can provide much of the solution. Mortgage lenders’ IT systems already record and store much of the information required, meaning brokers can sleep a little easier without have to worry about lost paperwork.
MSL looks at automated valuation models (AVMs) and lenders’ reluctance to use Home Condition Reports in conjunction with them. Jeff Knight, director of marketing at GMAC-RFC, says it is okay in theory, but would not work in reality.
Griffiths says:
“I often quote a saying attributed to Hannibal: ‘We will either find a way or make a way.’
It seems to me this would be a sensible strategy for forward thinking lenders who have much to gain from an improved knowledge of the property – without recourse to an expensive physical valuation paid for by the applicant. ‘TCF and all that.”
In MI, Alex Murray, group director of mortgages at the Thinc Group, agreed AVMs have done more for lenders than the customer. Enough said.
Publications mentioned
Financial Adviser FA 23 Nov
Money Marketing MM 23 Nov
Mortgage Introducer MI 25 Nov
Mortgage Solutions MSL 27 Nov
Mortgage Strategy MS 27 Nov
