Mortgage fraud prevention 'needs a new approach'

Thursday, 22, Jul 2010 09:00

The mortgage industry as a whole needs to rethink its approach to mortgage fraud, according to an expert.

With the economic situation causing still causing financial troubles for many, the likelihood of fraud being committed is certain to be heightened, claims Your Mortgage editor Paula John.

With this problem likely therefore to get worse as economic struggles continue, Ms John believes regulators such as the Financial Services Authority (FSA) need a new approach to tackle the problem.

"The disappointment is that mortgage fraud is still so prevalent in an industry which has undergone increasing regulation over the past six years," she said.

Ms John doubts whether the FSA is actually targeting the right people, as there has been a proportional increase in mortgage fraud over the last 12 months.

The regulator did recently announce proposals to ensure that mortgages are only sold to those who can afford them, forcing lenders to employ more stringent checks before making a loan.