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Network Traces ‘Source’ Of False Mortgage Applications

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Remarkable that this shit is still going on.

http://www.ftadviser.com/FinancialAdviser/Mortgages/News/article/20101007/86b515e8-cc72-11df-8c2a-00144f2af8e8/Network-traces-source-of-false-mortgage-applications.jsp

Network traces ‘source’ of false mortgage applications

The FSA’s increasing restrictions on lenders are encouraging intermediaries to manipulate mortgage application forms, a leading advisory network has warned.

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Chris Tanner, managing director of West Sussex-based network Homeloan Partnership, said that the effect of lenders having to rein in their product criteria, coupled with the requirements of the City regulator’s mortgage market review, has led to a “dangerous problem” for intermediaries and clients who are unable to get mortgage finance.

Mr Tanner said that lenders were finding an increase in fraudulent applications from both borrowers directly and through intermediaries.

He said: “Potential borrowers are trying to find ways to qualify for a mortgage at a time when lenders have pulled back from all self-certification, high loan-to-value and income multiple mortgages, adverse credit and those for the self-employed who do not have adequate accounts.

“Sadly, this has put advisers in the firing line. Lenders believing any broker to be instrumental in an attempt at manipulation or fraud, whether complicit or just naïve, will simply ban the broker from their panel and make a report to the FSA.

“For brokers working for a practice, the ban can include the principal firm as well. If the broker is a member of a network, the results are just as severe because as most networks cannot establish the details behind the panel removal, they have to conduct a ‘random’ investigation and it is likely the broker will be terminated and not work again.”

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Tough time for brokers, but they really have to up their standards and ban the cowboys. A consequence of that will be higher fees because they set up a closed shop.

Shampers all round!

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...bit tame ....what about the prosecution for fraud....?..... :rolleyes:

+1

Mr Tanner said that lenders were finding an increase in fraudulent applications from both borrowers directly and through intermediaries.

Which means they have been aware of at least some of this all along. This isn't sloppy practice, where the regulator should get involved. It's fraud, where the police should get involved.

Is there any way these organisations can be compelled to report suspected fraud to the authorities? Don't they have a legal duty to do this, and can't action be taken against them if they are ignoring the problem? As you may have guessed, IANAL.

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... This isn't sloppy practice, where the regulator should get involved. It's fraud, where the police should get involved.

....

The Police don't care and haven't got either the resources or the specialist staff to prosecute. When they do get the odd big fish like Earnest Saunders the rich people's club that run the country make sure their friends are looked after. Just the odd working class barrow boy like Kerviel now and then to pretend something is being done. Corruption and dishonesty are now endemic in western capitalism.

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Provided the legal profession retains its independence and integrity, then some action should be possible.

I know very little about mortgage securitisation in the UK, but I believe most mortgages during the boom years were packaged up and sold to investors. I'd guess these investments are currently performing OK, but at some point (say if the crash resumed), they could start to lose money. Now if the lenders had known that some of those mortgages were fraudulent, but sold the RMBS anyway, then presumably there's scope for investors to sue the lenders. I'm guessing the UK is behind the US in the evolution of the crisis, but something along the lines of 'foreclosuregate' could hit the UK.

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  • 144 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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