SaintJay Posted July 19, 2008 Share Posted July 19, 2008 City regulator in mortgage fraud crackdown By Jennifer Hughes Published: July 18 2008 22:30 | Last updated: July 18 2008 22:36 Growing evidence of mortgage fraud is forcing the City watchdog into a crackdown on brokers that could see them facing tougher regulatory scrutiny. The mooted changes come as the discovery of mortgage fraud is expected to rise as falling house prices, higher interest payments and tighter lending exposes troubled loans, including those where key information such as salary was falsified. EDITOR’S CHOICE FSA steps up up mortgage fraud battle - Jul-18 Mortgage review will bring no joy - Jul-14 Brokers turn to the hard sell to survive - Jul-12 Lenders launch cheaper deals - Jul-12 Mortgage market strains continue to grow - Jul-10 Economist forecasts softer landing - Jun-25 The Financial Services Authority is considering moves that could add 7,000 mortgage brokers to its list of roles requiring official “approved person” status. Although the companies are regulated, brokers and other intermediaries do not need to be individually approved. The FSA is considering whether to bring the industry under the same official checks as other investment advisers who work with more complex long-term investment products such as pensions. Next week the FSA will publish a report detailing its work on mortgage fraud and will also call on more lenders to help by blowing the whistle on suspicious applications. The regulator has already toughened its efforts to clamp down on mortgage fraud. Seventeen brokers have been banned this year compared with just six last year and two the year before. The regulator also has another 24 cases going through its enforcement process. Brokers have admitted the economic slowdown could increase the appeal of fraud if once-profitable companies struggle in the tougher environment. The FSA has begun levying fines on individual brokers in an attempt to boost its deterrent effect and recoup profits from the fraud. BEEFED-UP TEAM HELPS SAVE TIME A more streamlined process has been largely responsible for the speedy rate at which the Financial Services Authority is concluding mortgage fraud cases, writes Jennifer Hughes. Now each is taking between three to six months from tip-off to final notice, which the regulator says is “much less” than before. The time savings have come from developing a dedicated, beefed-up team and trimming the work involved. Cuts involve interviewing fewer people after the necessary evidence has been gathered. “We’re no less careful, but we rationalised, we didn’t need to do as much of that work to get the case together,” said Margaret Cole, a former litigator who joined the regulator in 2005 as head of enforcement. Once a tip-off comes in, the FSA’s investigators begin public record checks, starting with Revenue & Customs to establish whether the application data correlate with tax returns. Other public records include the Land Registry. When the evidence is gathered, the broker is interviewed. Ms Cole said it was “about 50/50” between those who admit, and those who deny. Those who confess face a quick “executive” procedure. Those who do not go on to appear before the FSA’s regulatory decisions committee to argue their case. Copyright The Financial Times Limited 2008 Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 19, 2008 Share Posted July 19, 2008 (edited) "Brokers have admitted the economic slowdown could increase the appeal of fraud if once-profitable companies struggle in the tougher environment. The FSA has begun levying fines on individual brokers in an attempt to boost its deterrent effect and recoup profits from the fraud." ------------------------------------------------ WTF?!?! These people should GO TO PRISON!!!!!!!!!!!! A FINE?!?!? THEY HAVE COMMITTED A HUGE FRAUD!!!? ------------------------------------------------------------------------------------------------------------------------------------- All this is PATHETIC!!!!!!!!! Look at the video from way back in 2003/4 - FIVE YEARS AGO -- LIAR LOANS HAVE BECOME THE NORM SINCE THEN!!!- http://video.google.co.uk/videoplay?docid=...75&hl=en-GB - NINE OUT OF TEN MORTGAGE BROKERS URGING CUSTOMERS TO LIE ABOUT THEIR INCOME!!!! THAT IS 90%!!!!!!!!!! -------------------------------------------------------------------------------------------------------------------------------------- Look at this video from 2 months ago!!! - http://video.news.sky.com/skynews/video/?&...270508_0900.flv - IT IS STILL GOING ON TODAY!!!! Edited July 19, 2008 by eric pebble Quote Link to comment Share on other sites More sharing options...
Prof Posted July 19, 2008 Share Posted July 19, 2008 (edited) The video of the Money Program that Eric points out was shown about 5 years ago. No doubt the fraud that was shown in the program got worse, as house prices continued to rise. More people would have had to take on "liar loans" to "get on the ladder". Now the housing market is crashing, the authorities decide to take action against mortgage fraud. Talk about shutting the gate after the horse is in a can of Pedigree Chum. How many cases of mortgage fraud will there be, now that the housing market is on it`s knees ? Who in their right mind would lie to get a mortgage today ? The FSA realised after the NR "incident" that they might have needed to take action earlier. Now they decide they need to clamp down on mortgage fraud, after most of the fraud has taken place AND INFLATED THE BUBBLE TO A POINT WHERE IT`S BURSTING. There seems to be no forward thinking by the FSA, they just react after the event. Why do they exist ? Edited July 19, 2008 by Prof Quote Link to comment Share on other sites More sharing options...
CviewUK Posted July 19, 2008 Share Posted July 19, 2008 Some interesting links can be found on this page: FSA/PN/070/200815 July 2008 The Financial Services Authority (FSA) has fined a Kilmarnock mortgage firm £11,900 for failing to adequately supervise an adviser, resulting in applications containing false and misleading information being submitted to lenders. http://www.fsa.gov.uk/pages/Library/Commun.../2008/070.shtml Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 19, 2008 Share Posted July 19, 2008 (edited) The video of the Money Program that Eric points out was shown about 5 years ago. No doubt the fraud that was shown in the program got worse, as house prices continued to rise. More people would have had to take on "liar loans" to "get on the ladder". Now the housing market is crashing, the authorities decide to take action against mortgage fraud. Talk about shutting the gate after the horse is in a can of Pedigree Chum. How many cases of mortgage fraud will there be, now that the housing market is on it`s knees ? Who in their right mind would lie to get a mortgage today ? The FSA realised after the NR "incident" that they might have needed to take action earlier. Now they decide they need to clamp down on mortgage fraud, after most of the fraud has taken place AND INFLATED THE BUBBLE TO A POINT WHERE IT`S BURSTING.There seems to be no forward thinking by the FSA, they just react after the event. Why do they exist ? You're so right Prof...... so right........ Edited July 19, 2008 by eric pebble Quote Link to comment Share on other sites More sharing options...
Prof Posted July 19, 2008 Share Posted July 19, 2008 You're so right Prof...... so right........ Yes, it makes my blood boil just thinking about it. 1. It is fraud. 2. Honest buyers suffer, as they were "competing" against liars. Quote Link to comment Share on other sites More sharing options...
VacantPossession Posted July 19, 2008 Share Posted July 19, 2008 (edited) There seems to be no forward thinking by the FSA, they just react after the event. Why do they exist ? But it's much more than a lack of forward thinking which implies merely incompetence. The F.S.A has a long history of not only getting too cosy with those its remit is to regulate, it spent over a decade giving the nod to short term greed which was clearly grossly illegal...and it did precisely nothing to stop it. This is not just dereliction of duty, or negligence. IT IS WORKING IN CONCERT. The F.S.A itself has been criminally culpable in encouraging Liar Loans and a whole raft of illegal activity by banks, brokers, lenders and almost the entire property industry from the moment it came into existence. VP Edited July 19, 2008 by VacantPossession Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted July 19, 2008 Share Posted July 19, 2008 But it's much more than a lack of forward thinking which implies merely incompetence. The F.S.A has a long history of not only getting too cosy with those its remit is to regulate, it spent over a decade giving the nod to short term greed which was clearly grossly illegal...and it did precisely nothing to stop it. This is not just dereliction of duty, or negligence. IT IS WORKING IN CONCERT. The F.S.A itself has been criminally culpable in encouraging Liar Loans and a whole raft of illegal activity by banks, brokers, lenders and almost the entire property industry from the moment it came into existence.VP But that is the entire modus operandus of the british state. And don't tell me that it is just a labour thing. It has been the entire modus operandus of the British state to beget power and ignore the rules since time. It is a symptom of the god king concept which has been transfered to the body of the party in power with the move to what we laughingly call democracy Quote Link to comment Share on other sites More sharing options...
huw Posted July 19, 2008 Share Posted July 19, 2008 Thank goodness they're nipping this in the bud. Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted July 19, 2008 Share Posted July 19, 2008 Yes, it makes my blood boil just thinking about it.1. It is fraud. 2. Honest buyers suffer, as they were "competing" against liars. What makes me so cranky is that I didn't get a liar loan and flip it! Its only now that it all comes out that I realise that being honest is such a looser and I should just get in the shitpit - you don't thrive by having principles. Quote Link to comment Share on other sites More sharing options...
Prof Posted July 19, 2008 Share Posted July 19, 2008 What makes me so cranky is that I didn't get a liar loan and flip it!Its only now that it all comes out that I realise that being honest is such a looser and I should just get in the shitpit - you don't thrive by having principles. Me too, that`s why I`ll never "get on" in life. :angry: Quote Link to comment Share on other sites More sharing options...
nixy Posted July 19, 2008 Share Posted July 19, 2008 There seems to be no forward thinking by the FSA, they just react after the event. Why do they exist ? Why does it exist? To create an illusion that there was regulation. The Money Program was little more than an advertising feature, almost to the extent of saying (implying) those who failed to lie would be left behind. That there were no real deterrent prosecutions is confirmation. Quote Link to comment Share on other sites More sharing options...
Not Long Now Posted July 19, 2008 Share Posted July 19, 2008 Thank goodness they're nipping this in the bud. ....you're right. Things could have really got out of hand! Quote Link to comment Share on other sites More sharing options...
nixy Posted July 19, 2008 Share Posted July 19, 2008 (edited) duplicate reply Edited July 19, 2008 by nixy Quote Link to comment Share on other sites More sharing options...
Giordano Bruno Posted July 19, 2008 Share Posted July 19, 2008 What makes me so cranky is that I didn't get a liar loan and flip it!Its only now that it all comes out that I realise that being honest is such a looser and I should just get in the shitpit - you don't thrive by having principles. I disagree entirely. I think you are lucky not to have got a liar loan. One reason the rules are in place, the rules which the liars circumvent, is to protect the borrower from taking out a loan which is beyond his means, and which will cause hardship to him, and very possibly repossession.If you got at liar loan you would probably end up being repossessed, the property sold by the bank for a knock-down price, and you would be liable for the difference between the loan and the selling price. And all this when the price bubble is collapsing. I think you are really lucky! I feel sorry for the liars because most of them will be in deep shit as the crash unfolds. Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted July 19, 2008 Share Posted July 19, 2008 I disagree entirely. I think you are lucky not to have got a liar loan. One reason the rules are in place, the rules which the liars circumvent, is to protect the borrower from taking out a loan which is beyond his means, and which will cause hardship to him, and very possibly repossession.If you got at liar loan you would probably end up being repossessed, the property sold by the bank for a knock-down price, and you would be liable for the difference between the loan and the selling price. And all this when the price bubble is collapsing. I think you are really lucky! I feel sorry for the liars because most of them will be in deep shit as the crash unfolds. You are right in principle but if I had bought anywhere in the past 2 years and sold anywhere up to about 6 months ago I would have been fine. I would only have been caught out if I got greedy. The only people who will be in the poo are those who didn't get out soon enough (which is most) Quote Link to comment Share on other sites More sharing options...
Giordano Bruno Posted July 19, 2008 Share Posted July 19, 2008 You are right in principle but if I had bought anywhere in the past 2 years and sold anywhere up to about 6 months ago I would have been fine. I would only have been caught out if I got greedy. The only people who will be in the poo are those who didn't get out soon enough (which is most)Well, alright if profiting from the bubble is your aim. But, apart from ethical considerations, although most people on hpc knew there was going to be a crash, how many knew before it happened when it was going to occur?Even if you did know when it would happen, one could put the property up for sale and get no offers for quite a while until the crash started, and then it would be probably too late. I know of one property that had been up for sale for a year before the crash with no offers. Quote Link to comment Share on other sites More sharing options...
wonderpup Posted July 19, 2008 Share Posted July 19, 2008 Why does it exist? To create an illusion that there was regulation. I belive the FSA is funded by the financial services industry. Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted July 19, 2008 Share Posted July 19, 2008 Well, alright if profiting from the bubble is your aim. But, apart from ethical considerations, although most people on hpc knew there was going to be a crash, how many knew before it happened when it was going to occur?Even if you did know when it would happen, one could put the property up for sale and get no offers for quite a while until the crash started, and then it would be probably too late. I know of one property that had been up for sale for a year before the crash with no offers. Point taken. This house has been on the market for 18 months. http://www.rightmove.co.uk/viewdetails-153...=1&tr_t=buy It was 179,000 at one stage but they have obviously got realistic Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 19, 2008 Share Posted July 19, 2008 (edited) ....they have obviously got realistic.... Edited July 19, 2008 by eric pebble Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 19, 2008 Share Posted July 19, 2008 Well, alright if profiting from the bubble is your aim. But, apart from ethical considerations, although most people on hpc knew there was going to be a crash, how many knew before it happened when it was going to occur?Even if you did know when it would happen, one could put the property up for sale and get no offers for quite a while until the crash started, and then it would be probably too late. I know of one property that had been up for sale for a year before the crash with no offers. Yup --- I personally think the "property crash" we are now hearing about a bit more [ ] started AGES ago!!! I know of MANY examples of people who have been unable to sell their property for as much as 2 years - and a bit more in a couple of cases.......... This "crash" has crept up on us - beginning in earnest 20 months ago approx, imo...... Quote Link to comment Share on other sites More sharing options...
Not Long Now Posted July 20, 2008 Share Posted July 20, 2008 Yup --- I personally think the "property crash" we are now hearing about a bit more [ ] started AGES ago!!! I know of MANY examples of people who have been unable to sell their property for as much as 2 years - and a bit more in a couple of cases.......... This "crash" has crept up on us - beginning in earnest 20 months ago approx, imo...... Eric - it all started in 2005. No average property has gained value in the last 2.5 / 3 years. Don't believe the hype. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 20, 2008 Share Posted July 20, 2008 Eric - it all started in 2005.No average property has gained value in the last 2.5 / 3 years. Don't believe the hype. This is what I think NLTG --- I think you are right!! Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 20, 2008 Share Posted July 20, 2008 Point taken. This house has been on the market for 18 months.http://www.rightmove.co.uk/viewdetails-153...=1&tr_t=buy It was 179,000 at one stage but they have obviously got realistic Like 100,000's of others........ Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 20, 2008 Share Posted July 20, 2008 kapow! Quote Link to comment Share on other sites More sharing options...
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