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MORTGAGE FRAUD TRAINING. NAME – Regional Key Account Manager. Primary Objective of Todays Training.

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mortgage fraud training

MORTGAGE FRAUD TRAINING

NAME – Regional Key Account Manager

primary objective of todays training
Primary Objective of Todays Training

Help you to identify mortgage fraud in the course of your work as a mortgage adviser or administrator and avoid getting involved in it. This will, in turn, help you to avoid removal from a lenders panel or regulatory action by FCA .

mortgage fraud how to avoid it

Please read carefully– It could save your career

Business Owners have responsibilities

You will receive a full hand out from today

Advisers also have responsibilities

Conduct business with due skill care and diligence

Mortgage Fraud & How To Avoid It
legal regulatory responsibilities

Havein place adequate risk management systems

Firm not to be vehicle for financial crime

Organise/control affairs responsibly and effectively

Fraudulent Mtg - Value represents proceeds of crime

Lenders/FCA interview firm owners & “touch points”

Legal & Regulatory Responsibilities
mortgage fraud how to avoid it1

Mortgage fraud for Property - Individuals

Mortgage Fraud for Profit - Gangs/Rings.

2 types of mortgage fraud

We will focus on individual

Handout covers fraud rings

Mortgage Fraud & How To Avoid It
mortgage fraud how to avoid it2

The FCA letter you never want to receive

Honest advisers can get caught out

If things go pear shaped…………

Lenders tend to shoot first and ask questions later

Watford Woe

Mortgage Fraud & How To Avoid It
what s the key driver throughout

KNOW YOUR CLIENT

THINK LIKE AN UNDERWRITER

DUE DILIGENCE

GIVE YOURSELF A MANDATE

Non Face to Face is higher area of risk

What’s The Key Driver Throughout
the most common type of fraud
The Most Common Type of Fraud

Individuals painting a false picture of their personal circumstances on an application form. Most commonly involving scheme manipulation, giving false information about their employment status or attempting to hide a poor credit history.

scheme manipulation

Buy to let applications that are actually residential

Residential applications that are actually buy to let

Scheme Manipulation is very common

Lenders regard this as a serious issue

Can lead to a firm being removed from panel

Scheme Manipulation
scheme manipulation indicators

Is it job change, do they work for a national company? Or is it their real intention to let property?

Couples who separate, reconcile & separate again

Lives/works in one area & moves other part of UK

Client with large number of BTL wants residential

Let to Buy requires additional caution/checks

Scheme Manipulation Indicators
manipulation of income

False payslips

False references

Inflated Income

“Family References”

Misrepresentation to obtain higher loan than entitled to

Manipulation of Income
payslips

Check on Google

Aretelephonenumber & address same as client gave

Does Company Exist

Basic pay exactly £25k – Round figures are unusual !

Low Employee Numbers – Very low usually founders

Payslips
payslips1

If payslip electronic then probably ok

If post, unlikely to be pristine condition

Payslip is 6 months old but looks newly printed

Don’t accept copies, they are much easier to forge

Check font sizes

Payslips
payslips2

Number of websites offering replacement payslips

Bonuses that are the same each quarter

Tear open payslips - look like haven’t ever been sealed

Could be genuine but worth investigation

Can be difficult to spot – Remember key is due diligence

Payslips
bank statements

Are the transactions printed in line, same font

Examine transactions to see if matches application data

Check BACS payments match date/amounts on payslip

Look for things like child benefit payments

Are the transactions in the area they are buying

Bank Statements
credit history

Tell client lenders carry out sophisticated checks

Misrepresentations will often lead to case decline

Insist on full disclosure

Don’t underwrite case yourself – full disclosure !!

Bad outcome affects your lender quality metrics

Credit History
proof of deposit source of funds

If savings, Plausible? - Age, occupation, commitments

Is how customer has accumulated source plausible

FCA/Lenders want firms to establish source of deposit

Have funds been amassed legitamely

Lenders will focus more on this under MMR

Proof of Deposit/Source of funds
miscellaneous

Property sold between 2 members of same family

Be wary of new or unknown introducers

Exercise caution if client changes solicitor

Could be introducer removed from a lender panel

Due diligence/introducer agreement essential

Miscellaneous
summary

You must carry out DUE DILIGENCE & Record It

Think like an underwriter

Radar On Full Alert - Additional checks as needed

If in any doubt, refer to your Principal

Take time to read full document

Summary