UK mortgage lenders have been urged to be cautious against an increase in mortgage fraud, as the economic conditions in the country eases up.
The National Fraud Authority (NFA) said that organizations involved in lending processes should continue working against mortgage fraud, which costs around £1 billion each year.
It added that significant action was taken by both private and public organizations to fight mortgage fraud during the past 12 months, leading to about £130 million worth of fraud money being stopped. But the NFA urged these groups to continue working against any possible fraud threats.
Bernard Herdan, NFA’s chief executive, said: "In the economic downturn, there has been a reduction in the availability of products that were targets of fraud such as sub-prime, buy-to-let and self-certified mortgages.”
"The economic climate also has increased pressure on lenders to reduce costs, so there has been a greater emphasis on fraud prevention, detection and recovery of losses,” he added.
"The NFA urges mortgage lenders to maintain this robust approach in the anticipated economic upswing."
Problems in detecting fake documents are one of the major problems faced by lenders and intermediaries. However, a pilot scheme implemented by HM Revenue & Customs to help lenders discuss the problems has helped prevent commercial fraud worth £111 million.
The increased investments of the Land Registry in anti-fraud activities, including new systems, training and staff, had stopped several attempted property fraud totalling to £20 million.
The industry is also watching corrupt mortgage intermediaries, conveyancers, solicitors and surveyors involved in various mortgage fraud activities. The investigations of the Solicitors Regulatory Authority have prevented fraud worth between £15 million and £20 million.