Top left to bottom right: Richard Nunn, lawyer at the Serious Fraud Office; Robin Johnson, managing director at KFH Surveyors; James Sherwoord-Rogers, managing director at Quest; Angus Stewart, chief executive at e-Solutions; Lea Karasavvas, mortgage broker at Mortgageforce; Richard Klemmer, president at Oakwood Global Finance; John Mawdsley chief executive officer at Omnii Solutions; John Malone, executive chairman at PMS; Jennifer Bourne, senior policy adviser at the Council of Mortgage Lenders; Grant Sidey, senior manager interventions at the National Fraud Authority; Beverley Young, head of operations at CIFAS; Eddie Goldsmith, partner at Goldsmith Williams
where it’s difficult for lenders to pinpoint exactly where a fraud has happened and the extent of it. Richard Klemmer: Having loan portfolios come under our administration, and most of these portfolios were originated during the middle part of the last decade, we tend to see two types of issues emerge. One is the more “soft fraud” which is
where lenders were clearly, at least in our eyes, allowing things to cross their desk when they knew practices weren’t appropriate. So for example information on applications coming in surrounding income, employment histories, valuations on properties being pushed by borrowers, brokers, the packagers or anyone else in the process. That’s the soft stuff that we see and it’s
systemic frankly from some of the portfolios of the non-bank lenders in particular. The more serious fraud where you’ve got intentional practices and schemes to defraud, most noticeably when solicitors get involved, those tend to be the stickiest ones and the biggest individual losses.
Our sense there is that there’s poor
recognition techniques with the lenders. They didn’t have very good lender relationship databases there to help them recognise fraudulent patterns.
the fsa has highLighted that Lenders weren’t recognising frauds. how have systems changed to heLp that? James Sherwood-Rogers: Who holds the power in the banks has changed. There was a shift of power from the sales guys to the risk guys. I think that’s still in place and the balance is very tight now. As a result banks are starting to ask what tools have they have to prevent fraud and risk. For the first time people were actually interested. For example we now run AVMs on
every survey that comes through us. Even though people were using AVMs, they weren’t using them to check how good the surveyor’s valuation was. They were just using them for origination. Nobody asked the question before because there
has never been the issue. There was this sudden collapse and change in attitude and suddenly you could go into a bank and talk about fraud and risk, they’re actually interested where for a very long time they weren’t. Robin Johnson: Pre-2005, most of the banks and building societies had an internal chief surveyor and an internal senior risk person so that up until around 2004, if I as a surveyor had a concern and I had a route to talk to someone at a senior level within that lending facility. Post-2005 lenders were very much managed and driven by sales targets. The opportunity to get to somebody in risk was almost impossible. Most of the lenders had removed their internal chief surveyors, they sold off their internal surveying teams so fundamentally if we had something to report, I didn’t have anyone to talk to.
has that shifted? RJ: Absolutely. From the collapse in 2009 onwards, it was very easy route to talk to someone on the risk team with any of the
mortgage introducer AUGUST 2011 37
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