previous three has already gone through. Do you keep your mouth shut and don’t take any more or do I blow the whistle and where is that going to leave me? You’re then caught in that horrible position and I don’t think the industry has helped people to come clean and be in a safe space. I don’t think that brokers feel safe that they have the protection if they come clean. JHi: To mitigate that feeling it’s important for the intermediary community to listen to the suggestions of due diligence discussed today. NS: I don’t think regulating the introducer is the way forward. We just have to make sure our people are trained as best they can to take on introduced business.
are brokers scared of unwIttIngly commIttIng fraud? DM: Why wouldn’t you be? If you’re doing the right due diligence then you’re mitigating that risk as well. PB: Any broker in the marketplace should be concerned about it. Anyone that says no is probably at a higher risk of being an unwitting participant. TS: It’s much better for a broker themselves report a problem rather than for a problem be brought to us from a lender and have us go searching. We get a lot of reports and a lot of cases don’t get to the formal enforcement part and one of the big factors that we take into account with our resources is did the broker finally click and report themselves something going on wrong and their involvement? That really is something which gives much favour towards the broker. JH: The same is true from the lenders’ position. The most supported relationships we have with intermediaries will see that intermediary give us a call post submission and say that a piece of information has come to light which
makes the whole case look a lot different and that we should run the case through our systems. Instead of putting suspicion around an intermediary, that reinforces the relationship.
how many brokers have been reported to the fsa for suspected fraud? JHi: In terms of the grand total that we’ve had to the FSA it would be around 1,200 since 2006. Numbers in terms of prohibitions is around the 100 mark where brokers were knowingly involved in fraud. So approximately one in 10 reports leads to an enforcement case.
when wIll we reach a complIance tIppIng poInt where It becomes uneconomIcal? DM: There are a lot of brokers who have already got to that point. We’re already there. MF: The brokers remaining are in business because they’ve expanded their
offering. Now there’s a defined list of things we have to do, I don’t think it’s a lengthier process. DM: I agree with that to a certain extent as well. If you’re doing the due diligence correctly it shouldn’t take more time.
Is there a dIfference between ar and da fIrms In terms of tIme spent? PB: You have to be an increasingly larger DA in order to carry on the costs of compliance. AR: I think ARs spend a bit more time than DAs. We have to go through a lot more hoops to get our applications through, which isn’t a bad thing but you need to be a certain size. RS: The regulatory costs are continually escalating and making life more difficult. MR: It’s paying for the sins of those who have left the industry. TS: We definitely echo that. The majority of brokers are honest and hard working and help in terms of eradicating fraud when they see it. n
All the best Tweets @mortgagechat mortgage introducer JANUARY 2012 39
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