Sunday 21 March 2010

Conveyanacers Beware - Property Fraud likely to top £1b in 2010

Approximately £1 billion a year is predicted by the National Fraud Association to be lost through mortgage fraud.

Since the onset of the recession, mortgage lenders have gone to greater lengths to combat fraud and protect their businesses (partly driven by their insurers). For example, with sub-prime, buy to let and self-certified mortgages proving to be the primary target of fraudsters, banks have sought to reduce the number of products available in these niches. Similarly with the economy forcing more and more lenders to reduce their costs, there has been a greater emphasis from banks for fraud prevention, detection and recovery of losses.

The Council of Mortgage Lenders (CML) has called for closer scrutiny of conveyancing solicitors firms to crack down on mortgage fraud committed by solicitors, and a comprehensive review of the way solicitors are regulated.

The CML said the principles-based approach of the SRA is not adequate to help restore lender confidence, and out of touch with the more intrusive style of regulation being championed by the Financial Services Authority.

Are the CML right ?

I would contend that the correct response is to insist that conveyancers to be prohibited from acting for both the Lender and the Borrower. There is huge potential conflicts of interest between them. This can only be provided by independent conveyancing solicitors or conveyancers .

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