By Matthew Bransgrove -
Snapshot
- The number of mortgage fraud cases reported in recent years suggests that this problem is actually on the rise despite a heightened awareness among lenders, brokers and solicitors in the wake of the GFC.
- Whilst lenders take a number of practical steps to safeguard against mortgage fraud, solicitors are not exempt from this obligation.
- A number of recent cases reminds us that solicitors must be vigilant, and that they can easily take a number of key steps to guard against some of the more common kinds of mortgage fraud perpetrated through the use of modern technology.
Despite the heightened awareness of lenders, solicitors and mortgage intermediaries in the wake of the GFC, there has been an increase in the number of reported cases of mortgage fraud.
The wider dissemination of knowledge of lending practices to an ever-growing pool of potential fraudsters through the practice of copying people on email messages to ‘keep them in the loop’ has led to a vast increase in the number of real estate agents, lawyers, paralegals, accountants, clerks and borrowers learning all about the steps involved in writing a loan – and being given perfect copies of the documents involved.
The abundance of sophisticated but easy-to-use technology has made the fraudster’s dissemblance harder than ever to detect. Electronic bank statements, spreadsheets, graphics programs, high-resolution printers, disposable mobile phones, cloud technology, free Wi-Fi hotspots, cheap domain hosting and email, lax practices for identification of domain registrations, websites, open source content management systems and social networking, have each enhanced the ability of fraudsters to steal identities, create identities, accurately falsify bank statements, tax returns and employment records, and even fabricate fictitious employers, accountants, valuers and solicitors. Lenders are often best placed to take a variety of steps to prevent fraud, but there is also much that is incumbent on solicitors.
