The poor information exchange among mortgage lenders could increase the risk of fraud and lack of transparency on the market, experts say.
Around a fifth (18 per cent) of mortgage professionals believe there is not enough communication in the industry, new research from EDM Mortgage Support Services (MSS) reveals.
This may lead to a spike in fraud cases, which is a common worry for many in the mortgage industry, as almost a third (29 per cent) of professionals currently assess mortgage-related fraud levels to be “significant” or “very significant”.
Another threat to the market is lack of transparency, especially in the audit chain across the complete application process. Transparency of the audit chain was viewed as ‘poor’ or ‘very poor’ by over a fifth (22 per cent) of mortgage professionals.
Joe Pepper, managing director at EDM MSS, comments:
“It is a year since the introduction of the Mortgage Market Review (MMR), which was designed to ensure that borrowers could afford the mortgages offered to them by lenders and that products suited their needs and circumstances.
“Without transparency in the application process, it’s difficult to see how lenders can prove that they have undertaken all the necessary stages to ensure that due process has been followed.
“The opportunity for fraud is also wide open if lenders and brokers are unable to carry out necessary checks and balances throughout the application process. From a regulatory as well as a customer experience point of view it’s vital to get the right platforms and processes in place.”
