50% of mortgage brokers think that greater use of technology by lenders when carrying out due diligence on borrowers would reduce mortgage fraud, according to new research by EDM Mortgage Support Services (EDM MSS).
The online property data network established by EDM Group following the acquisition of xit2 in April 2014 found that 12% say this would not lead to a reduction of fraud at all.
Lying about occupancy to gain a mortgage on a buy-to-let property was the most common type of fraud that could be reduced by more use of technology, according to 46% of respondents. Other types of fraud that could be reduced by more technology cited by brokers include: income or employment falsification (44%); concealing debts and liabilities (39%); identity theft (37%); obtaining multiple loans on the same property (34%); and over-valuing properties (24%).
Despite this, only 17% of brokers believe lenders are implementing enough technology to deal with fraud.
35% of mortgage brokers say the Mortgage Market Review (MMR) has not reduced the chances of fraud at all while another 2% say it has actually increased it; 56% believe the MMR has reduced the chances of fraud.
Joe Pepper, EDM MSS’ managing director, said: “The argument for more use of electronic data and communication is getting stronger, not just as a result of the greater administrative burdens resulting from MMR but other issues too, such as tackling fraud. There is already some use of electronic data exchange – more than a third of the brokers in our survey say they between 81% and 100% of the information/correspondence they exchange with lenders is done so electronically.
“But there is potential for this to be much greater and more extensive use of quality online systems would help the mortgage industry deal much more efficiently with large amounts of data and correspondence.”
