The Council of Mortgage Lenders has reported (18 September 2014) that mortgage lenders had their strongest August in six years, with lending reaching £18.6 billion in August, heights which have not been reached since August 2008 (and look what followed…).

That said recent press coverage indicates a slowing up – this may be as a result of the tighter lending controls that came into force in April.

With borrowing for 2014 estimated to top £200 billion, will this give rise to an increase in mortgage fraud? Is it more the case that this increased lending has led to sloppy conveyancing and thus enabled greater opportunities for fraud?

Conveyancers are easy targets for fraudsters, so what is it about the updated guidance that will help protect them and the lender, where the Green Card may have failed?

The Green Card was issued by the Law Society in the 1990s as a consequence of the recession and subsequent property crash.

It directly addressed the increasing instances of solicitors being targeted for fraudulent mortgage transactions. Its aim was to highlight the indicators for fraudulent activity. Typically these included

• the traditional back to back sales with substantial price increases for no apparent reason;
• sales between connected parties and
• the manipulation of the values of new build properties in the buy to let market

Now we have the Law Society’s latest (31 July 2014) updated practice note on mortgage fraud. http://www.lawsociety.org.uk/advice/practice-notes/mortgage-fraud/

Is it reasonable to assume that this is an indication of more claims to come?

It recognizes that mortgage fraud is still ongoing and provides a raft of examples for conveyancers to consider to stop them becoming the victims of this persistent crime.

The note sets out the steps solicitors can (and should) take to protect their firms from being a target. The usual indicators are there, but the reader is also provided with helpful advice about

• protecting the firm,
• enhanced due diligence,
• identification of clients,
• how to approach verifying signatures,
• how/when and to whom one should report something suspicious, and
• money laundering.

All solicitors must be alive to the various and increasingly innovative methods used by fraudsters when
• buying and selling property and the use of non-bank lenders and
• corporate structures to disguise inflated sale prices,
• in addition to the list set out above.

Read more:  http://bit.ly/1nToAlB
Law society: http://bit.ly/1vEtMcT