Following the Financial Services Authority's (FSA) announcement of new measures to cut mortgage fraud, a leading independent mortgage expert has warned of the potential pitfalls of adopting the new streamlined defence.
John Charcol welcomes the move, which it hopes will cut mortgage fraud overall, but it also believes that the new powers leave smaller intermediary firms open to attack should they be wrongfully accused of misconduct.
Spokesperson for John Charcol, Ray Boulger, said: "I think, broadly speaking, any measures that are introduced to reduce fraud are welcome."
However, Mr Boulger also explained that despite these powers making fraud less likely, it increased the power lenders had to come down hard on intermediaries.
"In the event that a mistake is made, smaller intermediaries may be deprived of their livelihoods," he continued. "In most matters of English law you are innocent until proven guilty. Sometimes in the finance world the opposite applies."
Lenders are being encouraged to supply details of intermediaries found to be involved in fraudulent mortgage applications to the FSA when they deem the matter serious enough to constitute removal from their panel.To read more about mortgages, click here.
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