BLOG: how to ensure your mortgage adviser is above board
We sometimes come across victims of fraud in our line of work – particularly when fraudsters have damaged a client’s credit rating and they subsequently choose us to help them get a mortgage.
Rarely do we of hear of mortgage brokers committing fraud themselves, but the industry is on high alert right now for just that. Lenders are dubbing it “self cert through the back door.”
Ever since the ban on self cert mortgages, it has been much more difficult for people to falsify information such as their income to obtain a mortgage.
Such details now require documentation rather than simply a written disclosure.
However lenders are increasingly picking up on a “Buy to Let” scam where people apply for a BTL mortgage with the intention of living in the property.
The mortgage is then based on potential rental income rather than actual income.
Worryingly, there are cases where brokers are suspected to have submitted falsified applications like this on behalf of their clients.
For consumers, it is difficult to over-emphasise the importance of honesty and accuracy in all your financial applications and signed agreements. Your broker should make this easier for you. If anyone ever tries to convince you to supply misleading or false information they cannot be trusted.
Thankfully it is hard for falsified applications like this to get through the system. Lenders have honed their intelligence gathering to flag-up suspect applications and they operate a zero tolerance policy for brokers on the other end of them.
We recently turned down a job application from a broker who we knew had been dropped by a single lender after his clients were alleged to have applied for a BTL for their main residence. Even if he was not complicit, the broker should not have allowed himself to be caught out by this scam.
However there are ways to ensure that your mortgage adviser is both competent and trustworthy and that everything you put your name to is above board.
Firstly you need to use a reputable brokerage which is FCA approved. These brokers are subject to strict regulations and must be able to justify all of their actions on the premise of “Treating Customers Fairly.” FCA registered brokers can be banned from practice, fined and even jailed for breaching the rules.
Ensure that you provide all relevant documentation so that your broker is accurately quoting and calculating your income and outgoings. Your broker should go through your application with you thoroughly to make sure you have read it and understand it fully. Nothing should be done without your knowledge and consent. Do not proceed with any broker who does not fully explain their service, costs and complaints procedure at the outset in the form of an “Initial Disclosure Document”.
Remember your broker is in a position of trust. They are invited into your home to discuss your affairs in detail. If that trust is breeched you have rights.
Your complaints will be taken seriously and can be dealt with through official channels if necessary.
Martin Wade is director of Your Mortgage Decisions