mortgage fraud prevention - the role of the lender panel manager

Mortgage Fraud Prevention- the role of the lender panel manager

Nick Larkins

Mortgage Fraud Controls ManagerLloyds Banking Group

September 2013

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• Who’s who

• Some facts about Lloyds conveyancing panel

• Panel management framework

• How mortgage fraud has changed over the past few years

• Risks today / Risks tomorrow

• Summary and questions

Purpose of today’s presentation

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Who’s who!

£2bn

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Who’s who!

Perimeter Controls

Application Screening

DetectionContinuous

Improvement

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Lloyds panel

• Large panel across the UK• Stable member numbers for over 12 months• Open to new members• No restrictions on firm size• No intention to reduce panel outside of policy requirements• Active panel management programme

19%

56%

16%

9%

Panel ProfileSole Practitioner2-4 Partners

5-10 Partners

10+ Partners

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Role of the Panel Manager in Lloyds

Compliance with bank policy and regulatory requirementsOngoing due diligence of panel members

Panel application management

Minimise fraud lossCustomer protection

Support smooth customer journey

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Panel management challenges

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Challenging the laws of physics

Misappropriation of fundsFalse Certificates of Title

Charge registration- failure to register

- defective registration- Leasehold conversion

Property hi-jack(negligence or complicity)

Vendor Solicitor Fraud

Transparency- Distressed sale

- Hidden representation- Deposit manipulation

- Scheme Abuse

2005-2009

2010-2013

2011-2013

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Example Below Market Value transaction

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The good news – together we are making progress

Then Now

……….based on levels of detected fraud requiring a fraud provision

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There are risks facing us……………

Market upturnFinancial health of firmsCustomer financesPressure on police resourcesIncreasingly complex nature of fraud

Awareness is risingIndustry solutionSupplier market has reactedLevel of investment has increasedCML Handbook Part 3

however

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• Compliance with the CML Handbook• Timely registration of charge• Notify the lender of changes to the firm• Notify the lender of any suspicions on a case• Confirm probity of the vendor solicitor• Carefully vet new employees• Controls over staff, client account, transparency• Your panel membership• Compliance with the CML Handbook

Build on solid foundations

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In summary……….

• Good progress in recent years• Market conditions are changing the risk profile• BMV, hidden deposits, vendor solicitor fraud• A need to continue to focus on the foundations• Communication with the lender is vital• Expect continued assurance activity by lenders

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QUESTIONS?

Lloyds Banking Group – Panel Management Team01733 509065

$conveyancingpanel@halifax.co.uk