mortgage fraud prevention - the role of the lender panel manager nick larkins mortgage fraud...
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Mortgage Fraud Prevention- the role of the lender panel manager
Nick Larkins
Mortgage Fraud Controls ManagerLloyds Banking Group
September 2013
2
• 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
3
Who’s who!
£2bn
4
Who’s who!
Perimeter Controls
Application Screening
DetectionContinuous
Improvement
5
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 Profile
Sole Practitioner2-4 Partners
5-10 Partners
10+ Partners
6
Role of the Panel Manager in Lloyds
Compliance with bank policy and regulatory requirements
Ongoing due diligence of panel members
Panel application management
Minimise fraud loss
Customer 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 upturn
Financial health of firms
Customer finances
Pressure on police resources
Increasingly complex nature of fraud
Awareness is rising
Industry solution
Supplier market has reacted
Level of investment has increased
CML 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
