Mortgage Fraud Prevention
- the role of the lender panel manager
Nick Larkins
Mortgage Fraud Controls Manager
Lloyds Banking Group
September 2013
Purpose of today’s presentation
• 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
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Who’s who!
£2bn
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Who’s who!
Perimeter Controls
Application
Screening
Detection
Continuous
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
Panel Profile
9%
19%
16%
Sole
Practitioner
2-4 Partners
5-10 Partners
10+ Partners
56%
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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 funds
False Certificates of Title
2005-2009
Charge registration
- failure to register
- defective registration
- Leasehold conversion
Property hi-jack
(negligence or complicity)
2010-2013
Vendor Solicitor Fraud
2011-2013
Transparency
-Distressed sale
-Hidden representation
-Deposit manipulation
-Scheme Abuse
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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…………… however
Market upturn
Awareness is rising
Financial health of firms
Industry solution
Customer finances
Supplier market has reacted
Pressure on police resources
Level of investment has increased
Increasingly complex nature of
fraud
CML Handbook Part 3
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Build on solid foundations
•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
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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 Team
01733 509065
$conveyancingpanel@halifax.co.uk
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