One out of every five financial frauds that occurs within the UK is related to mortgages and the FSA is taking a stand to alter regulations leaving the question open of how the market can help.
Stoy Hayward, the BDO, stated that one out of every frauds pertain to mortgage and that the actions by the FSA to ban and impose fines on such fraud is evidence that there are many cases of fraud and poor practice in existence throughout the UK.
Since the FSA was founded it has been forced to ban 92 mortgage brokers for committing acts of fraud and has issued another £1.5m fines with a third of these fines issued over the last year.
The BDO revealed that out of about £1b of the fraud that happened in the UK during the first part of 2010 almost 20% was mortgage fraud, or £190m which is an 18% increase from 2009.
In response to the large rise in mortgage fraud, the FSA has changed regulation around mortgages so that advisers to any mortgage must now be approved before they can offer advice to patrons as of January 1st, 2011.
The FSA released a statement about the new regulation that read they hope the move will lead to industry transparency and help to prevent rogue advisers from tainting the industry so that consumers are better protected.
Fasttrack mortgages are also soon to be abolished in order to remove one popular way that mortgage fraud occurs.