The mortgage market continues to stabilise, with 2015 gross lending numbers estimated at £220.3bn, an 8% increase on 2014’s total of £203.3bn.
With the Bank of England stating that a rise in interest rates is not on the cards for the foreseeable future, lending volumes will continue to increase with solutions in traditional, complex and specialist markets, including Buy to Let, despite the imminent changes to tax treatment. A number of new entrants have also started to make their presence felt and more are apparently waiting for the granting of regulatory permissions to enter the arena.
As the market continues to recover there is an increasing emphasis on protecting vulnerable customers, individual accountability and implementing policy that originates from the European Union. These areas will doubtless come under greater regulatory scrutiny as they grow, reflecting closer oversight given the problems of the past.
Unfortunately, some current challenges are not significantly different than they were when the market was at its peak in 2008. We have been engaged recently on a number of specific projects to review front end fraud avoidance processes and believe this is a growing problem. Of course, there are always going to be applicants that try to outsmart lenders by submitting false mortgage applications, but the difference now is that there are various sources that can be accessed, to support fraudulent activity. It is also no longer a sophisticated process; a good laptop, printer and internet access are more than likely the only tools required.
As origination volumes continue to increase for providers, more vigilance, integrated anti-fraud systems processes, and, in some cases, basic cross checking is required to ensure the gate keeper process remains intact.
In a growing market, opportunities open up for fraudsters and it is an ongoing battle for financial services providers to stay ahead of them. Rockstead can recognise the risks inherent in existing and new lenders’ systems to ensure a better service for genuine customers at the expense of the cheats, and to protect against the risk of losses.
During 2016, we know that lenders will continue to get stronger and customers will continue to get improved service levels. But behind that, good practises and effective risk management remain priorities for originators and holders of mortgage assets.