Mis-sold Mortgage Claims > Mortgage News
FSA Does Not Need Justification for Rejected Applications
Thu, 15 Dec 2011
Following its Mortgage Fraud Thematic Review the Financial Services Authority states that brokers are not going to have to ask mortgage lenders the reasons why certain mortgage cases have been refused.

The FSA published this review in June 2011 in order to reduce mortgage fraud.

It had initially claimed it would be good practice for intermediaries to ask lenders for their reasons for application refusals.

However, last week it undertook a U-turn in its final guidance to intermediaries.

The guidance says: "We acknowledge there are reasons why a lender might want to withhold this information, if, for example, they have suspicions about the intermediary.

"While we consider that sharing this information is a valuable fraud prevention tool, we acknowledge the difficulties faced by intermediaries seeking to apply this piece of good practice and have decided to remove it."

Recent Experian data highlights that there were 49 fraudulent applications amongst every 10,000 applications in the three months to September, up 53% in contrast to the previous quarter, with most mortgage fraud happening due to concealment of credit problems or exaggeration of employment status.
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