Technology empowering mortgage fraudsters

While technology has plenty of scope to improve efficiencies in the lending market, it also helps scammers make mortgage fraud more prevalent, according to a leading mortgage lawyer.

Matthew Bransgrove, the head of Sydney-based Bransgroves Lawyers and author of Avoiding Mortgage Fraud in Australia, believes brokers need to take the threat of mortgage fraud seriously.

“In the wake of the GFC when volumes were down and the memory of stinging losses very fresh, funders, mortgage managers, aggregators and brokers all became very good at catching fraud,” Mr Bransgrove told Mortgage Business.

“Volumes are now back up, but there are no indications vigilance has slackened: if anything, lenders are getting better at spotting fraud.

“The pattern now seems to be that where there is fraud getting through, it is because it is increasingly sophisticated and subtle.”

While pointing to tools such as Genworth’s free web application for identifying fake documentation, Mr Bransgrove believes such programs sadly have a key weakness that diminishes their overall effectiveness.

“This material will no doubt help brokers and lenders, but it is just as useful to fraudsters,” he said. “This is unfortunate, but there is nothing that can be done about it. Lenders and brokers simply have to stay ahead of the game by continuing their education and vigilance.” 

Mr Bransgrove’s new book is a go-to guide for uncovering the tactics and strategies of fraudsters in the mortgage space, such as using bogus documentation and references, the use of fake companies and various other means of deceiving brokers and other players in the property transaction process.

“Trust but verify,” he said. “The lament of every broker hoodwinked by a fraudster is that the fraudster seems so genuine and trustworthy, that they cannot believe they were deceived.”

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Adam Zuchetti

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