SRA unveils mortgage fraud probe

The Solicitors Regulation Authority is to examine the role played by solicitors in mortgage fraud as it marshalls its resources to tackle the escalating problem.

The SRA claimed its investigations have already led to frauds worth several million pounds being thwarted.

Over the next year the SRA’s mortgage fraud project will seek to profile the involvement of solicitors and make recommendations for improved prevention, intelligence-gathering and enforcement action.

The project will fast-track intelligence for investigation and, where appropriate, involve other agencies. It will look at designing an ‘alert system’ with other agencies where money is found to be at risk.

Since the start of 2009, the SRA has put more resources into the detection, investigation and prevention of mortgage fraud and developed greater intelligence-sharing with the police, the Financial Services Authority, the Council of Mortgage Lenders and individual lenders.

The regulator told the Gazette that a number of intelligence-led investigations have already resulted in intervention and police involvement, leading to the prevention of frauds worth several million pounds.

SRA statistics show reports of suspected mortgage fraud have risen by more than 400% in four years, from 85 in 2005 to 350 in 2008.

More generally, SRA figures show a 45% rise in the number of compensation fund claims received from January to August in 2009 compared to last year, and a 13% increase in the number of new casework investigations into alleged misconduct by solicitors.

An SRA spokeswoman stressed that only a ‘very small proportion’ of solicitors were directly involved in mortgage fraud.