Mortgage Fraud Expert
The SRA has been targeting firms of solicitors suspected of property fraud in a move which they estimate to have saved lenders between £15m and £20m over the past 9 months alone. This result has been achieved following emergency investigations the SRA has conducted into suspected firms. The effort has also included giving advice to those solicitors who might have been unwittingly involved in such practices.
The move was in part prompted by a trend in the SRA's own reporting figures, which show an increase in reports of suspected property fraud from 85 in 2005 to 356 in 2008, a more than four-fold increase. This trend mirrors a general concern in the industry about property fraud.
As a result of these concerns and trends, in 2009 the SRA conducted 106 investigations into firms suspected of misconduct in relation to mortgages or property, closing down 22 firms. 24 of the cases were referred to the Police for further investigation and another 30 were sent to the Solicitors Disciplinary Tribunal, which has the ability to strike a solicitor off the register.
Steve Wilmott, the SRA's Fraud and Confidential Intelligence Bureau head, explained the Authority's approach: "Last year the SRA stepped up its work to prevent, deter and tackle mortgage fraud. We've recruited two dedicated fraud officers, increasing our fraud unit to 18. Mortgage fraud is a serious issue for homeowners and lenders. We are working closely with major lenders and the police to share intelligence and take prompt action."
Detective Superintendent Robert Wishart, of the City of London Police, the national lead force for fraud investigation, said: "We are committed to working closely with the SRA during 2010, and beyond, to target corrupt solicitors who, we believe are a significant enabler of property fraud. Working in collaboration will help us to better understand the threats and give us the opportunity to take preventative and enforcement action to protect the financial community."
As part of the ongoing effort the SRA has issued advice and warnings to all solicitors' firms, alerting them to the warning signs of suspicious transactions, and reminding them of their obligations to ensure they do not become involved and to report any suspicions. It has also recently published a leaflet warning solicitors about property fraud and alerting them to the warning signs.
Sarah Wallace, Mortgage Fraud Expert at Irwin Mitchell Solicitors commented, "Solicitor firms also need to ensure that they have robust systems and controls relating to money laundering to ensure that they do not fall foul of the various money laundering offences including failure to disclose in the regulated sector."
If you or your firm have any questions regarding the issues raised in the article regarding property or mortgage fraud or solicitors regulatory obligations please contact Sarah Wallace on 0370 1500 100 or 020 7421 3883.