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Mortgage fraud a real threat to brokers

by 4 minute read

While technology has plenty of scope for improving efficiencies for brokers, it is also aiding scammers as mortgage fraud becomes 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.

“The effects on a broker’s business can be devastating. They include loss of accreditation, loss of trail, becoming uninsurable, banning by ASIC and personal bankruptcy,” Mr Bransgrove said.

“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 that such programs sadly have a key weaknesss.

“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 detailed go-to guide for uncovering the tactics and strategies of fraudsters in the mortgage space, including bogus documentation and references, the use of fake companies and the various means of deceiving unsuspecting brokers and other players in the property transaction process.

“Trust but verify. 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,” he said.

Brokers and lender partners of Connective will get to hear Mr Bransgrove’s insights into mortgage fraud first-hand at the company’s professional development days in August.

“Connective has a strong reputation for the excellent content at their Professional Development days, making them very valuable to Connective brokers and lender partners.

“Matthew’s latest book covers the prevention of mortgage fraud in detail with case studies, which are extremely useful to brokers to assist their awareness of fraudulent activities and enable them to avoid being caught up in fraud themselves,” said Connective’s director, Mark Haron.

“Matthew’s knowledge in this area, plus his experience in dealing with finance brokers, makes him the perfect person to present on this topic to brokers.”

A small sample poll of 101 brokers conducted recently by The Adviser revealed that a staggering one in four (25.7 per cent) had encountered mortgage fraud in the past five years. While by no means a representative sample of the industry as a whole, it does shed some light on the prevalence of bogus loan applications and hence the need for brokers to protect themselves by remaining vigilant to threat of criminal conduct.

[Related article: Sydney broker sentenced for $7m mortgage fraud]

Mortgage fraud a real threat to brokers
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