So another week starts with news that another couple of greedy and errant brokers have seen their reputations bite the dust – courtesy of the FSA’s compliance muscle – after they admitted their involvement in numerous counts of mortgage fraud.
While most of us were having relaxing Bank Holidays, Ngozika Louise Ogboru who is based in Harrow, and Ronald Winton from Dundee, were left to think long and hard about their decision to cook the books of clients who needed loans.
But are they the people we should be putting most of our effort into rooting out?
I am very supportive of regulators issuing banning orders against individuals who break rules and, when appropriate, mount criminal prosecutions. But I’d really like to see more being done to knock organised gangs on the head. I believe these are the people who are really the driving force behind this escalating problem – not the likes of Ogboru and Winton.
Knocking the stuffing out of the minnows is an important objective and must not cease. But the amount involved in these two recent FSA cases – just under £100,000 – hardly scratches the surface of an issue that is now exploded into the £1 billion-a-year league.
My heart and my head tell me the authorities should be spending more time smashing organised criminal gangs rather than pumping out press releases hailing their latest regulatory action against Mr. Nobody and Mrs. Nobody was a major success!
Mortgage fraud is a problem lenders simply have to get to grips with. And I believe they will; the question is: how long will it take?
Knowing the market as I do, I believe it could be sooner than most people think. After all, lenders can no longer afford to turn a blind eye to the scale of the problem – and a wide range of very good fraud prevention and detection solutions exist, thereby making the compliance job that much more easier.
All we need now before we start to make real progress is for the regulators to follow suit.
Personally, I would welcome any moves the FSA took to dispense with sound bites and concentrate on working on the substance. If that means the regulator goes quiet for a period, then so be it.
It’s far better for the industry and the country that the problem is tackled in a meaningful way rather than the tokenistic approach that seems to dominate the way most things are done.