The Commonwealth Bank of Australia is overhauling its mortgage operations to ensure security and transparency when dealing with mortgage brokers in a bid to stop mortgage fraud.
According to a report by the Australian Financial Review, the new system will allow CBA to detect suspected fraud or irregularities through an individual assessment of each application by the case officer. The new system will also be able to tell whether mortgage brokers have been “duped into processing” fraudulent applications or were complicit.
The CBA’s move comes after other banks also took steps in enhancing scrutiny on applications, especially those coming from foreign buyers. ANZ recently found out forged and falsified information in their home loan applications from foreign buyers. Westpac, Adelaide Bank, and Bendigo also increased their security when it comes to accepting applications from foreign buyers. However, the scale of mortgage fraud is yet to be known.
“It is too soon to assess the extent of the frauds, but the suspicion is that it is more widespread than just a few bad apples,” said Digital Finance Analytics principal Martin North. “We need to know, were the documents to do with falsifying an otherwise kosher loan, or was it a more structured money laundering scam, perhaps in collusion with real estate agents and brokers? We just do not know.”
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