Commonwealth Bank works to stop mortgage fraud
The Big Four bank is overhauling its mortgage operations to better detect fraud.
A report by the Australian Financial Review has revealed Commonwealth Bank will change its mortgage operations to enhance security and transparency when dealing with mortgage brokers.
The AFR claimed the system, which will see each application individually assessed by a case officer, would allow CBA to detect suspected fraud or irregularities. The system will also help detect whether mortgage brokers have been “duped into processing” fraudulent applications or were complicit, the paper reported.
Commonwealth Bank’s moves mirror decisions from other banks to enhance scrutiny on applications, particularly from foreign buyers. ANZ has admitted to finding forged and falsified information in home loan applications from foreign buyers, while Westpac and Bendigo and Adelaide Bank have also taken steps to increase scrutiny on applications from foreign buyers, the AFR said.
Digital Finance Analytics principal Martin North told the paper 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,” North said.
"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."